Watch: Why Are Tech Markets Booming While the Economy Reels?
Why is the stock market up if the economy is getting crushed? With so many people out of work, how is it that the market is soaring, by some estimates, to its highest point ever?
Spencer Rascoff, executive chairman at dot.LA, spoke with senior tech-focused executives at investment firm Evercore to discuss what's behind the trends. John Scuorzo, Evercore's senior managing director joined Zaheed Kajani, senior managing director at Evercore to break down Wall Street's perspective on what's happening in the current tech capital markets.
The two say there are several factors contributing to Wall Street's optimism. First, the enormous stimulus coming from governments.
"I think that the biggest and probably the most important driver of this is just the massive stimulus that all the central banks globally have put into the economy," Kajani said. "There is somewhere where this money has to go. If you've got more money chasing fewer assets, that drives price up."
Copy of dot.LA Strategy Session: Wall Street's Perspective
Also contributing, the two said, are several other factors, including low interest rates, international investment, and optimism for what cutbacks and introduction of new technology will mean for many companies' future profits.
"People generally have an allocation towards equities and bonds," said Kajani. "And because the rates are so low, your bonds just don't give you the same return. And that's driven even more capital into the equity markets."
That's been true overseas as well, where investors are looking for safe places to put their money, and the U.S. market appears like a good bet.
"If you have capital in Europe, or in Asia, which other market do you feel is the most stable in the safest market?" Kajani said, "And so, many people who follow the market closely often see the futures up every morning when you wake up. A lot of that money is coming from overseas capital that's entering the U.S. market."
Companies who have made cuts and had to incorporate new technology into their workflow as part after the lockdowns, may also be finding themselves becoming more productive as a result, even with a (temporary or permanent) reduction in staff.
"I think a lot of companies have realized they're being as productive with fewer people and using technology," Kajani said. "I think that actually may increase profits."
All that together, along with optimism that a vaccine will eventually solve many of the problems the world is currently facing, is helping to create the frenzy that the world is seeing on Wall Street, the two said.
Scourzo said that Evercore's projections point in that direction as well.
"Our data suggests that we exited the recession in May, and we're back to an expansionary period, though the cut was deep," he said. "We think we think we're moving in the right direction with the economy only, we estimate, 35% reopened,"
About the Speakers
John Scuorzo , Senior Managing Director of Evercore
John Scuorzo is a senior managing director and the Head of Technology Equity Capital Markets at Evercore, with responsibility for the origination and execution of equity and equity-linked transactions for the firm's global technology clients.
Mr. Scuorzo has been a trusted advisor to technology companies for nearly 20 years, most recently as managing director with Citigroup, where he ran its technology equity capital markets business.
Mr. Scuorzo has been at the forefront of the evolution of capital formation for most of his career and is recognized as one of the most experienced and innovative capital markets professionals in the Technology sector. Mr. Scuorzo has advised hundreds of leading companies across the globe, including Alibaba, Broadcom, CoStar, Despegar, Dynatrace, Facebook, Fastly, Globant, GoDaddy, GoPro, Grubhub, Guidewire, Microsoft, Ping Identity, Paypal, Palo Alto Networks, Pinterest, Presidio, Sailpoint, Slack, The Trade Desk, Uber, Upwork, Roku, Vmware, Wayfair and Zillow.
Mr. Scuorzo graduated from Georgetown University with a B.S. in business administration with a major in finance.
Zaheed Kajani, Senior Managing Director of Evercore
Zaheed Kajani is a senior managing director in the firm's technology corporate advisory business and leads the global internet and digital media practice. Zaheed was most recently a managing director and global head of internet and digital media at Citi. With almost two decades of experience, Zaheed has advised on over a 100 transactions in the sector. He has worked with companies raising private capital, public capital through IPOs, follow-ons and converts, as well as M&A.
Zaheed has an M.B.A. from UCLA's Anderson School of Management, a J.D. from UC Berkeley's School of Law and a B.A. in political science from U.C. Berkeley.
Spencer Rascoff, Executive Chairman of dot.LA
Spencer Rascoff, Executive Chairman of dot.LA
Spencer Rascoff is an entrepreneur and company leader who co-founded Zillow, Hotwire and dot.LA, and who served as Zillow's CEO for a decade. He is currently executive chairman of dot.LA and a board member at TripAdvisor. In the fall of 2019 Spencer was a visiting executive professor at Harvard Business School where he co-taught the "Managing Tech Ventures" course. In 2015, Spencer co-wrote and published his first book, the New York Times' best seller "Zillow Talk: Rewriting the Rules of Real Estate." Spencer is the host of "Office Hours," a monthly podcast on dot.LA featuring candid conversations between prominent executives on leadership, diversity and inclusion, and startups.
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On Thursday, July 9th, dot.LA entertainment reporter Sam Blake hosted a one-on-one video interview with Steven Galanis, founder and CEO of Cameo, the thriving video platform featuring celebrities and influencers.
"From our estimation we believe that there are two million people in the world that are qualified influencers," said Cameo Founder and CEO Steven Galanis in a conversation with dot.LA's Sam Blake. "And probably more than in any other city on Earth, those people are in Los Angeles."
Cameo CEO Steven Galanis
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Tinder Tests Video Feature for Pandemic Dating<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjY1Njc5NC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYxNTgwMjc4M30.77K73_L-avsg-F23cDrsbpaatY6opyXUnhd7KLz-3QE/img.jpg?width=980" id="15305" class="rm-shortcode" data-rm-shortcode-id="500459f03dada1f31bdae9f4fe09131d" data-rm-shortcode-name="rebelmouse-image" /><p><span style="background-color: initial;">As COVID puts a pause on dating for many singles, Tinder has rolled out a new video chat feature. The dating app </span><a href="https://www.tinderpressroom.com/Tinder-Begins-Testing-Face-to-Face-Video" target="_blank">announced</a> Wednesday that users in 13 countries, including four U.S. states, can now try out "Face to Face."<br></p><p>This is part of Tinder's big sell on a feature Bumble launched last year that has become popular. The video calls "prioritize control and comfort" by prompting users to agree to a set of<a href="https://www.gotinder.com/community-guidelines" target="_blank"> ground rules</a> (keeping the interaction PG) and letting them disable the video feature at any point. You're also able to leave a report once the video ends.</p><p>"We're looking to better understand how video chat fits in with the overall journey of getting to know someone new," Tinder spokesperson Evan Bonnstetter explained in an email.</p><p>Users in Virginia, Illinois, Georgia and Colorado can meet their matches face-to-face. But the feeling has to be mutual — both parties need to opt-in before the chat switches to a split-screen video call.</p><p>Like Snapchat, the appeal of talking on dating apps lies in anonymity, for some. Plus, chatting on an app relieves the stress of giving out personal information.</p><p>As stay-at-home orders remain in place, virtual dates have become default. Will this last? A Tinder survey of users found that over half of its U.S. users have used the video date function with a match in the past month. Plus, 40% of Gen Z members surveyed who tried video dating said they'd continue using the feature "as a way to decide whether to meet IRL (in real life) in the future — even once their favorite date spot is open again."</p><p>Launched in 2012, Tinder, now boasting over 60 million subscribers, is available in 190 countries and over 40 languages.</p>
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Kernel, a bioscience company aiming to make the inner workings of the human brain easy to read, announced Thursday it's raised $53 million in a Series C round led by General Catalyst.
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Kernel founder and CEO Bryan Johnson has invested $54 million in the company.