Good Morning! Patek Philippe is celebrating rate cut season in style and just dropped its first watch collection in 25 years. Elon Musk is offering $1M a day to sway swing state voters. We might not be in the golden age of private credit anymore, with Pimco declaring the asset class as overvalued. ChatGPT rival Perplexity AI is raising capital at a $9B valuation, and a billionaire shares who Wall Street is backing in the election.

Plus, why robotaxis are a risky bet for Tesla, and Trump worked a shift at a McDonald's drive-thru in Pennsylvania.

Your future self will thank you: Get your FMVA® Certification and become a financial modeling expert (and maybe get promoted).

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Jefferies Wants #5 Spot

While many of the leading investment banks on Wall Street have been slashing jobs and tightening belts, Jefferies is playing a different game. The bank is going on offense, shelling out hundreds of millions to poach top talent from rivals. Their goal? To become the world’s fifth-largest investment bank and stay there for the long haul.

Jefferies is currently the seventh-largest investment bank in the U.S. by revenue, up from 11th last year. On paper, breaking into the top five sounds reasonable, but they’ll have to outmuscle the heavyweights like JPMorgan, Goldman Sachs, Morgan Stanley, and either Citi or UBS. 

But Jefferies thinks it’s armed with a differentiator - they call themselves the “last frontier” for dealmakers who want to work at a pure investment bank, without all the corporate b.s. of a big institution. It's reminiscent of Lehman Brothers in the early 2000s, driven by a bold, entrepreneurial culture.

Since 2020, Jefferies has increased its managing directors headcount by 70%. The allure to jump ship to Jefferies is real. Jefferies has reportedly dished out $10 million a year comp packages to some of Wall Street’s top rainmakers. The pitch? More autonomy and fewer strings attached than at the bigger banks.

The hiring surge has been driven in part by Sumitomo Mitsui’s investment in Jefferies, beginning in 2021. The Japanese bank now holds a 15% stake and could even be eyeing an eventual full takeover.

Even as deal volumes have tanked since the 2021 boom, Jefferies’ stock has surged over 60% this year, keeping pace with Evercore. The firm also capitalized on its rivals' struggles, including the collapse of Credit Suisse.

Takeaway: According to Jefferies’ CEO Rich Handler, “we try to do nothing stupid or arrogant during the good times and then play offense during the bad times.” And it’s a good strategy to have - Jefferies is in it for the long run. While perhaps investment banks have seen competitors take a similar approach to Jefferies before - throw lots of money at gaining market share and trying to crack into the top 5 or 10, there’s something to be said for a bank really just focused on banking and the ‘eat what you kill’ mentality.

_{PRESENTED BY CFI}

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Earning your FMVA® certification means mastering advanced financial modeling techniques and using the desk-ready skills you developed to advance your career in finance.

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Get certified with CFI today and transform your future.

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Top Reads

• Watchmaker Patek Philippe launches first new collection in 25 years (CNBC)

• Elon Musk offers $1 million a day to entice swing state voters to sign petition (YF)

• Fuji Soft board supports KKR buyout offer (Reuters)

• Harris faces fight over Khan’s FTC future (Axios)

• Boeing workers to vote on new wage deal that could end strike (Reuters)

• Here are four factors that will shape holiday shopping (CNBC)

• Billionaire investor offers take on who Wall Street is backing in the election (Fox)

• Perplexity AI seeks valuation of about $9 billion (CNBC)

• In sports, American socialism is beating European capitalism (WSJ)

• Cigna resumes merger discussions with Humana (Reuters)

• Why the robotaxi is such a risky bet for Tesla (BB) 

• Pimco says private credit is overvalued (YF)

• The commercial real estate recovery is on but rebound may be uneven (CNBC)

• How behavioral economics of Uber drivers reveal what drives workforce (Fortune)

• ‘The Great Stay’ is preventing young workers from getting a foot in the door (CNN)

• Trump works McDonald’s drive-thru (CNBC)

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Markets Rundown

Stocks cap a positive week with more gains: U.S. equity markets finished the week on a high note, with technology stocks leading the way. The S&P 500 notched its sixth consecutive weekly gain, boosted by strong earnings results and upbeat guidance from Netflix, as well as positive reports of Apple's iPhone sales in China.

In contrast, the Dow Jones remained flat, weighed down by a decline in the energy sector, as WTI oil dropped below $70, marking its biggest weekly decline in a month. The fall in oil prices is seen as a positive for inflation and consumer spending, helping to ease pressures in the broader economy.

China data mixed, but policy support lifts sentiment: Chinese equity markets have been volatile but have recently outperformed other markets thanks to the government's efforts to stimulate growth. Although China's GDP for the third quarter grew at a slower-than-expected 4.6%, and home prices continued to decline, retail sales saw an improvement, signaling a potential stabilization.

With additional measures from China's central bank, such as a reserve ratio cut, investor sentiment has improved. However, questions remain about the sufficiency of these policies to drive sustained growth. The combination of policy support and low valuations is expected to improve the outlook for Chinese and emerging-market equities in the near term.

Earnings season kicks into high gear next week: Next week, about a quarter of S&P 500 companies are expected to report third-quarter earnings, including Tesla. Early reports have been encouraging, with many big banks exceeding earnings expectations. The consensus for S&P 500 earnings growth has been revised up to 6.5%, marking the fifth consecutive quarter of positive growth if achieved.

Technology continues to be a major driver, supported by optimism around AI. However, as the U.S. economy shows resilience, with a GDP growth estimate of 3.4%, earnings growth is expected to broaden across other sectors, promoting diversification and potentially narrowing the gap between mega-cap tech and the broader market.

This broadening of market leadership could support continued momentum in equities as corporate earnings continue to roll in.

Movers & Shakers

• (+) Netflix ($NFLX) +11% after the streaming company posted strong earnings.

• (+) U.S. Cellular ($USM) +7% after selling spectrum assets to Verizon.

• (–) CVS ($CVS) -5% after announcing a new CEO.

Private Dealmaking

• GIC and Silver Lake acquired Zuora for $1.7 billion

• Xerox acquired ITsavvy, an IT products provider, for $400 million

• Eruditus, an executive education program provider, raised $150 million

• Terray Therapeutics, a generative AI biotech, raised $120 million

• Agrolend, a digital bank for agribusinesses, raised $53 million

• Jüsto, an online grocer, raised $50 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

_{BOOK OF THE DAY}

The Diary of a CEO

Steven Bartlett, entrepreneur and founder of Social Chain, distills the wisdom he’s gathered from his own entrepreneurial journey into 33 actionable laws.

Drawing from personal stories, candid reflections, and interviews with top business leaders, Bartlett explores key principles that drive success in both business and life.

Whether it's leadership, mindset, or resilience, each law offers practical insights and strategies designed to help readers navigate the complexities of building a business and creating a fulfilling life.

Perfect for aspiring entrepreneurs, leaders, and anyone seeking to elevate their approach to work and personal growth.

"Surprising and persuasive in equal measure. Steven’s advice will supercharge your chances of achieving your biggest dreams." 

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India’s Share of Global GDP Continues to Grow

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Why Wall Street Is Pouring Billions Into Music Royalties

The Big Fish on Wall Street have zeroed in on music royalties, and for good reasons:

• Steady returns: The value of the music industry continues to increase

• Low market correlation: Unlike traditional assets, downturns have little effect on music consumption

• Long-term potential: Songs have long shelf lives (think “oldies but goodies”)

Want to diversify your portfolio with chart-topping songs? With JKBX, everyday investors can directly invest in the world’s most iconic music from Diplo, Taylor Swift, Beyoncé, and more. 

If the sound of recurring, steady royalty payments sounds like music to your ears, hammer the button below.

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Investing Lessons

Investing is simple but not easy. Over two decades, one key lesson has emerged: consistency is crucial. Choose an investment strategy that makes sense for you and stick with it, even when the market is volatile.

Diversification acts as a safety net, even if it means something in your portfolio is always underperforming.

Focus on earning well, saving aggressively, and avoiding the temptation of picking individual stocks, as even professionals struggle to beat the market. If an asset doesn’t generate income, consider it speculative and limit your exposure.

The best time to build wealth is often in your 30s, when there are fewer commitments and more energy. Save aggressively and live below your means.

Simplicity in your portfolio will usually outperform complexity.

True passive income is rare—dividends from index funds are genuinely passive, whereas rental properties and side businesses require effort.

Embrace insurance to protect against catastrophic risks, as bad things happen more often than we'd like to think.

Wealth-building is a gradual process, so stay patient, avoid unnecessary costs, and stick to your plan.

Remember, simplicity, consistency, and focusing on fundamentals drive long-term success.

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Short Squeez Picks

• How to lead a team smarter than you

• 3 fantastic under-the-radar bakeries in East Village

• How emotional intelligence impacts an intimate relationship

• The best Trader Joe’s Fall 2024 items

• How to conquer social anxiety at networking events

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Memes of the Day