☕️ Earnings test

Good morning.

Traders and analysts are wondering if this year’s S&P 500 US$8 trillion ($11.78 trillion) rally is about to hit a wall—with forecasts for earnings growth in the upcoming 3Q reporting season slashed to 4.7%, down from 7.9%, according to Bloomberg.  Geopolitical risks, the Fed’s dance with rates and the US election are adding pressure.

Meanwhile, the FT is pointing out some investors are chasing value in European stocks with big US exposure, including in names like Novo Nordisk and BAE Systems. They’re cheaper, but still getting a cut of the buoyant US action.

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Market movers

Light & Wonder shares jumped 7.78% after announcing a new version of its Dragon Train poker machines, in response to a US court injunction that halted production of the original. Rival Aristocrat claims the game infringed on its Dragon Link machines, so Light & Wonder is moving ahead with a court-mandated revision.

The quick sync

• Albanese's Fowler campaign derailed by Middle East crisis, risking focus on his domestic agenda. (Capital Brief)

• Google threatens to cut ties with New Zealand news publishers over a proposed "link tax," echoing its tough stance from Australia. (Capital Brief)

• RBA speeches, key economic data and housing policy debates headline a busy week for Canberra and markets despite public holidays. (Capital Brief)

• US jobs report smashes expectations, shaking Fed cut bets and pushing markets higher. (Capital Brief)

• Taxpayers paid McDonald's $72m under a Morrison-era training subsidy, sparking union outrage while the fast-food giant boosted profits and funnelled dividends to its US parent. (AFR)

Trading floor

M&A

• Kinetic's $4bn sale has been delayed, with no buy-side mandates signed and the bid deadline extended by a week. (AFR)

• Blackstone's bid to add pokies to Crown Sydney was knocked back by NSW. (AFR)

• Aurizn, backed by Pemba Capital, acquired McR Defence and appointed a new CEO as part of its growth and expansion plans. (AFR)

• Permira may cancel the I-MED sale if bids are unsatisfactory, but strong interest exists, with hopes for a sale of at least $3bn. (The Australian)

• Arcadium Lithium shareholders urge the board to reject Rio Tinto’s $5.8bn bid, calling it too low and pushing for a price around $8bn. (AFR)

• EMR Capital has hired Bank of America and Macquarie Capital to sell its $3bn Kestrel coal mine. (The Australian)

• The Takeovers Panel will review its earlier decision on Rio Tinto's uranium deal with ERA, possibly reversing its clearance of a contentious equity raising. (AFR)

• Private equity firms are bidding over $1bn for Waste Services Group, highlighting continued interest in waste management, despite setbacks in Macquarie's Bingo deal. (AFR)

• Kohlberg Kravis Roberts has pulled out of the $3bn Loscam logistics deal after the owners decided to sell only 40% of the business instead of the whole unit. (The Australian)

Capital Markets

• Boman Group invested $10m in OpenAI’s $9.6bn funding round, valuing the AI company at $229bn. (AFR)

• Goldman Sachs and JPMorgan are expected to secure mandates for HMC Capital’s $2bn-plus digital infrastructure fund float. (The Australian)

• Antler raised $77m for its second Australian fund, surpassing its $60m target to boost startup funding. (AFR)

VC

• Enrola secured $800K in pre-Seed funding to scale its education comparison platform and grow partnerships with training organisations. (Startup Daily)

• Lorikeet, an AI-based customer support startup, raised US$5m in Seed funding to scale its platform for clients like Chemist2U. (Startup Daily)

People moves

• Todd Guyot, senior portfolio manager at Regal Funds and key figure behind its $579m small caps fund, passed away at 57. (AFR)

The watercooler