First Step to Final Offer (12/19)

Author

Brooks Gammill
December 19, 2023

CAREER OPPORTUNITIES

Class of 2024

Moelis Full-Time Industrials Investment Banking Analyst (NYC) - Link Here

Moelis Full-Time Clean Energy Investment Banking Analyst (Houston) - Link Here

Sweetwater Private Equity Analyst (Charleston, SC) - Link Here

Class of 2026

RBC Summer 2025 Applications - Link Here

Insight Partners Summer 2025 Applications - Link Here

Houlihan Lokey Summer 2025 Applications - Link Here

Rothschild Summer 2025 Applications - Link Here

Guggenheim Summer 2025 Applications - Link Here

Deutsche Bank Summer 2025 Applications - Link Here

Aeris Partners Summer 2025 Applications - Link Here

Union Square Advisors Summer 2025 Applications - Link Here

GTCR Summer 2025 Applications - Link Here

Stout Summer 2025 Applications - Link Here

Deloitte Corporate Finance Summer 2025 Applications - Link Here

Wells Fargo Houston Office Summer 2025 Applications - Link Here

Guggenheim Sophomore Focus Program [Upcoming] - Link Here

Deutsche Bank dbAchieve Sophomore Summer Internship - Link Here

Centerview Women’s Leadership Program Networking Event - Link Here

Moelis Virtual Discover Series - Link Here 

William Blair Fast Track to Investment Banking Program - Link Here

Perella Weinberg Partners Advisory Diversity Prep Program - Link Here

Class of 2027

Guggenheim Freshman Enhancement Program [Upcoming] - Link Here

Moelis Virtual Discover Series - Link Here 

Morgan Stanley Freshman Enhancement Program - Link Here

J.P. Morgan Freshman Focus Program - Link Here

MARKET NEWS

  1. Recent data shows AI job losses are rising, but the numbers don’t tell the full story (CNBC)

Elon Musk predicts that artificial intelligence (AI) will eliminate the need for jobs, but a recent report from ResumeBuilder suggests that 37% of businesses have already seen AI replacing workers in 2023, with 44% expecting layoffs in 2024 due to AI efficiency. However, experts argue that these numbers may not reflect the broader business landscape, and layoffs are often driven by fear rather than reality. Some argue that AI's impact on the workforce allows humans to focus on higher-value tasks, akin to the historical shift from typists to word processors, and advocate for a "human-centered AI" approach that enhances collaboration rather than replacing people outright.

  1. A $6T cash hoard could fuel more US stock gains as Fed pivots (RT)

Investors are closely watching the nearly $6 trillion in cash on the sidelines as soaring yields led many to park funds in money markets while awaiting the Federal Reserve's actions against inflation. The Fed's unexpected dovish shift may prompt investors to reassess and potentially deploy cash into stocks and other risky assets, particularly if borrowing costs are expected to fall in 2024. However, not all cash in money market funds may be available for investment, and historical trends suggest that the majority of cash tends to stay in money markets even as rates decrease. Despite record-high money market fund assets, their size relative to the S&P 500 is currently smaller than in past peaks, indicating that the market's risk appetite remains visible.

  1. Yellen outlines plan to improve US-China ties (CNBC)

U.S. Treasury Secretary Janet Yellen emphasized her priorities in stabilizing relations between the United States and China, stating that preventing escalation is crucial for the safety and security of both economies and people worldwide. Yellen acknowledged strong disagreements between the two countries and highlighted plans to press Beijing on its economic policies, emphasizing the importance of understanding China's plans given its significant global economic influence. Yellen also identified collaboration on climate change as a priority and mentioned ongoing efforts to exchange information about modeling climate stress scenarios. Additionally, she discussed the potential for collaboration on anti-money laundering and countering the financing of terrorism, including addressing illicit finance risks associated with cryptocurrency.

  1. Congress passes $886B defense policy bill (CNBC)

The U.S. House of Representatives voted in favor of a defense policy bill, the National Defense Authorization Act (NDAA), with a record $886 billion in annual military spending. The NDAA, supported by over two-thirds of the House, includes provisions such as aid for Ukraine and measures to counter China in the Indo-Pacific. The bill also authorizes a 5.2% pay raise for troops and covers various defense-related expenditures, becoming one of the few major pieces of legislation passed annually for 63 consecutive years. The final version excludes contentious provisions on social issues, and it now awaits President Joe Biden's signature.

  1. Michael Milken says the Fed won’t move too early and risk massive inflation like the 1970s (CNBC)

Famed investor Michael Milken anticipates that the Federal Reserve will proceed cautiously on monetary policy, drawing lessons from history to avoid a repeat of the 1970s inflationary period. Milken expects the Fed to prioritize curbing inflation before considering rate cuts, emphasizing the need to learn from the mistakes of the past when early moves led to a resurgence of inflation. He suggests that the Fed is likely to lean towards discipline in its current approach to assess the situation before making significant policy adjustments. Fed Chair Jerome Powell's upcoming announcement will be closely watched for insights into the central bank's stance on rate cuts.

M&A DEAL OVERVIEW
Pfizer’s $43bn Acquisition of Seagen

Pfizer is set to acquire Seagen for $43 billion, marking its largest acquisition fueled by Covid-19 revenue. The deal aims to strengthen Pfizer's presence in oncology, doubling its early-stage oncology clinical pipeline. Pfizer anticipates $1 billion in cost savings over the next three years and foresees Seagen contributing over $10 billion in risk-adjusted revenues by 2030. Key risks include potential regulatory hurdles and the relatively high valuation of Seagen, but successful integration could position Pfizer as a leading player in innovative cancer care.

TECHNICAL TOPIC OF THE WEEK
How do you calculate the weighted average cost of capital?

WACC = (cost of equity)*(% equity) + (cost of debt)*(1 - tax rate)*(% debt)

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Written by Beckett Kreter 
Formerly BK. Finance Newsletter (Acquired by RecruitU)