🔥The Big Headline

🤔 Here's the skinny: JPMorgan is taking over First Republic Bank's assets and deposits after the FDIC shut them down. Apparently, other banks had submitted bids, but JPMorgan snagged the deal.

The FDIC estimates it will cost $13B to the Deposit Insurance Fund. Jamie Dimon said the acquisition would modestly benefit the company, was accretive to shareholders, and helped further advance their wealth strategy. The deal is expected to bring in over $500M of incremental net income per year, which works out to about 17 cents per share for JPMorgan's outstanding shares. The bank will remain very well-capitalized and maintain healthy liquidity buffers. Analysts are going to discuss the deal on a conference call later this morning. Overall, this seems like a positive move for JPMorgan, but we'll have to wait and see how it plays out. 👀

🌍 Breakfast

What’s happening: Today, the US equity futures are pretty much unchanged while most of Asia and the major European markets are closed. However, the manufacturing PMI in China fell short of expectations, indicating ongoing sluggish conditions in the industrial sector. On the brighter side, Macau's gaming revenue surged 450% YoY, which exceeded the Street's forecast. Media reports suggest that consumer spending and travel over the May Day holiday is very strong. On the earnings front, First Republic will be acquired by JPMorgan, generating more than $500M of incremental net income annually. Later in the day, investors will be keeping an eye on the US manufacturing ISM and earnings from companies like ANET, CAR, INVH, LSCC, MGM, NXPI, SBAC, SYK, and VNO.

🤔 Our take on stocks: As for how we're thinking about stocks, earnings are still our North Star. We believe the strength of Q1 results will continue to put upward pressure on the market. Although the situation with regional banks isn't a systemic crisis, investors are likely to celebrate the resolution of First Republic. The Fed's decisions on Wed and Thurs could create some brief volatility, but we believe that inflation and monetary policy are at dovish inflection points globally. Valuations remain expensive, but not prohibitive, given the approaching monetary pivot. The debt ceiling is still looming on the horizon without any movement in Washington toward a compromise.

🌍 In other news: China is cracking down on the export of critical economic data as President Xi focuses on national security amid concerns that the US poses an existential threat to the Communist Party.

🍴 Company News

🏦 Deutsche Bank plans to boost its M&A advisory business by hiring more advisors. This could be good news for companies looking to make deals, but whether or not it will help Deutsche Bank's own struggling bottom line remains to be seen.

💎 Exor NV, which is owned by the Agnelli family in Italy, is on the hunt for luxury acquisitions. Looks like they're trying to ball out in the high-end market, but let's hope they don't blow all their cash on a diamond-encrusted yacht.

💻 India's top tech companies, including Tata, Infosys, and HCL, are preparing for a slowdown in revenue growth. Bummer for them, but maybe it's time for them to pivot and start selling NFTs or something.

💰 Astellas Pharma is buying Iveric Bio for $5.9 billion in cash. That's a lot of money, but it's good news for Iveric shareholders who can now cash in their chips and move on to the next big thing.

💳 JPMorgan is taking over First Republic Bank after it was seized by the FDIC. This deal is expected to generate more than $500 million in annual net income for JPMorgan. Looks like JPMorgan is living up to the old saying: "If you can't beat 'em, buy 'em."

🏢 The latest data on physical occupancy in New York City's office real estate market is expected to be more positive than the Kastle Back-to-Work Barometer. Maybe people are finally getting over their fear of going back to the office, or maybe they're just tired of working from their couch.

🍔 The banks running the auction for Subway are offering a $5 billion financing package to potential private equity buyers. Who knew that buying a sandwich chain could cost so much? Hopefully, whoever buys it will have better luck than Jared.

🛢️ TotalEnergies says it trades at a discount to rivals like Chevron because it's not listed in the US. Sounds like a classic case of FOMO to me. But who needs the US market when you can have the whole world, right?

💳 UBS may spin off Credit Suisse's Swiss bank after completing the deal. Looks like UBS is playing the long game and planning ahead. Let's hope they don't get too dizzy from all the spinning.

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