Good Morning! A monster earnings week kicked off with Alphabet smashing estimates, up 6% after-hours. Trump Media and crypto are soaring as well, with investors betting on Trump recapturing the White House. Elon Musk's xAI is in talks to raise capital at a $40 billion valuation. Blackstone raised a $22 billion in a new direct lending fund. Morgan Stanley says the era of zero-interest rates and inflation is over, and Reddit surged to a new high after strong holiday-quarter forecast.

Plus, Starbucks abandoned its olive oil coffee, JetBlue and Frontier still can’t get over Spirit Airlines, and the best bodega sandwiches in NYC.

Elf Labs is bringing iconic characters to life with advanced AR/VR tech—invest in them here.

_{SQUEEZ OF THE DAY}

Private Equity Fees Dive to Record Lows

Private equity has had a quiet couple of years. Deal flow is down, fundraising is tougher than ever, and private equity firms really have to hustle to secure committed capital from investors in an uncertain economy.

As a result, private equity management fees are hitting record lows. As of June, management fees were around 1.74% of committed capital for buyout funds closing this year. That’s down from the previous low of 1.85% in 2023.

Some of the reasons for the lower management fees include that PE’s usual exit strategies—IPOs and major acquisitions— aren’t as strong as in past cycles. With fewer cash-outs, investors have less capital to re-invest in new funds. 

Larger firms can afford to reduce fees to appeal to investors, sometimes offering discounts across multiple funds—one fund at 2% or three for 1.75%. As a result, smaller funds have to cut fees to stay in the game. 

Big limited partners, especially those investing $25-$100 million, also have more leverage to negotiate fees.

Takeaway: While management fees may be dropping, performance fees (or carried interest) remain steady at around 19.5% of profits, and private debt fund fees have held firm as well. Private equity investors are often seen as Wall Street’s elite, but even they must work hard to appease their own clients—and it turns out they don’t always hold the upper hand with investors.

_{PRESENTED BY ELF LABS}

Last Call to Invest in Next-Gen AI/AR

Imagine some of history's highest grossing character IP brought to life with AR and AI—no VR headset needed. Elf Labs has secured over 100 trademark victories for characters like Cinderella, The Little Mermaid, and Snow White, and are using their cutting-edge tech to create a whole new level of interactive entertainment.

Even more exciting, they have:

• Iconic IP: 100+ trademark victories for some of the highest grossing characters in history—Cinderella, Snow White & more.

• Innovative Tech: 12 patents backing revolutionary AR and AI experiences, bringing stories to life at home.

• Major Launch Ahead: Three new franchises debuting in 2025, led by a team with over $6B in licensing deals.

With less than 24 hours left, this is your chance to join a movement in tech and storytelling. Don’t miss your opportunity to invest in Elf Labs before it closes TODAY! 

_HEADLINES

Top Reads

• Reddit surges to new high after strong holiday-quarter forecast (Fortune)

• Trump Media rally hits 330% as polls show election in dead heat (YF)

• Blackstone raises $22 billion in new direct lending fund (BB)

• Morgan Stanley says era of zero-interest rates and inflation is over (CNBC)

• America’s largest newspaper chain won’t endorse in 2024 presidential race (CNN)

• Dogecoin surges above $24b market cap after Trump rally reference (CMC)

• Consumer confidence surges as election nears, while job openings move lower (CNBC)

• Alphabet earnings crush estimates as cloud business expands (YF)

• Wall Street bosses are more worried about inflation than the election (YF)

• Job openings fall to the lowest level since January 2021 (YF)

• Starbucks abandons the olive oil coffee, brainchild of its former CEO (CNN)

• Elon Musk's xAI in talks to raise funding valuing it at $40 billion (YF)

• LinkedIn launches first AI agent to take on role of job recruiters (TC)

• JetBlue and Frontier still can’t get over Spirit Airlines (QZ)

• Goldman Sachs, Morgan Stanley CEOs see more dealmaking in 2025 (YF)

_{CAPITAL PULSE}

Markets Rundown

Stocks closed mixed on Tuesday: The S&P 500 and Nasdaq gained on Tuesday, while the Dow Jones posted a modest decline. Year-to-date, markets have had a strong run, with the S&P 500 up over 22%, the Nasdaq up more than 24%, and the Dow Jones up around 12%.

Meanwhile, despite a slight drop in yields today, Treasury bond returns have faced challenges recently as yields have risen. The 10-year Treasury yield is now above 4.25%, far from its September low of 3.6%, putting some strain on bond market returns. Investors with balanced portfolios will likely see returns shaped by high equity gains and more restrained bond performance this year.

Corporate earnings season continues, with mega-cap tech on deck: So far, around 40% of S&P 500 companies have reported Q3 earnings, with an average year-over-year growth rate of 4.1%, in line with early-quarter estimates but down from last quarter’s 11% growth.

This week, the spotlight is on mega-cap tech, after Alphabet, Apple, Amazon, and Meta are set to release results. Investors are especially interested in updates on AI spending and data-center growth as companies increasingly explore AI applications across sectors.

U.S. labor-market report due on Friday: This Friday’s nonfarm-jobs report for October is expected to show a slowdown, with 120,000 new jobs, compared to last month’s 254,000 increase. Factors include recent strikes and natural disasters.

The unemployment rate is projected to hold steady at 4.1%, just below the year’s peak of 4.3%. A slight decline in wage growth to 0.3% month-over-month would be a positive indicator of easing services inflation. Overall, while the labor market may be cooling from pandemic-era highs, data still points to a robust U.S. jobs environment.

Movers & Shakers

• (+) VF Corp ($VFC) +27% after the apparel company beat Q2 earnings; a profit swing.

• (–) JetBlue ($JBLU) -17% after the airline lowered its revenue forecast.

• (–) Xerox ($XRX) -17% after the printer maker lowered its guidance.

Private Dealmaking

• AbbVie acquired Aliada Therapeutics for $1.4 billion

• Armis, a cyber exposure management startup, raised $200 million

• Sierra, an AI enterprise customer service provider, raised $175 million

• Fingercheck, a workforce management platform, raised $115 million

• Moniepoint, a Nigerian fintech, raised $110 million

• Blacklane, a transportation provider, raised $65 million

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

_ELECTIONS

US Election Forecast

• Trump's holds a 22-point lead on the prediction market Kalshi, with five days left until the election

• Get $20 to trade the election when you deposit $100 or more. See live odds and bet now

_{BOOK OF THE DAY}

Hot Dog Money

When the federal government catches hotshot financial adviser Louis Martin “Marty” Blazer defrauding his NFL-player clients, it’s time to come clean. He has no reasonable defense.

What he has is a bigger story to spill to the feds―that of a multibillion-dollar conspiracy that exploits the most talented college athletes and implicates one of the most popular entertainment industries in the nation. The DOJ is listening, and the truth could literally set Marty free. All he has to do is prove that the NCAA is a vast ongoing scam.

Sent undercover by the FBI, Marty infiltrates the innermost circles of college basketball, a high-flying world of Miami clubs, New York luxury suites, and Las Vegas back rooms.

Over a period of three years, covertly recording thousands of hours of conversations with coaches from many of the leading college teams, Marty reveals a large-scale epidemic of deception, bribery, and fraud within the NCAA. The stars seem aligned for the operation―if only Marty can keep the FBI itself from blowing the case. 

Journalist Guy Lawson digs deep into a true story about the lure of celebrity, sports, wealth, and crime, and the motivations of a man―on both sides of the law―who exploded a land mine of systemic all-American corruption.

“The New York Times bestselling author of War Dogs exposes the inside story of disgraced fraudster turned undercover FBI informant Marty Blazer and the greatest scandal in the history of the NCAA.”

_{DAILY VISUAL}

Long-Term Outlook for US and Europe

_{PRESENTED BY CORPORATE FINANCE INSTITUTE}

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_{DAILY ACUMEN}

Life Strategy

Creating a life strategy can be transformative, guiding us through transitions and helping us build resilience. Borrowing from corporate strategy, you can apply similar strategic thinking to shape your personal path.

Start by defining what a great life looks like for you—what do you value, what brings you joy, and what goals matter most? Consider your "life portfolio" by analyzing how you spend your time and identify areas needing improvement, whether it's relationships, career, or personal growth.

Take a step-by-step approach to map out your vision and purpose. Set clear goals for yourself and ensure these align with your deeper values. Regularly revisit and adjust your plan to keep it relevant as life changes.

Strategic thinking isn’t just for business; by using it in our personal lives, we can create purpose, find joy, and overcome obstacles more effectively, making every decision count toward living the life we want.

_{ENLIGHTENMENT}

Short Squeez Picks

• Why the best workers receive useless feedback

• The best high-achievers are problem solvers

• The phrase that instantly disqualifies job candidates

• The rise of banker bro fashion

• The best bodega sandwiches in NYC

_{MEME-A-PALOOZA}

Memes of the Day