Volume 09 | December 04, 2018

💸 Weekly Business News 💸

Happy December, everyone! Welcome to ISOC's weekly newsletter! Here, we break down and analyze key current events in the markets, recent deals, and industry trends to help Wellesley College students better understand what's going on in the business world. Have any questions or comments? We love feedback! Email us at: isoc-eboard@wellesley.edu  Received this from a friend? Take a look at our previous editions , and join the conversation here .

First off... Upcoming Events 📅 ISOC Finance Insight Day Panel + Prep Workshop Thursday 12/6 7:30 PM in PNE 327 Many financial services firms have implemented programs to increase diversity in the world of finance. These diversity and insight programs are wonderful programs for students to learn about companies, network, and get a head start on recruiting . We welcome first-years and sophomores to attend our panel to learn more about these events, benefits of attending, and the application process. Our panelists, who are upperclassmen and have participated in multiple diversity and insight programs for various companies (GS, MS, JPM, MLT, BAML, BlackRock, etc.), will share their experiences and advice on navigating these programs and recruiting.This year, our panelists include: Shawn Luo, Chi Amaechi, Emily Yin, Gina Scorpiniti, and Jessie Xiao. The panel will be followed by an office hours-style workshop for attendees to ask more specific questions about their resumes, Hirevues, or anything else! RSVP on Facebook here .

How Wellesley Women Excel as CREST Interns Wednesday 12/5 5:30-7:00 PM in Harambee House Living Room Join industry leaders who are part of the Commercial Real Estate Success Training (CREST) Internship to learn about (1) summer 2019 internship opportunities with CREST, (2) how to apply, and (3) how CREST impacted Wellesley students last summer. The Commercial Real Estate (CRE) industry is the driving force behind the development of our cities and neighborhoods. And while CRE transforms our urban and suburban communities in ways that affect how we interact with our neighborhoods and our neighbors, the decision making process has traditionally neglected to include voices of all community members. Fortunately, our industry recognizes the benefit of inclusion and actively seeks to increase the representation of people of color and women within its ranks.  CREST offers 10 week PAID internships with companies representing the architecture, construction, development, brokerage, and finance markets. RSVP on Handshake here .

In the news 📢

Markets On Friday, markets ended on a rally after comments from Jerome Powell raised hopes that the Federal Reserve is close to ending its push to raise interest rates. Anticipation of a US-China trade deal at the G-20 summit also helped push stocks higher. What happened: Stocks soared 2.3 percent, erasing the losses from a rocky November after investors received indicators of lower-then-expected future interest rates and trade stability. Why? (1) Jerome Powell, chairman of the Fed, said the Fed’s benchmark interest rate was “just below” the neutral level, meaning the central bank thinks the economy is close to the point where it does not need stimulus or slowing down.Only last month, Mr. Powell had said it was “a long way” from neutral, leaving investors worried of rate increases. Lower rates fuel the economy by making it easier for consumers and investors to borrow and spend money. (2) Reuters reported Friday that a Chinese official said "consensus is steadily increasing" in U.S.-China trade talks, quashing some concerns over the potential impact of a trade war on the economy. Investors got what they were hoping for when Trump and Xi agreed on a trade war truce over the weekend, sending markets surging... BUT the president's tweets afterwards confused investors. First: The Dow jumped 288 points on Monday on relief about a 90-day ceasefire between the United States and China on trade. BUT: But as more information came out in the following days, investors are quickly realizing that the US-China trade war is not over. The tariffs already put in place remain. And new tariffs could be implemented if the two sides fail to make progress. A Trump tweet calling himself "a Tariff Man" did not help to mitigate worries.

M&A Deals Design and architecture software firm Autodesk (Nasdaq: ADSK) agreed to buy PlanGrid, a provider of construction productivity software, for $875 million in cash. This deal comes during a recent mini-boom in acquisitions of construction tech startups. What does Autodesk do? Autodesk is a design software conglomerate most known for AutoCAD, a professional design, drafting, detailing, and visualization software. It also develops 3D design, manufacturing, architecture, engineering, and digital entertainment software. What does PlanGrid do? When SF-based PlanGrid launched in 2011, it pioneered the move of construction blueprints from paper to the (then-fledgling) iPad, taking a world of hand-written mark-ups and sticky notes digital. This allowed for easier management and collaboration while minimizing hefty costs associated with manual errors. Why does this acquisition make sense? The digitization of construction fits with Autodesk's vision of digitizing all aspects of design. Plus, construction is often described as an industry ripe for technological transformation. Says the CEO, “The construction market is starting to move in the same direction as airplanes and cars moved years ago. Soon, you’re going to make a building the same way you make an airplane.” Construction-tech acquisition boom: In December of 2017, Oracle paid $1.2 billion for Axonex, a cloud-based solution that manages team collaboration for construction projects, and Trimble this past spring paid $1.2 billion for Viewpoint, a construction management software provider. Bonus read: Tracy Young, PlanGrid's female founder and CEO, is one of the rising stars in the construction industry. #BUILTBYWOMEN

Venture Capital Work management platform Asana has raised $50 million in Series E equity funding, valuing the company at $1.5 billion. The funding round was led by Generation Investment Management. What does Asana do? SF-based Asana is a web and mobile application designed to help teams simplify the process of organizing, tracking, and managing their work. What does it plan to do with the new money? Asana has been focusing on international expansion and artificial intelligence. Specifically, it plans to open an AWS-based data center in Frankfurt and set down more roots in Asia-Pacific, with offices in Sydney and Tokyo. It has also been gradually adding machine learning, predictive and other AI features to its platform. Enterprise cybersecurity firm Venafi has raised $100 million in funding led by TCV. What does Venafi do? The Salt Lake City-based cybersecurity company aims to secure the cryptographic keys and digital certificates that organizations depend on for secure communications. They protect the relationship between machines that control the flow of sensitive data. Customer list: Venafi said its product is used by the top five U.S. health insurers, the top five U.S. airlines, four of the top five U.S. retailers, and four of the top five U.S. banks. Electric vehicle charging network ChargePoint raised $240 million in Series E funding to serve the anticipated flood of electronic vehicles. The funding round was led by Quantum Energy Partners. What does ChargePoint do? California-based ChargePoint designs, develops and manufactures hardware and software solutions across every electric vehicle use case. Its network contains more than 57,000 independently owned public and semi-public charging spots. Timing: The company is preparing for an expected deluge of electric vehicles that will be introduced over the next four years. Automakers of every size and region, from GM and Volkswagen to Volvo and Jaguar Land Rover, have either launched an electric vehicle or are preparing to.

Industry Focus 🔎

Technology Marriott announced Friday that hackers had exposed the data of over 500M guests. The attack is the second largest known theft of personal records. What happened? The hackers had access to Marriott's Starwood reservation system from as far back as 2014. "If you made a reservation on or before September 10, 2018 at a Starwood property, information you provided may have been involved,” the company’s breach response page reads. What was stolen? Names, addresses, phone numbers, birth dates, email addresses and encrypted credit card details of hotel customers were stolen. Why? In recent years, cybersecurity experts said, the hospitality industry has become a rich target for nation-state hackers looking to track the travel movements and preferences of heads of states, diplomats, chief executives and other people of interest to espionage agencies. What does this mean for Marriott? Marriott may have to pay a large amount for fines and recovery fees. In 2016, Verizon cut what it paid to acquire Yahoo by $350 million after a breach was reported, and in 2017, Equifax reported recovery costs of $400 million from its breach which affected 148 million people. Google staff activism: employees pressure the tech giant over Project Dragonfly, censored and surveillance-enabled search engine for China. What happened? More than 200 Google employees co-authored an open letter to the company's leadership, arguing that Dragonfly would make Google complicit in human rights abuses by the Chinese government and urging them to cancel the project. What could Project Dragonfly look like? Google has said little about Dragonfly, but numerous reports have detailed its features, which reportedly range from blocking specific keywords like “human rights” to linking searches with users’ phone numbers. A moral and ethical dilemma: While many employees have spoken out against the project for supporting state surveillance, others feel that the Chinese population deserves access to Google services and information.

Healthcare Amazon is offering a new machine learning software that can mine medical records for information. It is the tech giant's latest foray into the healthcare space. What: The HIPAA-eligible software, called Amazon Comprehend Medical, uses machine learning and natural language processing to extract relevant medical information from doctors' notes, clinical trial reports and patient health records, accurately digitizing and processing medical records. Amazon's background in healthcare: Last year, the company was reported to have a team working exclusively on health-related projects, and over the past few months, it has teamed up with Berkshire Hathaway and JPMorgan Chase on a new healthcare-focused company. Over the summer, it purchased an PillPack, online pharmacy, and reportedly put together a health and wellness team within its Alexa division.

Consumer & Retail GM to halt production at 5 plants, cutting up to 14K jobs in an effort to cut costs and pivot to electronic vehicles and autonomous cars. What: General Motors will lay off up to 15% of its salaried workforce in North America and close up to five major plants as the auto giant restructures to cut costs and focus more on electric vehicles and autonomous cars.  Why: CEO Mary Barra said in a statement, "We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success." Not only will this keep the firm agile and flexible in a period of changing auto preferences, this move is projected to cut costs by $6.5 billion in 2018. Investor reaction: GM's stock price rose nearly 6 percent, signaling investors' approval of the company's move to cut costs. As an investor tweeted, this is "evidence that that auto market has changed forever, and kudos to GM for reacting early for a change."

Commodities Qatar leaves OPEC after 57 years of membership. The country framed the decision as a move to focus the country's resources on exports natural gas, denying political motivations. What: Qatar announced plans to pull out of OPEC on Monday, effective January 1, just days before the crucial 12/6 meeting between the oil cartel and its allies to determine production cuts. Why: (1) The official reason given by Qatar: Qatar is one of the smaller producers in the group (making up 2% of OPEC production) while it is a global leader in the production of natural gas. Said its prime minister, Qatar is unwilling “to put efforts and resources and time in an organization that [it is] a very small player in, and [we don't] have a say in what happens.” (2) What outsiders suspect: In 2017, Saudi Arabia, the de facto leader of OPEC, and three other Arab nations imposed a travel and trade boycott on Qatar, accusing it of financing terrorism and interfering in the internal affairs of other states, charges that Qatar has denied. Saudi Arabia has largely been dictating terms with regard to production on OPEC's behalf, a circumstance that has irritated other members such as Qatar. Impact: In terms of immediate oil market impact, due to Qatar's low output levels, there will not be much difference. It is the symbolism of a long-standing, Middle Eastern member leaving that has been more key. Qatar’s defection could raise questions about OPEC’s ability to enforce future production cuts as well as how well-equipped OPEC is to cope with a changing oil landscape in the face of the growing dominance of US oil.

Breaking the Glass Ceiling 🔨 Emily Cetlin '15 Associate Bank Loan Credit Analyst @ Eaton Vance This week, we are introducing  Emily Cetlin from the Class of 2015! At Wellesley, Emily majored in math and minored in computer science. She currently works as a credit analyst in the Associate Bank Loans group at Eaton Vance . Can you tell us about the bank loan group at Eaton Vance? Let me start by giving you a quick summary of what we do since leveraged loans are a little bit different. Eaton Vance invests in many asset classes that you may have heard of such as equities, high-yield bonds, and real estate. Loans are a subset of asset management that not as many people outside of the industry are aware of, especially at the undergraduate level. In leveraged loans, we invest in companies by lending them money and we earn our return through interest payments. We lend a piece of a much larger loan alongside many other investors. We lend to companies that you’ve heard of such as J. Crew, Neiman Marcus, Burger King, and Reynolds — everyday products — and to companies that you may not have heard of like software companies and semiconductor manufacturers. How has your Wellesley education benefitted you in your role? Math at the collegiate level is very theoretical — the theorems, proofs, and concepts I learned from my courses don’t apply to my job. However, the critical thinking skills I gained are very relevant. As an analyst, I help make investment decisions and I have to think about a company from all different angles. When I pitch investment ideas to my entire team, I have to be able support my investment decision. In that moment, there are no right or wrong answers. We may turn down a loan that turns out to be fine, or we could participate in a loan where it turns out that the company is unable to pay us back in full. It is impossible to know in that moment what the right answer is, and you have to construct an argument that takes all the information that you have and turns it into a buy or decline recommendation. At Eaton Vance, we feel that as long as you are hardworking, interested in the work we do, and a good critical thinker, we can teach you what you need to learn and give you the tools to become an analyst. Once you have the tools, you start picking up companies yourself and making investment decisions. The amount of responsibility we give our young people is pretty incredible. Read our full interview with Emily here . When you're done, give us a clap!