This past week was packed with headlines as the President and politicians in Washington played a big role in the market’s performance. Risk Analyst Shaan Shuster ’23 gave an update on how President Trump’s tweets and congress’s ongoing stimulus negations are affecting markets. The Dow and S&P 500 plummeted on Thursday after President Trump tweeted that he had requested there be no stimulus negotiations until after the election. However, the drop was short-lived as Trump appeared to show his support for a new stimulus bill in new tweets later that night. Investors saw this as a positive sign and after President Trump changed his tone toward a stimulus package, equities continued to rally into Thursday. Fed Chairman Jerome Powell’s emphasized the need for a second stimulus package saying that “Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses. Even if policy actions ultimately prove to be greater than needed, they will not go to waste.” In election-related news, polls are predicting a sizeable Biden win, and the fears of a “contested election” are beginning to subside.
Marketing Director Jack Evans ’22 analyzed some of the top stories of the week including a possible breakup of big tech, continued talks on an airline bailout, and Morgan Stanley’s acquisition of Eaton Vance. On Tuesday the Democrat House Antitrust Subcommittee released a 449-page Report. The Report called for Congress to look into forcing the major tech companies to separate their various holdings and businesses. It targeted Amazon, Apple, Facebook, and Google and it also attacked the government’s antitrust organizations for failing to keep the companies in check. One of the quotes that stood out was “Our Democracy and our Economy are at stake”. All four companies released statements that completely disregarded the committee and strongly denied the report’s findings. An interesting piece of the report was an interview with a former Facebook employee who said that there was an organized effort within Facebook to try and separate the businesses of Facebook and Instagram in order to avoid additional antitrust regulation. This leads to the question of whether or not Facebook should be allowed to own two seemingly competing social media platforms under one company? While the report presented some serious accusations, it will most likely lead to very little change in the near future. However, it accompanies a growing movement that could lead to more regulation further down the line, especially with the possibility of a “Blue Wave” coming in the house and senate this fall.
In more stimulus-related news Speaker of the House Nancy Pelosi came out on Thursday morning and said that there will be no airline stimulus unless it is connected to a larger general stimulus bill. Many Republicans also oppose a stand-alone airline bill, citing the fact that it will leave other hard-hit leisure industries behind. The commercial airline industry is getting absolutely clobbered during the COVID-19 pandemic. While airline traffic is slowly inching higher, experts believe it will take years for demand to fully recover. If they don’t get any help from the government airlines have warned that up to 100,000 aviation jobs may have to be eliminated. They are burning cash at an absurd rate and are projected to lose around $77 Billion in cash in the second half of 2020. The ETF that tracks U.S. and international airlines, aircraft manufacturers, airports, and terminal services companies, JETS, is down ~ 44% since the highs in February.
The big story from early Thursday morning was the Morgan Stanley acquisition of fund manager Eaton Vance Corp. for $7 Billion. As Financials Analyst Brett Berger ’22 presented a few weeks ago, Morgan Stanley just completed their $11 Billion deal for E*TRADE. This recent purchase continues CEO James Gorman’s push to expand Morgan Stanley’s wealth and investment management businesses. Morgan Stanley now joins the Trillion Dollar Club as their Investment Management Assets come in at around $1.2 Trillion after the deal. Back in 2009, Morgan Stanley had to sell off some of their investment management assets in order to recover from the financial crisis, these recent acquisitions are helping expand their business. Gorman called Eaton Vance a perfect fit for them, but he did also say that this will be Morgan Stanley’s last acquisition for a while. He will now shift his focus to integrating the two companies into the bank. Morgan Stanley shares rose 1.2% and Eaton Vance shares jumped 47.7% after the news broke.
Mikias Stewart ’23 analyzed the recent surge in the price of Beyond Meat’s stock price. Beyond Meat is a Los Angeles-based producer of plant-based meat substitutes, and Mikias has been watching the company and its stock closely. He cited that the main reason behind Beyond Meat’s recent growth is the company’s expansion into larger stores such as Kroger, Target, Walmart.
Co-Presidents Alec Cwienkala ‘21 and Noah Grossman ‘21, and Vice President Connor Thatcher ‘21 gave an important presentation on the Dos and Don’ts of Professional Networking.
DOs:
- Have your “Elevator Pitch” ready.
- Do your homework – Know the person’s background, what they do, their company, etc.
- Prepare Questions – Ask job-specific questions to show that you have a genuine interest.
- Listen and learn – Be a sponge, don’t do all the talking.
- Make a personal connection.
- Use LinkedIn and job sites to continue the process.
- Be patient – Don’t get upset if they don’t follow up right away.
- Follow up yourself – Send a handwritten note or a professional email as a thank you.
DONTs:
- Don’t “Use” people – Build a professional relationship, don’t just use them for their connections.
- Don’t ask for a job.
- Don’t disrespect your contact’s time – Make sure you make the meeting worth their time.
- Don’t expect instant results.
TMT Analyst Nick Sant Foster ’22 closed out our meeting with a quick LinkedIn networking tutorial. The Lafayette College LinkedIn page is a great way to discover alumni in financial services, and Nick took the club through how to connect with an alumnus based on company, location, major, and industry.
Sources/Articles for Additional Reading
Stocks Drop After Trump’s Tweets – CNN Business
Fed Warns of Consequences with No Stimulus – Business Insider
Antitrust Suit Against Facebook – WSJ
Pelosi Says No Stand-Alone Airline Stimulus – Financial Times