Daily Brief - 12 July 2024

Cooling inflation, shifts investments from tech giants to smaller stocks

Signs of cooling inflation have investors betting on Fed rate cuts, leading to a big shift in stock markets.

Money moved from big tech to smaller companies, causing the Russell 2000 to outperform the Nasdaq 100 significantly. The S&P 500 saw a slight drop, but most of its stocks went up. Treasury yields fell and the dollar dropped.

Real estate and financial stocks had a strong day, while Tesla's delay in its robotaxi unveiling hurt its shares. Overall, a broader market rally is hoped for as investors diversify.

Ackman eyes $25 billion IPO for Pershing Square fund, inspired by Berkshire

Bill Ackman is planning the IPO of Pershing Square USA Ltd., aiming to raise $25 billion. He compares the new fund to Warren Buffett's Berkshire Hathaway, hoping to create lasting wealth.

Ackman plans to hold regular meetings with investors, similar to Berkshire's annual gatherings. The fund will target large, growth-oriented North American companies.

A unique feature is its 2% management fee, with no performance fees, unlike its European counterpart. Ackman’s experience and confidence in outperforming the market are key selling points for potential investors.

Business Insider owner, Axel Springer considers splitting media and classifieds units

Axel Springer SE, owner of Politico and Business Insider, is discussing splitting its media assets from its digital advertising and classifieds businesses. Private equity firm KKR is interested in the classifieds unit, while CEO Mathias Döpfner would gain more control over the media properties.

The split would end a nearly five-year partnership between Döpfner, founder's widow Friede Springer, and KKR. Axel Springer's media side has expanded in the US, while its classifieds portfolio includes StepStone and Aviv.

No final decision has been made yet, and both KKR and Axel Springer declined to comment.