CHEVRON: Acquires Hess for $53 Billion

On Monday, Chevron announced its intention to acquire Hess for $53 billion in stock, marking the second major merger proposition among top U.S. oil giants following Exxon Mobil's $60 billion offer for Pioneer Natural Resources earlier this month.

This prospective merger intensifies the rivalry between Chevron, which ranks second among U.S. oil and gas producers, and industry leader Exxon. It places Chevron head-to-head with Exxon in the race to tap into the budding oil resources in Guyana.

Furthermore, the deal underscores Chevron's strategy to persistently invest in fossil fuels, following sustained demand for oil. Large oil companies also leverage acquisitions to restock reserves after prolonged periods of under-investment.

For the acquisition, Chevron is proposing 1.025 of its own shares for every Hess share, equivalent to $171 per share. This represents a ~4.9% premium on Hess's most recent closing price. The deal's aggregate value, including debt, is $60 billion.

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10-Year Treasury: Tops 5%

The yield on the 10-year Treasury note surpassed 5% for the first time in over a decade, driven by the anticipation that the Federal Reserve will keep interest rates high and the government will increase bond issuances to manage growing deficits.

The yield climbed to a peak of 5.02%, a level not seen since 2007. Last week, Federal Reserve Chairman Jerome Powell indicated that while the central bank will likely maintain current rates in their upcoming November session, they could consider rate hikes if a robust economy heightens inflationary concerns.

The 10-year Treasury bond is frequently viewed as the benchmark "risk-free" rate against which all other investments are compared. An increase in its yields will have cascading effects on global markets, influencing borrowing costs for households, businesses, and governments in the U.S. and internationally.

ROCHE: Agrees to Buy Televant

On Monday, Swiss healthcare firm Roche declared its intention to buy Telavant Holdings in a deal valued at $7.1 billion.

Telavant specializes in creating medications for individuals with inflammatory and fibrotic conditions and is currently working on an "encouraging new treatment" for those with Crohn’s disease, as mentioned in a Roche press statement.

Roche would gain rights in the US and Japan to develop and market the drug known as RVT-3101. Inflammatory bowel disease comprises long-term gastrointestinal conditions that impact nearly 8 million individuals globally. Of these, ~80% struggle to find lasting treatments.

Telavant Holdings is owned by Roivant Sciences, founded by Republican Presidential Candidate Vivek Ramaswamy.

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Breaking The Bank of England

You might know him as the controversial money machine behind multiple political campaigns or his charitable donations. However, George Soros is one of the greatest investors ever to live. In fact, he has built an $8 billion net worth just from trading stocks.

In 1992, England faced economic hardship, where the economy faced high inflation and slow growth. England made a deal with Germany where 1 pound was worth 2.7 Deutchmarks. George Soros realized this deal was utterly unrealistic and made a $10 billion bet by shorting the pound.

On a day now known as Black Wednesday, England was forced to abandon the deal, and The British pound crashed. George Soros profited $1 billion from this trade; the rest is history.

Chart of the Day

📊 Nasdaq vs. Treasuries

Tech stocks could be the next to fall - from Sept 2011-Dec 2022, the U.S. 10-year Treasury yield had been directly correlated.

The author, publisher or insiders of the publisher may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.