Markets cheer Bessent, CI Financial goes private, Bitcoin shy of $100,000
My husband had a small parade thrown for him yesterday. He brought our three children to a birthday party without me and was met with high-fives and accolades. “Wow, you brought them by yourself?” “You are such a good dad!” Honestly, he deserves the praise. He is a wonderful partner, an incredible father, and I am grateful I can rely on him. I’m just saying that when I took the kids for several hours in the morning to their art class the only thing I was met with upon my return was: “So, what’s for lunch?”
Royal Bessent: Investors appear thrilled with Scott Bessent’s appointment as Treasury Secretary. The announcement came out late Friday. This morning futures and bonds are rallying while the US dollar is under pressure. The thought is that Bessent will not be as heavy-handed when it comes to tariffs but will be aggressive when it comes to delivering tax cuts. Oil is struggling, as Bessent is expected to push for more US oil production. Last week the S&P 500 and the TSX notched gains every single day and the TSX is on a three-week hot streak closing at a record high on Friday. This is a shorter trading week for US investors with American Thanksgiving this Thursday.
M&A Monday: CI Financial will be bought out by UAE sovereign wealth fund Mubadala in a deal that was announced this morning. Mubadala is paying a 33% premium ($32/share) for the asset manager in a $3.4 billion go-private. CI Financial says it will continue to operate with its current structure and CEO Kurt MacAlpine will continue to lead the company. Under MacAlpine, CI Financial has embarked on a growth-by-acquisition expansion into the registered investment advisory business in the United States. They are now one of the top three players in the US. I’m told this was what attracted Mubadala in the first place. While $32/share is a nice premium to the recent close, it is only a few dollars away from the peak in 2021. Will there be a competing bid? Unlikely, according to a source I spoke with this morning. Discussions with Mubadala began a few months ago, according to the source. While others like Canadian banks and insurance companies kicked the tires, none advanced as far. The Globe is also reporting there was US private equity interest. I am told that for the banks a deal like this would have negatively affected bank capital due to the way OSFI would have looked at it. CI says it plans to maintain its headquarters in Canada.
Bad actor: Macy’s is delaying its quarterly results after finding out one of its employees hid more than $100 million in expenses. Yikes. Macy’s says an employee intentionally hid expenses over several years. The stock initially plunged 8% pre-market but now is only down about 3%. Macy’s says the malfeasance didn’t affect overall cash management of the business. The department store did put out preliminary sales results that showed a 2.4% drop in sales, which was a little worse than feared. However, the company will now report results after Black Friday which may give investors a better window in the crucial holiday selling period.
Smells like success: Shares of Bath & Body Works are soaring nearly 13% after earnings came in better than expected. The retailer is also boosting its forecast saying sales won’t fall as much as feared. The CEO, who has had the top job for nearly two years, said the results exceeded even their highest expectations and highlighted their mainly US-based supply chain. A feature that may be more important for the incoming Trump administration.
Wen $100,000: Bitcoin still hasn’t hit $100,000. That’s it. That’s the post.
