Finance U — Issue #2

Welcome to the 2nd Issue of Finance U — June 20th, 2025

📈 Wall Street & Beyond

Middle East Pause Sparks Market Rally

Markets rallied after a short-term pause in U.S. involvement in the Israel–Iran conflict. On June 20, President Trump announced a two-week delay in military action, which eased global tensions and gave investors a moment of relief. Oil prices dipped slightly, and equities rebounded across the board.

Why it matters: Even temporary geopolitical pauses can spark big swings in investor sentiment. Relief rallies like this show how quickly markets react to global conflict, and also how fragile that optimism can be.

Student Takeaway: Whether you’re investing or just tracking the news, be sure to keep an eye on international headlines. Energy prices, inflation, and even the Fed’s decisions are all connected to what’s happening globally.

UBS: Stocks Walking a “High-Wire Act”

UBS issued a warning this week that U.S. stocks may be overextended heading into the summer. Despite recent gains, analysts are concerned about high valuations in the tech sector and the fact that most of the S&P 500’s performance is being driven by just a few big names like Nvidia, Microsoft, and Apple. In addition, valuations across the tech sector are beginning to stretch beyond historical averages, while inflation remains sticky and interest rates are still elevated. This combination of high expectations and macro uncertainty could make for a volatile summer.

Why it matters: When only a few stocks are pulling the market higher, it signals fragility. It means the success of the broader index depends too heavily on the continued strength of a small group of companies. That creates risk, not just for traders, but for long-term investors, too.

Student Takeaway: This is a perfect time to understand diversification. Whether you're building your first Roth IRA or exploring ETFs, spreading your investments across sectors and styles reduces your exposure to downturns in any single stock or industry. Tech is exciting, but stability comes from balance. Dont put all your eggs into one basket.

🧠 Finance 101: The Balance Sheet

Understanding the Balance Sheet
A balance sheet is one of the core financial statements used to assess the health of a business. It shows what a company owns (assets), what it owes (liabilities), and what’s left for shareholders (equity), all at a single point in time. The formula is simple:
Assets = Liabilities + Shareholders’ Equity

• Assets: Cash, inventory, property, equipment

• Liabilities: Loans, accounts payable, taxes owed

• Equity: Retained earnings, stock issued, and owners’ capital

Think of it as a financial snapshot that reveals whether a company is growing responsibly or stacking up debt.

Why it matters: Investors, lenders, and analysts use the balance sheet to evaluate a company’s stability. Are they drowning in debt? Holding too much inventory? Sitting on piles of cash? It’s all in the sheet. Understanding it helps you gauge a company’s ability to survive economic shocks or fund future growth.

Student Takeaway: If you’re new to investing, try reviewing the balance sheets of companies you know ( like Apple or Nike) and using Yahoo Finance or EDGAR. It’s a practical way to connect classroom concepts to real-world companies and start building financial literacy.

🔦 Term Spotlight: Debt-to-Equity (D/E) Ratio

What to Know
The Debt-to-Equity Ratio is a financial metric that compares how much debt a company uses to finance its operations relative to the amount of shareholders’ equity. It’s calculated using this formula: D/E Ratio = Total Liabilities ÷ Shareholders’ Equity

This ratio is found directly from the balance sheet and helps analysts evaluate a company’s financial leverage: how much it relies on borrowed money versus what it actually owns.

Why it matters: A high D/E ratio can mean a company is aggressively financing growth with debt, which could be risky if earnings slow down or interest rates rise. On the other hand, a low D/E ratio suggests the company is more conservatively financed and might have more flexibility during downturns.

Student Takeaway: Think of it like your own finances; if you borrow $10,000 and only have $1,000 of your own money saved, you’re highly leveraged. Learning how to read the D/E ratio early on can help you evaluate companies you might invest in, and even shape how you manage your own personal debt in the future.

💼 Prep Like a Pro: Coffee Chats ☕

Coffee chats are one of the best-kept secrets in career building. They’re informal conversations (usually 15–30 minutes) where you can learn about someone’s job, company, career path, and build meaningful connections along the way. The best part? You don’t need any experience; just curiosity and a little courage.

How to ask for one: Keep it short and respectful. Use LinkedIn, email, or a mutual connection to reach out.

What to say once they say yes:

1. Start by thanking them and giving a quick intro (name, school, major).

2. Ask thoughtful questions like:

   • What led you to your current role?

   • What does a typical day look like?

   • What advice would you give someone just starting out?

3. Keep it conversational: you’re there to learn, not to pitch. Ask your questions, but don’t sound like you’re reading off a script; flow with the conversation.

Student Takeaway: You don’t need a perfect resume to start building your network. A single coffee chat can lead to internships, mentors, or even job referrals down the line. All it takes is one message.

🧰 Toolbox: Resources to Reinforce Learning

🍿 Watch: This video breaks down the Balance Sheet in simple terms, step by step. Taught by a former investment banker, it’s perfect for taking a deeper dive into the Balance Sheet if you're a beginner or just want a quick refresher on how it works.

📚️ Read: This article from Roam College breaks down how to set up and navigate coffee chats as a student; from what to say, to how to follow up. It’s a practical guide for turning conversations into career opportunities.

🔁 The Rundown

In the 2nd issue of Finance U, we explored how global headlines like the Israel–Iran conflict and concentrated tech growth are shaping market momentum. We broke down the balance sheet as a core financial statement and introduced the debt-to-equity ratio as a key tool for measuring risk. On the career side, we shared how to set up and succeed in coffee chats; one of the simplest ways to build meaningful connections as a student.

✝️ Verse of The Week

Ecclesiastes 7:12 “Wisdom is a shelter as money is a shelter, but the advantage of knowledge is this: wisdom preserves those who have it.”

Student Takeaway: As you learn about investing, markets, and career prep, remember that knowledge is only part of the equation, wisdom is knowing how and when to apply it. Don’t just chase money. Build habits, seek mentorship, and make decisions that align with your values. That’s how you build something that lasts.

Thanks for reading the second issue of Finance U!

Feel free to reply with feedback, share with a friend, or let me know what you would like to see in future issues.

-Wrigley Stevens