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LIVE MARKETS-Bumble rumbles, IPOs stay hot

Thu 11th February, 2021 7:17pm
* Dow, S&P 500 modestly red, Nasdaq flat * Energy weakest major S&P sector; tech sole gainer * Dollar flat; gold, crude slip * U.S. 10-Year Treasury yield ~1.16% Feb 11 - Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at BUMBLE RUMBLES, IPOS STAY HOT (1400 EST/1900 GMT) Another day, another batch of IPOs pop. Bumble Inc BMBL.O on Thursday opens 77% above its $43 IPO price, valuing the online dating app operator backed by Blackstone BX.N at $14 billion.*:nL4N2KH2UC Joining the new-issue euphoria, in-home healthcare services firm Signify Health Inc SGFY.N leaps over 33% in its debut,*:nL4N2KH2RX, and home healthcare company Apria Inc APR.O (also Blackstone backed) jumps.*:nL4N2KH2UT Medical device maker Bioventus Inc's BVS.O stock is currently up nearly 50%,*:nL4N2KH2TF, while even shares of mortgage lender loanDepot LDI.N , which took a huge haircut after delaying its deal by a week, rise on Thursday.*:nL4N2KH2SL So far, of the roughly 50 traditional IPOs (aside from SPACs, or special purpose acquisition companies) that have priced this year, only about a handful are trading below issue price. For comparison sake, the Renaissance IPO ETF IPO.P , which tracks recent IPOs, is up 18% year-to-date vs the S&P 500 index's .SPX 4% advance and the Nasdaq's .IXIC approximate 9% gain. The frenetic pace of traditional IPOs, however, will likely cool off for a while. This as 2020 September-quarter financials, which aspirants have been using to market their offerings, go stale in a few days. (Lance Tupper) ***** GOOD RIDDANCE TO THE YEAR OF THE RAT (1350 EST/1850 GMT) “Bulls make money, bears make money, and pigs get slaughtered,” is an old Wall Street saying. Meanwhile, LPL Financial Research has put out a piece mentioning that the Chinese New Year (often called the Lunar New Year) will kick off Friday, February 12, and with it, will begin the Year of the Ox. Although LPL says that they would never suggest investing based on zodiac signs, it is important to note that the Year of the Ox has historically been quite strong for equities. Not to mention, we are waving goodbye to the year of the Rat, to which LPL says "good riddance." Of note, the last two years of the Rat were 2008 and 2020, which included some pretty rough sledding along the way. Since the Chinese New Year typically starts between late-January and mid-February, LPL looked at the 12-month return of the S&P 500 Index .SPX starting at the end of January dating back to 1950. Low and behold, wouldn’t you know it? According to LPL, the Year of the Ox has been up more than 13% on average (with a median advance of nearly 18%); suggesting "bulls are smiling indeed!" “The year of the Ox is the second of the 12 animal signs of the Chinese zodiac, and the Ox is considered a symbol of diligence, persistence, and honesty. Equity returns indeed are quite persistent during the Ox, as it is the third best return out of the 12 Zodiac signs,” explained LPL Chief Market Strategist Ryan Detrick. For those keeping track, of all the 12 Zodiac signs, LPL says the that historically, the best have been the Goat, Tiger, and Ox, while the Rooster and Snake have been the worst. (Terence Gabriel) ***** GAMESTOP ASIDE, SHORT INTEREST WANES (1233 EST/1733 GMT) GameStop GME.N and other stocks with heavy short positions have taken center stage in recent weeks, as amateur investors have targeted them to squeeze them and drive up their prices. That said, the number of GameStop shares shorted has fallen dramatically since last month. And overall, short interest is falling. In the latest data, as of Jan. 29, short interest on the New York Stock Exchange fell to 12.931 billion shares, compared with 13.716 billion shares as of Jan. 15. On Nasdaq, short interest fell to 9.407 billion shares as of Jan. 29, compared with 10.019 billion shares as of Jan. 15.*:nAQN03S7P5*:nFWN2KG125 NYSE short interest has fallen to a "historic low," according to EPFR. The firm calculates that the current number of total shares is the lowest since it started tracking monthly short interest in September 2008. EPFR also notes in a report that the percentage decline in NYSE short interest was the biggest since the pandemic struck in March. The lack of short interest could hold the market back. As EPFR says, "a lower volume of short interest means that there is less fuel for a future market rally if short sellers are forced to cover their short positions." (Lewis Krauskopf) ***** PAYMENT STOCKS SOAR WITH CRYPTO IN THE AIR (1107 EST/1607 GMT) Shares of payment processing companies were some of the biggest boosts for the S&P 500 .SPX on Thursday with investors betting that cryptocurrencies could bring new business. Ahead of its investor conference, which starts at 11:30 AM EST (1630 GMT), Paypal PYPL.O is leading the charge with a gain of around 5.0%. Mastercard MA.N , up about 3%, was the next biggest boost after it announced on Wednesday it was planning to offer support for some cryptocurrencies on its network this year, joining a string of big-ticket firms that have pledged similar support.*:nL4N2KG4NU Visa V.N is up around 2%. "There's just a huge appetite for anything crypto right now," said R.J. Grant head of trading at Keefe, Bruyette & Woods in New York. "There's excitement in payment processing industry about crypto becoming more mainstream." "The institutional appetite is very strong for companies allowing the mainstreaming of digital assets," said Grant whose firm specializes in the financial sector. While Grant said it was not clear how much an acceptance of cryptocurrency would add to these companies top or bottom lines he said: "I'm sure being an early mover would be positive for business. I just don't know how to quantify it." Also Bank of NY Mellon BK.N , up 2.0%, joined the rush by top-tier financial services firms to bet on digital currencies such as bitcoin on Thursday, saying it had formed a new unit to help clients hold, transfer and issue digital assets.*:nL4N2KH24F (Sinéad Carew) ***** ART, VINTAGE CARS, EXPENSIVE WATCHES AND BITCOIN (1018 EST/1518 GMT) What do they have in common? Well, they are all assets Commerzbank Research doesn't offer regular comments on. "Commerzbank Research does not consider it to be its responsibility to comment on the price development of purely speculative investments or to predict it", analysts Ulrich Leuchtmann and Thu Lan Nguyen wrote in a note of over 3,000 words dedicated to the crypto currency. "We do not offer this service for other forms of speculative investments such as works of art, vintage cars or expensive watches", they add. The analysts believe that "as bitcoin lacks the function of a store of value it cannot be used as money in the conventional sense". Moreover, "there is considerable doubt whether bitcoin will be broadly acceptable as a means of transaction medium- to long-term", they add. The note comes as bitcoin just soared past the $48,000 bar after Bank of NY Mellon said it had formed a new unit to help clients hold, transfer and issue bitcoin and other crypto currencies. Uber Technologies CEO Dara Khosrowshahi also said the firm could potentially accept bitcoin payments. The frenzy surrounding the digital currency accelerated recently when Elon Musk's Tesla revealed it had bought $1.5 billion worth of the cryptocurrency and would soon accept it as a form of payment for its cars. (Julien Ponthus and Karin Strohecker) ***** GRIM JOBLESS CLAIMS DATA TURNS UP STIMULUS HEAT (1007 EST/1507 GMT) Jobless claims data released on Thursday added urgency to U.S. Federal Reserve Chairman Jerome Powell's appeal for a broad national effort to help Americans get back to work and emphasized the need for more stimulus from Washington. The number of American workers filing first-time applications for unemployment benefits USJOB=ECI inched lower last week to 793,000 from the previous week's upwardly-revised 812,000, according to the Labor Department.*:nL1N2KG2QQ The number was 36,000 above consensus, and supports Powell's acknowledgement on Wednesday that "improvement in labor market conditions stalled" as new cases of COVID-19 surged and fresh shutdowns were re-imposed to contain its spread.*:nL1N2KG2IN To provide context, initial jobless claims have remained above 665,000 - the worst reading from the darkest days of the Great Recession - for almost one year. That number is higher than the estimated 2019 population of Portland, Oregon - 654,741 - according to the Census Bureau. Ongoing claims USJOBN=ECI , reported on a one-week lag, edged down to 4.545 million. The U.S. economy haemorrhaged 22.2 million jobs in March-April 2020. Of those, nearly 10 million have yet to return, with lower-paying, customer-facing services jobs suffering the cruellest hit. But many analysts see brighter days ahead. "With Covid cases and hospitalizations plummeting, the economy is now starting to re-open, albeit very slowly and patchily, but the direction of travel is clear," writes Ian Shepherdson, chief economist at Pantheon Macroeconomics. "The seasonal patterns suggest that claims likely dip only slightly over the next few weeks," Shepherdson adds. "But the dominant force as the spring arrives will be the fading of Covid and the reopening." Market participants chose to take the gloomy claims data as a sign that the sense of urgency regarding the passage of President Joe Biden's $1.9 trillion fiscal aid package could make the stimulus a reality sooner rather than later. All three major U.S. stock indexes are slightly green, with tech shares underpinning the Nasdaq. (Stephen Culp) ***** DOW INDUSTRIALS: AT A TIPPING POINT? (0900 EST/1400 GMT) Although the Dow Jones Industrial Average .DJI has made fresh record highs this week, it finds itself trapped in a relatively narrow space defined by weekly log-scale trendlines from early and late 2018: Indeed, the blue-chip average is attempting its second weekly close above a resistance line from early 2018. The Dow managed one marginal weekly close above this line in early January, only to struggle in its immediate aftermath. This line now resides around 31,115. On the upside, another resistance line, from late 2018, is now a hurdle at around 31,675. The Dow's range this week so far has been 31,191.20 to 31,511.44. Meanwhile, weekly volatility close-to-close has risen from a low of 7.30 in January to nearly 14. Of note, over the past 3 years, sell offs of varying degree have been preceded by sub-13.00 readings. That said, with DJI strength over the past week or so, this measure is suddenly less than forthright in its rise. Also of note, the weekly MACD is also trapped between two important levels. It has so far stalled at its early 2018 high, but is yet to break its signal line. Also of note the past 3 years, Dow tops formed amid a momentum divergence, and/or intensified with a bearish MACD crossover.*:nL1N2KG1BM Thus, a Dow breakout of the range defined by the trendlines, coupled with confirming turns in volatility and momentum studies may tip the blue-chip average toward its next more sustained thrust, one way or the other.*:nL1N2KB1QH (Terence Gabriel) ***** FOR THURSDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EST/1400 GMT - CLICK HERE:*:nL1N2KH1DN <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Dow02112021 Jobless claims Jobless claims and payrolls ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Terence Gabriel and Lance Tupper are Reuters market analysts. The views expressed are their own)
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