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What’s Happening With Wall Street Summer Internships
With New York City in lockdown for some time, thousands of graduates are worried about the future of sought-after Wall Street summer internships. Here’s what Michael found out about what big financial companies do.
Many are pushing back their start dates. Citigroup, Goldman Sachs and JPMorgan Chase postpone the start of their internships to July 6, from June. All three companies told interns they would still be paid for the full nine to 10 weeks their programs were to run.
• Citi said summer interns in New York, London, Hong Kong, Singapore and Tokyo would receive full-time job offers after graduation, provided they meet minimum program requirements of this summer.
Some are going virtual, or at least considering it. Morgan Stanley told incoming interns that most of its internship program this year will take place online (which, as it happens, mimics what many full-time bankers and traders are doing during the pandemic).
• After being told that the JPMorgan internship would be virtual, a poster on the Wall Street Oasis forum mentioned“RIP to all those shirts and pants I bought.”
Some companies don’t change their plans At least for the moment. Bank of America and Blackstone fall into this category.
• A complete list of active, amended, and canceled summer internship programs—inside and outside of finance—is being compiled here.
Rescue the Small Business Rescue Fund
The White House and Democratic lawmakers are close to agreement to replenish the small business emergency fund that ran out of money last Thursday. But the details are still being worked out.
Potential deal would provide $300 billion for the Paycheck Protection Program, $50 billion for the Small Business Administration’s Disaster Relief Fund, and $100 billion for hospitals and coronavirus testing. Treasury Secretary Steven Mnuchin said yesterday he hoped the Senate would vote on the bill today and the House tomorrow.
The Epic Rise and Fall of Elizabeth Holmes
The story of the Theranos founder, from a $9 billion valuation to a conviction for fraud, has become a symbol of the pitfalls of Silicon Valley culture.
Meanwhile, contentious issues in the small business agenda continue to emerge. One is that some large restaurant chains, such as the Potbelly sandwich chain and the Ruth’s Chris line of steakhouses, have claimed money from the federal fund for businesses with fewer than 500 employees. (Catering businesses are exempt from the size limit.)
• The Shake Shack burger chain, which received $10 million from the scheme, said it repay his loan “so the restaurants that need it most can get it now,” according to its CEO, Randy Garutti. Instead, the chain raised funds on the stock market.
In other lifesaving news, Harvard takes heat for receiving $9 million in federal aid as part of recovery funds for higher education. “You have a $41 billion endowment,” venture capitalist Chamath Palihapitiya underline.
New challenges to revive the economy
As the United States figures out when to reopen for business, states face more testing issues and vocal opposition to longer lockdowns.
Flaws in diagnostic tests thwart state plans for the reopening of their economies. The Times reports that many antibody tests, intended to flag who may be immune to the coronavirus, are often inaccurate. Authorities hoped these tests would show who could safely reenter society.
Protests over lockdown orders keep popping upincluding an gathering of more than 2,000 people in Washington State over the weekend. Pushing for a faster reopening appears to be a minority view: nearly 60% of respondents in a new WSJ/NBC poll fear that lifting stay-at-home orders too quickly could worsen the pandemic.
For a preview of what might be in store in the coming year, read these predictions from two dozen medical experts. Among them: periodic shutdowns, no quick vaccine — even 18 months might be too optimistic — and a growing appreciation for international cooperation.
The oil market is under pressure
Crude prices are 20 year low through a glut of supply and a shortage of demand.
It’s worse in the US due to technical details on futures contracts and signs that the country’s oil storage is almost full. The price of West Texas Intermediate crude fell more than that of Brent, the international benchmark.
• Bloomberg reports that “Texas buyers are offering as little as $2 a barrel for some oil streams, suggesting that U.S. producers will soon have to pay their customers to dump crude.”
What obsesses the energy marketshowever, is $800 million in hidden losses at Singapore’s largest trading company, Hin Leong. The grim details were revealed in court documents as part of the company’s bid to secure an extension of repayment of nearly $4 billion in debt. More than 20 banks are named in the dossier.
How Elizabeth Holmes could be acquitted
Peter J. Henning is a professor at Wayne State University School of Law and previously worked in the SEC’s Enforcement Division and the Fraud Section of the US Department of Justice. He writes the “White collar watch” column for DealBook.
Last week, the federal judge presiding over the trial of Theranos co-founder Elizabeth Holmes, postponed to october. When the proceedings resume, a different ruling by judge Edward Davila of the U.S. District Court in Northern California could prove far more significant, namely giving him a chance of acquittal.
Former Ms Holmes and Theranos chairman Sunny Balwani is facing criminal fraud charges, with prosecutors saying they knowingly misled investors about the effectiveness of their blood testing system. Both pleaded not guilty.
Before the postponement, Judge Davila ordered separate trials for Ms Holmes and Mr Balwani. Ms Holmes, whose trial comes first, can now defend herself without being too closely linked to Mr Balwani, with whom she had a romantic relationship.
The wire fraud charges she faces may be countered by an argument that she acted in “good faith,” meaning she believed Theranos’ blood analyzer would work as advertised to customers. and investors. This may compel her to testify, and this is easier if she does not have to appear alongside Mr. Balwani or be tied to his statements or the evidence presented at his trial.
If the jury does not believe her testimony, there is a reasonable chance that Ms. Holmes will be convicted of wire fraud. Standing on the stand alone, she has a chance to persuade a jury to believe that she honestly believed the Theranos analyzer would work with just a few drops of blood and that the supposedly groundbreaking company had a bright financial future because of it.
The week ahead
Approximately a fifth of S&P 500 companies announce their latest earnings this week, along with other top global companies. Here are the highlights, in ascending order of severity of the coronavirus pandemic.
💻 IBM (Monday) and Intel (Thursday) are expected to see higher profits as remote workers increase demand for technology in general and cloud computing in particular.
📈 The London Stock Exchange (Tuesday) and Nasdaq (Wednesday) benefited from a spike in trading volumes during the market turmoil. But how long will this last?
📺 netflix (Tuesday), AT&T (Wednesday) and Verizon (Friday) will quantify the streaming boom during confinement.
🥤 Coca Cola (Tuesday) and Unilever (Thursday) are selling more through grocery stores, but have also been impacted by the closure of restaurants and other retailers.
✈️ Delta (Wednesday) and South West (Thursday) will be quizzed on when they plan to get most of their planes back in the air, and details of the government bailout that will keep them solvent until then (or not).
On the economic front, the United States of Thursday unemployment benefit claims should come in at around four million for the week, adding to the 22 million people who lost their jobs in the previous month.
• Citigroup’s private bank is said to have severed its ties with SkyBridge, Anthony Scaramucci’s fund of hedge funds company, following a bad bet on the credit market. (WSJ)
Politics and Politics
• Paul O’Neill, Treasury Secretary under President George W. Bush, died on Saturday. He was 84 years old. (NYT)
• The Trump administration will delay some tariffs, but to a lesser extent than business leaders had hoped. (WSJ)
• Bond Capital, the venture capital firm co-founded by Mary Meeker, examined how the pandemic has changed business and technology. (Axios)
• The coronavirus is forcing tech start-up founders to grow rapidly. (WSJ)
The best of the rest
• The coronavirus outbreak threatens the global coffee supply. (Bloomberg)
• Bob Dylan’s handwritten lyrics for “The Times They Are A-Changin'” are on sale for $2.2 million. (Reuters)
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