how do i "know the markets"?
did an interview with piper sandler today. not for a traditional summer analyst internship but for a 6-month off-cycle internship with their public finance team in el segundo CA. they issue municipal bonds n shit. I pretty much bombed the interview. been depressed about it for the past like...10 hours. rly fucking sad. but anyway, one question i got asked was sth along the lines of "where do u think the market is going, what do u think will the Fed do with interest rates, and how will things balance at the end of the year?" or something like that
im a finance student (took econ then switched to finance after transferring schools - unfortunately from one non-target to a way better but still non-target lol). have a 4.0 gpa. idk if my classes just fuckin suck or if im just a dumbass but i dont know how to talk like i know shit about the markets. ive tried reading WSJ before but like, what do i look for? like im gonna be honest it doesnt come natural to me and i dont know how it does for other people.
Super dissapointing honestly… I loved trading in college. My friends all are even still in a group where we send in news and stocks etc… it’s all on podcasts, it’s all on twitter, it’s all on WSJ.
The Fed interest rate hikes are the biggest thing going on across the American economy right now. We are experiencing 8% inflation and this is how you combat inflation. The fact you’re going into an IB interview and you can’t even somewhat hold ground in a conversation of what’s going on is tough dude. I really encourage you to start indulging in the real world of finance and not just academic bs.
In short, I think you had a decent response for a student. Not great… but your response shows you understand the concepts. Regarding how to make it feel genuine.. it’s somewhat difficult unless you make markets your passion and stay up to date on a frequent basis, not just prep the week leading into the interview. For me it’s easy.. I work on a bond desk. When I was in school though… I didn’t fully grasp all the levers at play or have a well thought out thesis for what was going on in the macro. Chin up friend, more opportunities will present themselves and you’ll do better next time.
There's no good answer for "How you know the markets". Personally, I love this question because it's meant to show how well you understand things broadly. The easiest way to prep for this is to read everything you can and try to piece it all together like a big puzzle. In terms of the questions you presented, where do you think the market is headed? It's a high-level question you can direct any way you want providing you can back it up. If you think we're entering into a recession, then you can start by discussing how the market has done, what's driven the performance, and dive into what's happening (ex. inflation, commodities concerns, the war in Ukraine, flight to safety, etc) to explain why these issues are going to drive a recession. In terms of interest rates, it's about laying out a story to explain why you think that the rates are going to go up or down. It's not just what happened in the past, it's drawing on what's happening now. Discussing that the fed is going to raise rates 6 times is a good start, but you have to highlight what that means (ex Rates go up, borrowing goes down, spending declines, etc) and how it will impact the market. As far as the last question - where do you think we end up year-end, keep it broad but have conviction. In this case, I would argue that there will be a decline in new issuances because of the higher interest rates despite higher demand for yield, concerns over the tax base in a number of states with declining populations (ex. California, NJ, NY) will make it harder to repay debt without raising taxes and further pushing people out, rising costs of construction and labor for publicly financed projects will have a harder time being funded, etc.
At the end of the day, these kinds of questions are meant to understand your broader understanding of how things are connected and how well you can articulate your position. It's meant to show that you can see the bigger picture and really get how connected things are.