In the News
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Markets
What are Treasury yields? Treasury securities are loans to the federal government over set periods of time (ranging from 1-month to 30-years). The securities are backed by the government, which is why they are considered to be the most risk-free investments. Falling demand for treasury securities boosts yield rates, highlighting investor confidence in riskier investments in other types of securities.
Details: On Tuesday, U.S. Treasury Yields on 10-year yields rose by 9 basis points (0.09%) to 0.938%, one of the highest levels seen since March 2020, when the pandemic settled in the U.S. The implications of rising Treasury yields extend from rising equity expectations and a faster recovery period for the U.S. economy, after a failing response from the U.S. government to the pandemic relief stimulus.
What this means: 10-year treasury yields are used as an indicator of growth expectations and inflation. Their significance also extends to market expectations, especially in equity. Higher treasury yields indicates a bullish market outlook by investors, especially as COVID-19 vaccines by pharmaceutical companies seek approval by regulatory committees and the end of the pandemic seems nearer. If the yield stay at higher levels, it could spell some decline in safe-haven commodities such as gold as investors become more receptive to riskier investments.
Learn more about Treasury Yields here.
Commodities
Details: Copper is at a seven-year high of $7,520 a ton on the London Metal Exchange. The last time copper saw record high levels was in 2011 at $10,000 a ton. This comes amidst rising inflation expectations as countries around the world aggressively pursue monetary or fiscal policy to remedy the pandemic-induced recessions and boost recovery periods. Copper is seen as a “green” metal/commodity that can not only afford short-term demand, especially in infrastructure but long-term outlooks as well, as companies transition from hazardous materials such as oil to more assured commodities such as copper. Copper has a major part to play in semiconductor and the electronic wiring manufacturing, which paints a favorable outlook for future demand.
The Copper Market: Positive future expectations for copper are accompanied by a burgeoning trade in the metal. Chinese refined copper imports increased nearly 41% this year alone, to 1.6 million tons.
IPO
Background: On Monday, December 1st, DoorDash Inc. announced it plans to sell 33 million shares in an initial public offering, which could give it a valuation of as much $32 billion. The company has applied to list its shares on the New York Stock Exchange under the symbol DASH.
Details: The San Francisco food-delivery company expects an offering price between $75 to $85, and it says that a price at the $80 midpoint of that range would yield net proceeds of around $2.54 billion. DoorDash also said in a filing with the U.S. Securities and Exchange Commission that its co-founders Tony Xu, Andy Fang and Stanley Tang will still hold 69% of the company’s voting power after the IPO. The proceeds from the offering will be used by DoorDash towards general purposes, including working capital, capital spending and operating expenses.
M&A
Background: Salesforce.com Inc. agreed to buy messaging company Slack Technologies Inc. in a $27.7 billion cash-and-stock deal, which shows how the biggest players in cloud computing are racing to size up amid the pandemic induced remote work boom. The deal, announced on Tuesday, December 1st, is Salesforce's largest acquisition to date, and would turn the combined company into a more formidable competitor to Microsoft Corp. and Google parent Alphabet Inc.
Deal Rationale: Slack serves as a system of communication for employees within a company, but it also facilitates external communication with customers and partners. Salesforce’s acquisition of Slack will move it beyond its core product of helping companies manage their customer relationships, to providing software tools that businesses need for their day-to-day operations. Salesforce has been trying for years to expand into providing workplace collaboration tools which Slack offers; in 2010, it launched Chatter, a private social network to help companies collaborate. In 2016, it bought Quip Inc., a cloud-document collaboration
Venture Capital
Wait, are esports a sport?? If you’ve been following this section for the past couple months, you know I tend to cover venture capital trends at the intersection of fitness and technology. But, at least this week, we’re calling esports a sport. It fits under the umbrella...just go with it.
What’s Esports One? It’s a startup bringing the fantasy approach to esports. The company’s COO calls it an “all-in-one fantasy platform” that allows you to research players, create fantasy teams and watch games. At first they’re going to focus on North American and European divisions of League of Legends. They created this platform by building out a set of data and analytics products, as well as using computer vision technology that can track game activity (and update player stats) without relying on a publisher’s API.
What happened? This week the company announced that it has raised an additional $4 million in funding. Its user base has been growing rapidly by more than 25% month-over-month. The company has probably benefited from the pause in professional sports earlier this year. The company’s CEO sees fantasy as a way to make video games accessible to a broader audience.
What do they plan to do with the new funding? This funding round was led by XSeed Capital, Eniac Ventures, and Chestnut Street Ventures, bringing its total raised to $7.3 million. The money will allow the company to grow its Bytes virtual currency, which players use to enter contests and buy customizations and it’s working on native iOS and Android apps (Esports One is currently accessible via desktop and mobile web). They also plan to develop fantasy competitions for Rainbow Six: Siege, Rocket League, Valorant and Fortnite.
