Issue 008 is here — the weekly business newsletter brought to you by Pretus. The free platform that helps you master the finance recruiting cycle with AI-driven interview prep for IB, CRE, WM, AM, & more + networking, behaviorals, and an exclusive ecosystem with 1-on-1 coaching and insights you can’t get anywhere else.

The S&P 500 fell Monday on Iran and yield concerns, recovered Tuesday on earnings optimism, and spent the rest of the week trying to figure out which direction it wanted to go. The index is roughly flat on the week. The number that actually matters is not the S&P. It is semiconductors.

Chip stocks officially entered bear market territory this week, down 20% from their June peak. The trigger was a Chinese startup called Moonshot AI, which released a model called Kimi K3 that took the top spot for front-end coding on Arena.ai, an independent AI benchmark site. It outperformed the leading American systems. The cost: $15 per million output tokens, compared to roughly $50 for comparable US models.

Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, reported a 77% jump in quarterly profit the same week. Its stock fell 7% in a single session anyway. The market was not trading on TSMC's results. It was trading on what Kimi K3 implies about the future demand for American AI chips. If Chinese models can match US performance at a fraction of the cost, the infrastructure buildout thesis that has been driving semiconductor valuations starts to look different.

Alphabet reported the same week. Google Cloud revenue came in at $24.8 billion, up 82% year over year. The Cloud backlog hit $514 billion. The company raised its full-year capex guidance to $205 billion. The stock fell. Record results, more spending, and investors pulled back anyway. The pattern this week was consistent: strong fundamentals, complicated reaction.

Iran continues. US strikes against Iranian targets entered their 11th round this week. Oil is holding at $75 to $79 per barrel. That elevated energy price is the thread connecting everything — it keeps inflation in play, which keeps the Fed in play, which keeps July 29 in play.

EasyJet, Europe's second-largest budget airline, agreed this week to a $6.7 billion takeover by Castlelake, a US private equity firm. The board accepted. This matters because EasyJet's board had already rejected four previous bids from the same firm.

That is the part worth understanding. Castlelake did not succeed by being clever. It succeeded by being persistent and eventually paying more. The price moved, the structure likely changed, and as shareholders watched the share price stagnate while the offer sat on the table, board pressure to negotiate rather than reject built over time. That is the hostile-to-friendly arc that shows up repeatedly in large M&A transactions.

The formal offer must be submitted by August 3 or Castlelake walks away under UK Takeover Panel rules. The same rules that set the Prologis/Segro deadline last week apply here.

Why does private equity buy airlines? At first pass, it looks counterintuitive. Airlines are capital-intensive, cyclically volatile, subject to fuel price swings, labor constraints, and geopolitical risk. PE firms typically want predictable cash flows and clean exit paths.

The thesis here is different. When a cyclical business trades at a depressed valuation because the cycle is down or the public market is pricing in too much uncertainty, a PE firm can acquire it, restructure operations, reduce costs, and hold it through the cycle. When sentiment improves and the business is leaner, the exit multiple is higher than the entry multiple. The return comes from operational improvement and timing, not from buying a safe business. Castlelake specializes in credit and asset-based investing, which makes an asset-heavy airline a natural fit for its strategy.

For your interviews: take-privates are one of the most common deal structures in PE recruiting conversations. Know what they are, why they happen, what PE looks for when evaluating a cyclical asset, and what the exit path typically looks like. EasyJet is a live, current example you can reference right now.

Six weeks ago, zero Federal Reserve officials projected a rate hike in 2026. This week, nine do. The July 29 meeting is six days away and the probability of a 25-basis-point hike sits at 46.5% on CME FedWatch, up from 34% earlier this week.

Fed Governor Christopher Waller said this week that policymakers "may need to raise rates" if underlying inflation continues to signal broad price pressure. The signal he is watching is exactly what is happening: oil at $75 to $79 on sustained Iran conflict, services inflation still sticky, and a labor market that has not broken down enough to give the Fed cover to hold.

JPMorgan Asset Management CIO Bob Michael put it plainly: "Every meeting is now live."

That phrase is worth sitting with. Under the previous Fed leadership, markets had a reasonable read on what was coming. Rate decisions were telegraphed well in advance. Under Kevin Warsh, the calculus has changed. He is data-dependent in a way that makes each meeting genuinely uncertain. That uncertainty itself is a market event — it keeps yields elevated, keeps credit spreads wider than they would otherwise be, and keeps deal teams cautious on timing.

What a hike on July 29 would mean across the verticals you are recruiting into:

For IB: higher borrowing costs compress deal valuations and raise the cost of leveraged buyouts. Sponsors need higher returns to justify the same entry price. Deal volume does not collapse, but the math gets harder.

For AM: fixed income managers who positioned for cuts get caught offside. Duration risk reprices. It is a rotation moment.

For WM: client conversations shift. Clients holding cash earn more. Clients in long-duration bonds see paper losses. The advisor who can explain why matters more than the one who just reports the number.

For CRE: cap rates expand when risk-free rates rise. Property valuations fall. Transaction volume slows as the bid-ask spread between buyers and sellers widens again. The Prologis/Segro deal getting done last week looks better in hindsight if rates are going up from here.

Watch July 29. Whatever the Fed decides, the language in the statement and the press conference will move markets more than the decision itself.

Next issue: Forward this to someone who needs it. More next week.

— Clip’d by Pretus