Trump Trade

December 7, 2024 by Marine SELLI

Trump Trade

In this article, Marine SELLI (ESSEC Business School, Global Bachelor in Business Administration (GBBA), 2020-2024) examines the phenomenon of “Trump Trades” and their enduring impact on financial markets.

What Is the Trump Trade?

Have you ever wondered how politics shapes financial markets?

The “Trump Trade” highlights this intersection as it captures how market movements are influenced by the policies of Donald Trump. This phenomenon was first observed after his surprise 2016 election victory, and then resurfaced in 2024 with Trump’s re-election.

The Trump Trade is the financial strategies and market movements based on expectations of Trump’s economic policies enactments. It is about how markets understand and view them. Investors react to these policies such as anticipated tax cuts, deregulation, trade measures, and infrastructure projects which leads to significant market shifts.

In 2016 when Trump’s election came out of the blue and the market rallied, all major U.S. indices, including the S&P 500, Dow Jones Industrial Average and Russell 2000, hit record highs. Then, fast forward to 2024 and the story repeated itself. In the month of the election, November 2024, the Dow Jones shot to an all-time high of 44,910.65 and the S&P 500 broke 6,000 points for the first time.

In this phenomenon, it is observed how investor behavior follows the perception of Trump’s policy as pro-business.

What is it about Trump’s presidency that drives these significant market reactions?

Trump has a real estate magnate background therefore he positions himself as a supporter of loose monetary policy: as a developer, he used to rely mainly on cheap credit to finance his projects, benefit from asset appreciation and leverage investments.

His economic philosophy was shaped by his background and that is still reflected in his policies and statements. If implemented, Trump’s policies would prioritize growth, borrowing, and investment, the core of the Trump Trade phenomenon. In fact, Trump’s policies are largely articulated in terms of tax cuts, deregulation, tariffs and infrastructure spending, which are for investors, opportunities of growth.

Two Elections: 2016 vs. 2024

When comparing the Trump Trade in 2016 and 2024. What remained the same and what changed? Trump’s surprise win in 2016 sent shockwaves through the financial world. He was able to get investors to change their portfolios based on his policies. Small cap stocks led the way, outperforming large caps by nearly 8 percent, as they are more reliant on domestic growth, and equity markets surged. The yield on the 10-year Treasury also shot up by almost 100 basis points. It was a steepening yield curve, reflecting optimism over growth but concern about higher borrowing costs and inflation.

Trump’s reelection by 2024 was less surprising, but markets still reacted heavily. Shortly after his victory, the Dow Jones climbed 200 points and small cap stocks again outperformed as investors favored companies less exposed to global trade risks. Additionally, the bond market behaved in line with 2016 trends by long term yields rising faster than short term yields, a sign of inflation expectations.

Financial Market Movements during Trump Re-election

Source: Bloomberg, Les Echos

Trump viewed as an inflationist?

Why do markets think Trump equals inflation? The answer to his policies and economic philosophy. Of course, Trump’s way of doing fiscal expansion through unfunded tax cuts and big spending naturally triggers inflation expectations. Higher disposable income from lower taxes creates demand and raises prices. At the same time, businesses that import goods are burdened by higher costs, which are often passed on to consumers due to protectionist measures that Trump wants to accentuate.

These dynamics are reflected in bond markets. Inflation eats away at the purchasing power of fixed payments, so investors require higher yields on long term bonds. The dynamic steepens the yield curve, whereby long-term rates rise faster than short term rates. In 2016 and then again in 2024, this pattern characterized the Trump Trade and proved that markets still see Trump as an inflationist.

In addition, as I mentioned earlier, Trump’s economic strategy is influenced by his background in real estate. He has always been someone that has leveraged debt to grow and has always pushed for lower interest rates and expansive fiscal policies.

The Forces Driving the Trump Trade

Trump’s policies and economic agenda have included his tax reforms. The 2017 Tax Cuts and Jobs Act cut the corporate tax rate from 35% down to 21%, which had a massive impact on corporate earnings and stock valuations. The same optimism is building in technology and consumer sectors that would be the biggest beneficiaries of these measures for 2024, when there is a possibility of further tax incentives.

Another key driver is deregulation, as during Trump’s first term rollbacks on things like environmental protections, financial regulations and healthcare compliance lowered costs for businesses and raised profitability in sectors like energy and banking. While these expectations have reappeared yet again in 2024, the increased focus on ESG investing has made things more difficult, with some investors eschewing industries deemed environmentally unfriendly.

Furthermore, a boost to infrastructure spending also fuels optimism, as Trump’s pledge of massive energy infrastructure investments such as in energy pipelines for example, has raised market hopes for the industrial sectors. In the weeks following Trump’s 2016 victory, the energy sector outperformed the broader market by over 10%, and similar gains were seen in 2024 as infrastructure-related stocks went up on hopes of renewed public investment.

In conclusion, the Trump Trade exemplifies how market perceptions, often driven by political rhetoric rather than enacted policies, can shape financial dynamics. While Trump’s agenda captures market optimism, much of it may rest on speculative assumptions and short-term gains, masking the underlying risks and long-term challenges. The sustainability of this optimism is contingent on consistent execution, realistic fiscal discipline, and the ability to address structural issues beyond mere rhetoric. Without these, the Trump Trade could unravel as a fleeting market illusion.

Why should I be interested in this post?

Understanding the Trump Trade demonstrates how political decisions, and macroeconomic policies can move financial markets. The analysis links the theoretical principles you study such as market behavior, and corporate strategy to their real-world application. The Trump Trade is a practical example of how politics, economics, and finance play off each other, no matter whether your aspiration is to work in investment banking, asset management, or corporate strategy. It goes beyond academic learning as a basis to think critically about future political and economic shifts that might influence global markets.

Useful resources

JPMorgan Private Bank Is the Trump Trade a Good Deal?

Goldman Sachs on Trump’s Economic Policies

LSE Economic Impacts of the Trump Tariff Proposals on Europe

Financial Times Trump’s Tariff Policies Analysis

Financial Times Market Reactions to Trump’s Economic Decisions

Financial Times Global Trade in the Trump Era

Deutsche Bank Flow: Trump Trade – Back to the Future

Synapses (YouTube channel) Business Insights

About the author

The article was written in December 2024 by Marine SELLI (ESSEC Business School, Global Bachelor in Business Administration (GBBA), 2020-2024).

Political Risk: An Example in France in 2024

December 24, 2024December 7, 2024 by Marine SELLI

Political Risk: An Example in France in 2024

In this article, Marine SELLI (ESSEC Business School, Global Bachelor in Business Administration (GBBA), 2020-2024) explores the intricate relationship between political risk and financial markets, focusing on France’s landscape in 2024.

The context

Financial market stability is critically dependent on political risk, which determines how investors behave, borrowing costs and how strong a nation’s currency is. Consequently, market fears of political instability under Michel Barnier’s government have been heightened in France. Indeed, the instability has manifested itself in rising bond spreads, pressure on the euro and rising costs of debt issuance. Therefore, France’s financial landscape is being impacted by political uncertainty.

Spread Since the Dissolution of the National Assembly.
Spread Between French and German Bonds Political risk in France
Source: Bloomberg, Les Echos

The Cost of French Debt Rises

One of the most widely followed indicators of France’s economic health is its government bonds (obligations assimilables du Trésor or OATs): the yield reflects market confidence in France’s creditworthiness and economic conditions, with rising yields often signaling increased risk perceived by investors. Additionally, the spread between OAT yields and German Bunds serves as a benchmark for comparing investor sentiment toward France versus Europe’s strongest economy. In the past few months, the French bond market has spiked to political uncertainty. As a result, the spread between French and German 10-year bond (which represents a key risk gauge) spiked to 89 basis points in late November 2024. It is the highest since eurozone crisis days in 2012, and up from the 55 basis points in May 2024 before parliamentary dissolution.

Spread Between French and Greek Bonds.

Source: Bloomberg, Les Echos.

The spread reflects the additional yield investors demand to hold French debt over German bonds, which are the eurozone’s safest. Therefore, it represents a quantifiable expression of the risk that markets see associated with France’s political and fiscal situation. This comes as France’s 10-year bond yield has risen sharply from 2.9% at the start of 2024 to 3.2% in November 2024. However, German yields have remained steady at 2.1%, reflecting a difference in confidence among investors in the two economies.

Therefore, the implications for France’s borrowing costs are profound. In 2025, the government will issue €300 billion in bonds, a record amount, as debt refinancing needs and budgetary deficits are pushing up borrowing. A 30 basis point rise in yields could add £900m a year to the interest bill, further stretching a budget that is already under severe strain. Hence, the urgent need to restore market confidence is underlined by the cumulative cost of higher borrowing rates.

The Cost of French Debt Rises

France’s political challenges have also put pressure on the euro, often considered a barometer of European unity. The euro is currently trading at $1.05 and risks further depreciation to parity with the US dollar if the Barnier government collapses. Historically, currency markets have been sensitive to French political developments, and we can point to recent examples.

For instance, speculation of a severe euro devaluation swirled around a ‘Frexit’ in 2017 after fears of such an outcome during the presidential campaign of Marine Le Pen. Analysts had forecast up to 5% fall in the euro, but Emmanuel Macron’s eventual victory eased those fears, pushing the euro 10% higher in four months. However, in 2024, the situation is less clear. The euro’s path remains fragile as investor sentiment is weighed down by political uncertainty and fiscal deficits near 6% of GDP. Further decline would aggravate inflationary pressures by increasing the cost of imports, especially energy, and would provide only modest export benefits in a weak global economy.

Meanwhile, the widening of the French-German spread in recent weeks has been a clear signal that skepticism about France’s political and fiscal outlook has been growing.

France, a semi core of the eurozone, now has borrowing costs approaching those of southern European countries such as Spain and Portugal, which have been viewed as riskier. For example, Spanish 10-year bond yields have fallen below those of France due to the improved fiscal discipline in and economic performance by Spain. In the meantime, France’s credit default swaps are trading at 0.4%, implying a default probability of 2.6%. This is still below Greece’s 5%, but it reflects a loss of confidence in French fiscal management.

Additionally, liquidity concerns are also at play. France’s ability to get enough private investors to put money into its debt is becoming more reliant on these private investors as the European Central Bank reduces its purchases of bonds. The shift in market dynamics only underscores the need for political stability.

France Fiscal Outlook

France’s fiscal outlook is a daunting challenge for financial markets. This comes as the government embarks on its record €300 billion debt issuance program for 2025, at a time when interest costs are rising and the budget remains in deficit. As a result, the sheer volume of outstanding debt, coupled with higher yields, will push debt servicing expenses to €55 billion in 2025, from €50 billion in 2024.

Moreover, France’s debt-to-GDP ratio is already 111% in 2024, one of the highest in the eurozone. That ratio has been a source of concern about the sustainability of France’s fiscal policies, given that it comes amid a slow economic growth. That’s why analysts warn that without meaningful reforms to deal with structural deficits, the debt trajectory could become unsustainable, which will then trigger further downgrades from credit rating agencies and higher borrowing costs.

Outstanding French Debt Overview.

Source: Agence du Trésor.

In conclusion, France is at a crossroads, and its financial markets are reflecting deep seated worries about political instability and fiscal sustainability. Widening bond spreads, growing debt servicing costs and pressure on the euro underscore the need for action. Furthermore, this case serves as a textbook example of how political risk can deeply impact financial markets. The interplay between France’s domestic political turmoil, bond spreads, currency volatility, and investor sentiment demonstrates how closely markets monitor political developments.

Why should I be interested in this post?

This post provides an analysis of how political risk impacts financial markets, focusing on the French bond market, currency fluctuations, and fiscal sustainability. It gives you an outlook on the real-world consequences of political instability, offering a detailed understanding of how investor sentiment shifts in response to political uncertainties.

Useful resources

European Central Bank (ECB)

Agence France Trésor (AFT)

Bloomberg

Les Echos (Financial Market Section)

Standard & Poor’s (S&P) Global Ratings

About the author

The article was written in December 2024 by Marine SELLI (ESSEC Business School, Global Bachelor in Business Administration (GBBA), 2020-2024).

My Internship Experience at Safety Carb

December 24, 2024December 7, 2024 by Marine SELLI

My Internship Experience at Safety Carb

In this article, Marine SELLI (ESSEC Business School, Global Bachelor in Business Administration (GBBA), 2020-2024) shares her professional experience as a Strategic Financial Planner at Safety Carb Additifs.

About Safety Carb

My father founded Safety Carb Additifs as an entrepreneurial venture in 2015 to produce French industrial additives. It is a company focused on environmentally friendly additives while reducing their negative ecological impact. Over the years, Safety Carb has developed itself and reaffirmed its positioning earning eco-certifications that also allow its customers to benefit from eco-primes.

Logo of the company.
Logo of Safety Carb
Source: Safety Carb.

My internship at Safety Carb

Joining Safety Carb Additifs as a Strategic Financial Planner gave me the opportunity to contribute to an entrepreneurial venture which is a stimulating and ever evolving environment. My role encompassed many day-to-day recurring tasks such as inventory management, issuing invoices, it was mainly centered around developing a comprehensive business plan, which served as a foundation for the company’s strategic initiatives and future growth. Yet being in a small corporate setting, in rare moments I also had to bring support in other areas such as operational tasks.

In the end, this internship allowed me to delve into the company’s financial operations and understand the unique challenges faced by entrepreneurial ventures.

My missions

One of the main parts of my internship was the creation of a detailed business plan with the CFO ( Chief Financial Officer ). I had to do in-depth market research of this process in which I had to assess growth opportunities and identify the company’s competitive advantage. We looked to determine the possible market expansions and the need to incorporate the sustainability metrics into the plan. Safety Carb emphasized the use of its eco-friendly products to break new market segments in this business plan.

It also featured financial projections of the company’s growth potential and indicated the company’s ability to achieve profitability while conforming to his sustainability objectives, and used scenarios useful for external financing like investors.

I was also responsible for helping to synthesize accounting data and to create tools to monitor inventory so that the company’s operations could be kept efficiently and on track with its financial achievement.

Required skills and knowledge

Reflecting on it, my internship at Safety Carb Additifs required a combination of technical and analytical skills. Developing the business plan required me to acquire a comprehensive understanding of financial modeling and market analysis. Moreover, I needed a strategic mindset to balance the company’s entrepreneurial objectives with its operational constraints. For instance, while drafting the Business Plan, I had to consider the company’s limited financial and human resources, ensuring that proposed initiatives were feasible within budget and staffing constraints. Additionally, the production capacity of the company’s facilities imposed limits on how quickly new projects or expansions could be implemented.

What I learned during my internship at Safety Carb

This experience enhanced my understanding of how financing can support entrepreneurial ventures and fast-track its success. I also learned to develop business plan creation skills, from market analysis to financial projections, and gained an overview into how sustainability can drive growth in competitive industries in today’s environment. On a more personal note, working closely within an entrepreneurial team also gave me a deeper appreciation for the challenges and opportunities that come with running a family business.

Financial concepts related my internship

Business Plan Development

One of the key financial concepts I applied during my internship was business plan creation. This involved integrating various components into a cohesive Excel that reflected the company’s strategic direction.

Cost-Benefit Analysis

I also relied on cost-benefit analysis to evaluate the potential return on investment for market expansion initiatives and the need for a validation of other eco-certifications. By assessing the trade-offs between costs and expected benefits, I was able to provide actionable recommendations backed-up by several hypotheses.

Cash Flow Management

Cash flow management was another important concept. For any entrepreneurial venture, it’s necessary to understand how to project and monitor cash flows and ensure that the company’s operations were financially sustainable.

Why should I be interested in this post?

If you’re interested in an entrepreneurial venture, finance and sustainability, I think this post provides a great ground to demonstrate how finance can serve as a catalyst for both business growth and positive environmental impact.

Useful resources

Safety Carb

About the author

The article was written in December 2024 by Marine SELLI (ESSEC Business School, Global Bachelor in Business Administration (GBBA), 2020-2024).

My Internship Experience as a Brand Strategy Assistant at Accor

December 24, 2024December 7, 2024 by Marine SELLI

My Internship Experience as a Brand Strategy Assistant at Accor

In this article, Marine SELLI (ESSEC Business School, Global Bachelor in Business Administration (GBBA), 2020-2024) shares her professional experience as a Brand Strategy Assistant at Accor, focusing on brand strategic analysis for a global portfolio of midscale brands.

About Accor

As a global hospitality industry leader, Accor has over 5,300 hotels throughout 110 countries. Accor has a wide variety of brands from luxury to economy, catering to different segments of customers – leisure travelers to business professionals. The company is known for its focus on innovation and sustainability and is always looking for ways to maintain a competitive advantage in a changing market. Today, the focus is on “augmented hospitality”. The brand strategy team in Accor’s global operations is responsible for creating and executing actions to promote value, brand equity, market presence and operational efficiency. In close partnership with regional relays and individual hotels, the team is able to adapt strategies in order to work with the specific dynamics of each market. Accor recently has been in the process of a strategic transformation, moving away from being a hotel owner and towards franchising and contracted management. Accor increases operational flexibility and minimizes financial risk by selling its brand name rather than owning the hotels directly and brand strategy is a key element of its global success. This strategy allows the company to concentrate on specific and focused competencies such as brand management, customer experience, but also innovation while transferring the financial and operational responsibilities of property ownership to third parties. By adopting a franchising and contracted management model, Accor also mitigates the risks associated with real estate ownership such as market fluctuations, high CAPEX ( capital expenditures ), and asset depreciation. This asset-light approach also provides greater agility, as it enables Accor to expand more rapidly and adapt to changing market conditions.

Logo of Accor.

Source: Accor.

As of December 5, 2024, Accor’s stock price has reached €46.08, reflecting a 45% year-to-date growth from its 52-week low of €32.47 on August 5th. This significant recovery underlines the investor’s confidence in the company’s strategic shift towards this asset-light model and its operational resilience. Moreover, Accor’s reentry into the CAC40 in March 2024 highlighted its resurgence as a key player in the French economy. The stock is now showing strong momentum, peaking at a 52-week high of €46.12, with daily trading volumes of 492,713 and a market capitalization of €11.23 billion.

Accor’s Historical Stock Data.

Source: Euronext.

My internship

During six months, I worked as a Brand Strategy Assistant for Accor, supporting global initiatives for three brands: Belonging to Mercure, Grand Mercure and Handwritten Collection. In my role, I had to simultaneously apply analytical know-how and communication skills to ensure strategic priorities were consistent across regions and individual properties. Because of my position, I was able to interact with a diverse range of stakeholders, including hotel managers responsible for implementing strategies on-site, regional leaders overseeing multiple properties, and corporate executives shaping the brand’s strategic vision. My role was to identify and help to develop the most impacting actions to drive results at the hotel level, and communicate these to the regional teams and the hotel managers.

My missions

When I was interning, a large part of what I did was take I did was take comprehensive data sets detailing every hotel Accor owns, including each property’s specific features and performance metrics such as occupancy rates, average daily rates (ADR), revenue per available room (RevPAR), and marketing campaign performance. Then I would synthesize it into a clear, actionable report. To accomplish that, I had to create Powerpoints that would portray brand strategies and performance insights to the regional teams and hotels all around the world as well as to the stakeholders at all levels with key performance metrics being highlighted. A second important part of my work was determining the ROI of different actions.This was computed by analyzing the incremental revenue generated from specific initiatives relative to their associated costs, such as marketing spend, operational investments, or promotional discounts. Through an analysis of global hotel-level data, I was able to identify which initiatives were having the greatest impact and provide recommendations on how to best utilize resources for maximum impact.

Required skills and knowledge

In this role I needed high-level synthesis skills to make sense of large amounts of data and report into documents. There was a need for proficiency in Excel to curate the data, and PowerPoint to convey effectively the information. I also needed analytical skills as I worked with financial metrics such as ROI and KPIs to analyze the success of initiatives. In addition, the role required deep collaboration and strong communication skills. I regularly engaged with a wide range of stakeholders, including regional teams, hotels, and agencies. I also developed expertise in working across different markets, understanding their unique characteristics, and aligning recommendations with each region’s specific goals and challenges.

What I learned

I learned a lot through my internship about how global strategies are applied to the local market in a fast developing and competitive industry. I acquired advanced skills in data analysis and synthesis and learned how to communicate complex information clearly to diverse audiences. In addition, I learned about the process of using financial metrics like ROI and KPIs to evaluate and prioritize strategic actions. On top of that, I believe this experience helped me develop my ability to think critically about how brand strategies can drive tangible results across different markets.

Finally, managing a hotel portfolio of this size (+1000 hotels) and complexity highlighted the difficulty of ensuring that every hotel aligns with Accor’s vision and delivers on its brand promises even though it is now its main business model. I had gained firsthand experience in learning how to navigate this challenge, contributing to initiatives designed to reinforce operational implementation and efficiency which is a key driver in hospitality business.

Financial concepts related my internship

I explain below three financial concepts related to your internship: Return on Investment (ROI), Key Performance Indicators ( KPIs) and Budget Management

Return on Investment (ROI)

ROI was one of the key financial concepts I applied. I analyzed the ROI of many different initiatives to identify which action led to the highest ROI and so resources were directed towards actions which led to the best results for driving hotel performance.

Key Performance Indicators (KPIs)

Another concept was KPIs. The hotel industry has its own specific metrics such as occupancy rates, average daily rate, and revenue per available room. These are essential for evaluating the success of each project and determining where improvements could be made.

Budget Management

Finally, my manager and I worked extensively on both budget management and budget allocation, which were critical aspects of my role. For budget allocation, we collaborated to distribute a strict and defined budget across different brands and within various global initiatives, such as brand campaigns, regional activations, and strategic projects aimed at strengthening Accor’s global market presence. I contributed by carefully evaluating the expected ROI of each initiative, analyzing key performance metrics like brand visibility, customer engagement, and revenue contributions. Together, we ensured that resources were allocated strategically to maximize the impact on a global scale. In terms of budget management, we worked closely to monitor spending across these global initiatives, ensuring compliance with the allocated budget. I actively tracked expenditures, flagged any deviations, and supported the development of adjustments to keep financial goals on track.

Why should I be interested in this post?

If you’re interested in exploring a mix of finance, strategy and marketing within a global organization, my experience at Accor demonstrates how financial metrics are used to drive impactful decisions in several business’ segments. It also highlights the importance of ensuring that global strategies translate into local success, offering valuable insights for those aspiring to work in corporate strategy, hospitality, or brand management.

Useful resources

Accor

About the author

The article was written in December 2024 by Marine SELLI (ESSEC Business School, (ESSEC Business School, Global Bachelor in Business Administration (GBBA), 2020-2024).

Factiva

December 30, 2024December 6, 2024 by Nithisha CHALLA

Factiva

In this article, Nithisha CHALLA (ESSEC Business School, Grande Ecole Program – Master in Management (MiM), 2021-2024) delves into the essentials of Factiva, its features, and its applications, showcasing why it remains indispensable for professionals and academics alike working in business and finance.

Introduction

In the fast-paced world of business and finance, access to accurate, reliable, and up-to-date information is paramount. Factiva, a subscription-based database owned by Dow Jones & Company, is a cornerstone for researchers, financial analysts, and business professionals seeking high-quality data for decision-making.

The History of Factiva

Factiva was launched in 1999 as a joint venture between Dow Jones & Company and Reuters, two industry titans in financial news and information services. The aim was to create a unified platform catering to the growing need for consolidated global news and business data access. By integrating Dow Jones’s deep archives and Reuters’ real-time data capabilities, Factiva emerged as a pioneering solution for professionals in any sector, especially finance.

Logo of Factiva.

Source: the company.

Factiva is a premier business intelligence platform offering access to a vast array of global content, including news, company information, market data, and industry insights. It integrates thousands of sources from over 200 countries in more than 30 languages. These sources include major newspapers, trade journals, industry publications, and multimedia content.

In 2006, Dow Jones acquired full ownership of Factiva, streamlining its integration with other Dow Jones products, including The Wall Street Journal. Over the years, Factiva has evolved into a sophisticated tool incorporating artificial intelligence (AI) and machine learning for advanced data analytics, thus staying ahead in a competitive information services market.

Key Features

Certain key features of Factiva make it very useful as a database such as its Extensive Content Coverage, Search and Filter Options, Data Analytics and Visualization, Company Profiles, and Industry Reports.

As an example, the picture below presents the news about Apple in the Factiva Interface.

Factiva Interface

Source: the company.

Extensive Content Coverage

Factiva includes over 33,000 sources, such as The Wall Street Journal, The Financial Times, The New York Times, and Reuters. It features specialized publications in sectors like energy, healthcare, and technology. Archival content dates back decades, enabling trend analysis and historical research.

Search and Filter Options

Advanced search tools allow users to refine searches using keywords, topics, dates, or specific publications. Filters can narrow results by geography, industry, or company size.

Real-Time News

Factiva provides real-time updates on financial markets, economic changes, and global events. Alerts and notifications keep users informed of developments affecting their areas of interest.

Data Analytics and Visualization

Users can extract, analyze, and visualize data to identify patterns and insights. Tools include charts, graphs, and export options for seamless integration with other software.

Company Profiles and Industry Reports

Comprehensive profiles offer financials, competitors, and SWOT (Strengths Weakness Opportunity and Threats) analyses for thousands of companies. Industry reports provide market trends, regulatory updates, and forecasts.

Applications in Finance and Business

There are several applications of Factiva in finance and business such as Investment Research, Risk Management, Academic Research, and Public Relations and Marketing.

Investment Research: Financial analysts rely on Factiva for market trends, earnings reports, and competitor analysis to guide investment decisions.
Risk Management: Businesses use Factiva to monitor geopolitical events, economic risks, and compliance-related developments.
Academic Research: Factiva’s extensive archives are invaluable for finance students and researchers studying historical market behavior or conducting case studies.
Public Relations and Marketing: PR professionals use Factiva to monitor media coverage, track competitors, and evaluate public sentiment.

Advantages and Limitations of Factiva

Though there are multiple advantages of using this database there are also certain limitations which we have to consider.

Advantages of Factiva

Global Reach: Access to international publications ensures a well-rounded perspective.
Customizable Dashboards: Users can tailor the interface to prioritize relevant content.
Reliable Sources: Factiva aggregates data from reputable and verified sources.
Ease of Integration: APIs (Application Programming Interface) allow integration with other platforms for streamlined workflows.

Challenges and Limitations

Cost: Factiva’s subscription model can be expensive for individuals or small businesses. The pricing is on the request basis of the data.
Complexity: The platform’s depth may require training for optimal use.
Access Restrictions: Some content may have geographical or licensing restrictions.

Why Factiva Matters in 2024

With the explosion of information and the increasing risk of misinformation, Factiva’s role as a curated, reliable database is more critical than ever. Its ability to distill vast quantities of data into actionable insights makes it a vital tool for navigating the complexities of modern business and finance. Moreover, the integration of advanced technologies such as AI in Factiva enhances predictive analytics, enabling users to anticipate market movements and mitigate risks proactively.

Conclusion

Factiva exemplifies the power of information in driving informed decision-making. Its rich history, innovative features, and significant economic implications underscore its enduring relevance in a data-driven economy. Whether you’re a student aiming to excel in finance or a professional seeking a competitive edge, Factiva equips you with the tools to succeed in a knowledge-driven world.

Why should I be interested in this post?

By embracing Factiva, users, and students mainly gain not just data but the clarity and confidence to act on it effectively, ensuring better outcomes for businesses, academia, and industries at large.

Useful resources

Dow Jones Factiva – Global News Monitoring, Business Intelligence Platform

Dow Jones What is Factiva?

European University Institute (EUI) Factiva news and company database

Wikipedia Factiva

About the author

The article was written in December 2024 by Nithisha CHALLA (ESSEC Business School, Grande Ecole Program – Master in Management (MiM), 2021-2024).

Treasury Bonds: The Backbone of U.S. Government Financing

December 3, 2024December 3, 2024 by Camille KELLER

Treasury Bonds: The Backbone of U.S. Government Financing

In this article, Camille KELLER (ESSEC Business School, Bachelor in Business Administration (BBA), 2020-2024) explains the purpose, significance, and global role of U.S. Treasury bonds.

Introduction

Treasury bonds (T-bonds) are long-term debt securities issued by the U.S. Department of the Treasury, fundamental to funding government operations and shaping economic policies. Backed by the “full faith and credit” of the U.S. government, they are regarded globally as benchmarks of stability and reliability.

These bonds play a dual role: domestically, they underpin the financial system and provide risk-free investment options, while globally, they influence capital flows and pricing in international markets. With their long maturities and predictable returns (if hold until maturity), Treasury bonds are a secure haven for investors in times of uncertainty.

This article explores the structure of Treasury bonds, their critical role in monetary policy, and their global significance in maintaining financial stability.

What Are Treasury Bonds and How Do They Work?

Treasury bonds are issued by the U.S. government to finance national projects and repay debt. They have maturities of 10 to 30 years and offer fixed semiannual interest payments, returning the principal amount at maturity.

Figure 1 below gives the evolution of the interest rate of Treasury bonds (30 years of maturity) over the period March 1977 – December 2024 (data from Federal Reserve Bank of St. Louis). You can download the Excel file for the historical data used to build the figure.

Figure 1. Evolution of the US Treasury bonds interest rate.

Source: Federal Reserve Bank of St. Louis.

These bonds are sold through public auctions, where competitive bidders specify desired yields, and non-competitive bidders accept the auction’s determined rate. This transparent process ensures fair pricing and liquidity, making T-bonds accessible to a wide range of investors.

Treasury bonds are considered among the safest investments globally, given the U.S. government’s ability to generate revenue through taxation and currency issuance. This security makes them a key component of institutional portfolios, particularly for pension funds and central banks looking for low-risk, reliable returns.

In financial markets, T-bonds serve as a benchmark for long-term interest rates. Their yields influence borrowing costs for mortgages, corporate bonds, and loans, directly affecting economic activity. During financial uncertainty, their reputation as safe-haven assets attracts significant demand, reaffirming their stability and importance in global markets.

The Role of Treasury Bonds in Monetary Policy

Treasury bonds are integral to U.S. monetary policy, serving as tools for the Federal Reserve to manage money supply and interest rates. Through open market operations, the Federal Reserve buys or sells Treasury bonds to inject or withdraw liquidity from the financial system. These actions influence borrowing costs and economic activity.

When the Federal Reserve purchases T-bonds, it lowers interest rates, encouraging borrowing and investment. Conversely, selling bonds tightens liquidity and increases rates, curbing inflation and slowing economic growth.

T-bonds are also key indicators of inflation expectations. Fixed coupon payments lose value in inflationary periods, prompting investors to demand higher yields as compensation. Their role as a measure of market sentiment makes them critical in assessing economic conditions.

The yield curve—a graph of yields on Treasury securities of varying maturities—offers further insight. An inverted yield curve, where short-term yields exceed long-term yields, is often a precursor to economic recessions, signaling investor concerns about future growth.

Through these mechanisms, Treasury bonds enable the Federal Reserve to balance economic growth, inflation, and employment, making them indispensable to monetary policy.

Treasury Bonds as a Global Benchmark

Treasury bonds extend their influence far beyond U.S. borders, forming the bedrock of the global financial system. Their stability, liquidity, and dollar-denominated nature make them indispensable to central banks, institutional investors, and sovereign wealth funds worldwide.

Central banks, particularly those in countries like China and Japan, hold large reserves of T-bonds to stabilize exchange rates, manage currency reserves, and hedge against market volatility. Their status as a low-risk investment ensures enduring demand, reinforcing the U.S. dollar’s dominance in global finance.

T-bonds also serve as a benchmark for pricing other financial instruments. Their yields represent the risk-free rate used in valuation models for equities, corporate bonds, and derivatives, shaping investment decisions across markets.

In times of crisis, Treasury bonds attract capital as investors seek security, lowering yields and providing stability to global markets. However, this reliance also introduces vulnerabilities; events like U.S. debt ceiling debates or credit rating downgrades can disrupt global confidence in Treasury securities.

Despite these challenges, the unwavering demand for Treasury bonds highlights their critical role in ensuring liquidity and stability in the international financial system.

Why Should I Be Interested in This Post?

This post is a valuable resource for students and professionals interested in understanding the mechanics of Treasury bonds and their broader implications. It highlights the intersection of government finance, monetary policy, and global markets, offering insights into how these instruments shape economies worldwide.

Useful Resources

U.S. Department of the Treasury

Federal Reserve Economic Data (FRED)

Federal Reserve

About the Author

The article was written in December 2024 by Camille KELLER (ESSEC Business School, Bachelor in Business Administration (BBA), 2020-2024).

OAT: France’s Answer to Sovereign Bonds

December 3, 2024December 3, 2024 by Camille KELLER

OAT: France’s Answer to Sovereign Bonds

In this article, Camille KELLER (ESSEC Business School, Bachelor in Business Administration (BBA), 2020-2024) explains the role, structure, and significance of French government bonds known as Obligations Assimilables du Trésor (OATs).

Introduction

Obligations Assimilables du Trésor (OATs) are the backbone of France’s government debt strategy, providing a reliable means to finance public expenditures. These long-term debt securities are issued by the French Treasury and are central to the stability of France’s financial system.

OATs not only ensure the funding of state operations but also serve as a benchmark for the European financial markets. Their appeal lies in their fixed and predictable returns (if hold until maturity), making them a popular choice for institutional investors seeking stability in a historically low-risk asset.

This article dives into the structure and purpose of OATs, their relevance in monetary policy, and their role in the broader European and global financial system.

What Are OATs and How Do They Work?

OATs are long-term debt securities issued by the French Treasury to meet the government’s borrowing needs. The maturities of OATs ranges from 2 to 50 years. Investors receive fixed annual interest payments and the principal amount at maturity.

Figure 1 below gives the evolution of the OAT interest rate (10 year of maturity) over the period January 1986 – December 2024 (date from investing / Banque de France). You can download the Excel file for the historical data used to build the figure.

Evolution of the OAT interest rate.

Source: investing / Banque de France.

OATs are issued through public auctions managed by Agence France Trésor (AFT), the French government agency responsible for debt issuance and management. These auctions allow competitive and non-competitive bidding, ensuring a transparent and efficient process.

The reliability of OATs is grounded in the French government’s creditworthiness, supported by a robust and diversified economy. This low-risk profile attracts a wide range of investors, including pension funds, insurance companies, and foreign governments, making OATs a staple of institutional portfolios.

In financial markets, OATs play a vital role as benchmarks for euro-denominated securities. They influence pricing for corporate bonds, mortgages, and other fixed-income instruments within the Eurozone. Their stability and liquidity make them a key asset class in European financial systems.

The Role of OATs in Monetary Policy

OATs are an integral part of monetary policy in the Eurozone, serving as tools for the European Central Bank (ECB) and other institutions to influence financial conditions. As sovereign bonds, they are used in the ECB’s open market operations, including quantitative easing programs aimed at stabilizing the economy.

Through these programs, the ECB purchases OATs and other Eurozone bonds to inject liquidity into the financial system. This lowers interest rates, supports borrowing, and stimulates economic growth during periods of economic stagnation or crisis.

The yield on OATs is also a key indicator of France’s economic health and investor sentiment. Rising yields suggest increased borrowing costs for the government and heightened risk perceptions, while lower yields signal strong investor confidence and stability.

Additionally, OATs contribute to the overall functioning of the Eurozone’s financial architecture by providing a risk-free benchmark for pricing other securities. Their role in monetary policy extends beyond France, influencing financial markets across the European Union.

OATs as a Global Benchmark

OATs hold significance beyond France, serving as a critical component of global financial systems. Their euro-denominated nature positions them as an attractive option for central banks and institutional investors seeking diversification in foreign reserves.

Global investors often compare OATs with other sovereign bonds, such as U.S. Treasury bonds and German Bunds, to evaluate risk and return profiles. This competition reinforces OATs’ status as a key player in international capital markets.

In times of financial uncertainty, OATs provide a safe haven for investors looking to preserve capital. Their high liquidity and the French government’s strong credit ratings ensure consistent demand, particularly during economic turbulence.

However, OATs’ global importance also comes with challenges. Economic or political instability in France can impact investor confidence, affecting the broader European financial system. Despite these risks, their resilience and reliability continue to cement their role in global markets.

Why Should I Be Interested in This Post?

This post is a valuable resource for students and professionals interested in understanding OATs as a key financial instrument. It highlights their significance in government financing, monetary policy, and global markets, making them essential knowledge for those exploring careers in finance or economics.

Useful Resources

Agence France Trésor (AFT)

European Central Bank

Organisation for Economic Co-operation and Development (OECD)

About the Author

The article was written in December 2024 by Camille KELLER (ESSEC Business School, Bachelor in Business Administration (BBA), 2020-2024).

Bridging Technology and Finance: Insights from a Marketing Internship in Public Bidding

December 1, 2024December 1, 2024 by Ziqing QIN

Bridging Technology and Finance: Insights from a Marketing Internship in Public Bidding

In this article, Ziqing QIN (ESSEC Business School, Bachelor of Business Administration (BBA), 2022-2026) shares her professional experience at VideoPower Technology as a Marketing Intern in public bidding.

About the company

VideoPower Technology Co., Ltd., founded in 2012 and headquartered in Beijing, China, is a leading provider of technological solutions for government procurement and public bidding. The company’s innovative tools and platforms enable government agencies to procure goods and services transparently and efficiently while empowering businesses to compete fairly in the marketplace.

VideoPower specializes in advanced analytics, compliance management, and bidding process automation. For example, its flagship platform “BidMaster” has been used in over 300 government projects, helping businesses win contracts totaling more than 50 million RMB. One notable success story involved assisting a logistics company in securing a provincial transportation contract worth 10 million RMB by optimizing their bidding strategy using BidMaster’s analytics.

I worked in the Marketing and Business Development team, which was pivotal in identifying market opportunities and crafting strategies to position the company as an industry leader. During my internship, I contributed to the development of campaigns targeting public procurement opportunities and collaborated with Finance and Operations to prepare competitive bids. A key achievement was securing a regional government IT infrastructure project valued at 3 million RMB, a testament to the team’s strategic alignment and execution capabilities.

Logo of VideoPower Technology.

Source: the company.

My internship

As a marketing intern at VideoPower Technology Co., Ltd., I had the opportunity to work directly on public bidding projects that shaped my understanding of the procurement process. One of the most impactful experiences was contributing to a successful bid for a regional government’s information technology (IT) infrastructure project valued at 3 million RMB. This hands-on involvement taught me how to collaborate with multiple departments, such as finance and operations, to ensure that our proposals were both competitive and aligned with strategic objectives.

My missions

Throughout my internship, I was responsible for a variety of key tasks that directly supported the company’s bidding efforts:

Performed in-depth market research on over 50 government procurement projects, identifying opportunities in sectors such as IT and construction.
Played a pivotal role in crafting proposals, including a winning bid for an 8 million RMB service contract that secured a 5-year partnership with a municipal government.
Evaluated competitors’ pricing and strategies, which led to a reduction in bid preparation time and increased success rates.
Worked closely with cross-functional teams to ensure compliance with government regulations, achieving a 95% approval rate for submitted proposals.

Required skills and knowledge

My role required both technical and interpersonal skills. I leveraged analytical tools such as Excel to create detailed cost models, ensuring proposals were competitive and profitable. Proficiency in project management software, such as Trello and Microsoft Project, allowed me to prioritize tasks and meet tight deadlines. Soft skills, including communication and teamwork, were vital for presenting market insights to senior management and fostering collaboration with other departments. Additionally, my understanding of government procurement regulations enabled me to identify compliance risks and avoid potential setbacks.

What I learned

This internship was a crash course in the complexities of public procurement and how to navigate them effectively. By working on large-scale projects, I gained a solid understanding of cost analysis, competitive pricing, and risk mitigation. For example, I analyzed historical bid data to anticipate competitor pricing, which directly influenced our proposal strategies. I also learned how to balance profitability with client requirements, an essential skill for roles in finance and consulting. Beyond the technical aspects, this experience deepened my appreciation for cross-departmental collaboration and the importance of clear communication in achieving shared goals.

Financial concepts related to my internship

During my internship, I applied several financial concepts that were essential to the bidding process. These included cost estimation and budgeting, pricing strategies, and risk assessment.

Cost Estimation and Budgeting

Cost estimation and budgeting were fundamental aspects of my role. I learned how to break down project costs into direct and indirect categories, ensuring that every expense was accounted for. By accurately estimating costs, the company could prepare bids that were both competitive and realistic. This process involved analyzing historical data, consulting with project teams, and forecasting potential risks that might impact the budget.

Pricing Strategies

Developing effective pricing strategies was crucial to winning bids while maintaining profitability. I analyzed competitors’ pricing models and market trends to determine optimal pricing for our proposals. This involved striking a balance between offering an attractive price to government clients and ensuring that the company’s financial goals were met. By leveraging market intelligence, I contributed to crafting proposals that highlighted the company’s value proposition.

Risk Assessment

Risk assessment played a significant role in preparing bids. I worked on identifying potential risks, such as fluctuating material costs, project delays, and regulatory challenges, and developed strategies to mitigate these risks. By addressing these uncertainties in advance, the company was able to submit bids with confidence, minimizing the likelihood of unforeseen challenges during project execution.

Why should I be interested in this post?

This post highlights how an internship in public bidding applies essential financial concepts like cost estimation, pricing strategies, and risk assessment. These skills are highly relevant for ESSEC students pursuing careers in finance, consulting, or corporate strategy.

It also shows how practical experiences complement academic learning, preparing students for roles in investment banking, business development, and beyond.

Useful resources

Below are some valuable resources related to public procurement, market analysis, and project management that were relevant to my internship experience:

Government Procurement Platforms

PLACE – Plateforme des Achats de l’État: The official French government procurement platform, providing information on public tenders and bidding processes.

Market Analysis Tools

Statista: A leading platform for market statistics and industry insights.

Google Tag Manager: A free tool for managing and analyzing website tags, helpful for digital marketing analysis.

Business and Investment Resources

Business France: A national agency that supports the international development of French businesses and promotes investments in France.

Project Management Tools

Microsoft Project: A comprehensive tool for planning, executing, and tracking projects.

Trello: A flexible project management tool that helps organize tasks using a Kanban board approach.

About the author

The article was written in December 2024 by Ziqing QIN (ESSEC Business School, Bachelor of Business Administration (BBA), 2022-2026).

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My Internship Experience at Safety Carb

About Safety Carb

My internship at Safety Carb

My missions

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Cost-Benefit Analysis

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Applications in Finance and Business

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Why Factiva Matters in 2024

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Treasury Bonds: The Backbone of U.S. Government Financing

Introduction

What Are Treasury Bonds and How Do They Work?

The Role of Treasury Bonds in Monetary Policy

Treasury Bonds as a Global Benchmark

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About the Author

OAT: France’s Answer to Sovereign Bonds

Introduction

What Are OATs and How Do They Work?

The Role of OATs in Monetary Policy

OATs as a Global Benchmark