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LIVE MARKETS-IPOs score perfect 10

Fri 11th December, 2020 6:30pm
* U.S. indexes down, Nasdaq off about 0.8% * Energy, financial sectors down most * Consumer sentiment unexpectedly jumps * Europe's STOXX closes down 0.8% * Dollar, gold up; crude dips; US 10Y Treasury yield ~0.89 Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at IPOS SCORE PERFECT 10 (1330 EST/1830 GMT) The IPO market remains blazing hot as all 10 deals on this week's docket priced and popped. Healthcare was the theme of the day on Friday as Vivos Therapeutics VVOS.O , AbCellera Biologics Inc ABCL.O , 4D Molecular Therapeutics Inc FDMT.O , Certara Inc CERT.O and U.S.-listed shares of French biotech Nanobiotix NBTX.O all jump in debut*:nL4N2IR2UK*:nL4N2IA3SX*:nL4N2IR3C9*:nL4N2IR3EM*:nL4N2IR2XV. And while home rental firm Airbnb ABNB.O and food delivery app DoorDash DASH.N dominated the headlines, AI software firm Inc's AI.N stock has more than tripled since its market debut on Wednesday*:nL1N2IQ1WX. Year-to-date, the average return for 2020 IPOs stands at an astounding 67% with 53 debutantes having at least doubled, per a Reuters analysis. The IPO parade is winding down for the year with three deals currently on next week's calendar, including a $1.1 billion deal for e-commerce company Wish/ContextLogic WISH.O*:nL4N2IN2Y8 (Lance Tupper) ***** VACCINE DOES NOT MAKE INVESTORS IMMUNE TO WORRY (1301 EST/1801 GMT) Vaccines against COVID-19 are starting to be approved and administered around the world, bringing with them the promise of a recovery of the coronavirus-stricken economy. But the vaccine roll-out is keeping investors on edge. A Deutsche Bank survey asking about the biggest risks to markets in 2021 found that the top three were all related to vaccines, according to a note from DB strategist Jim Reid. The most cited risk, at nearly 40% of the 984 responses, was that the virus mutates and dodges vaccines. Second, at just over 35%, was that serious vaccine side effects start to emerge. Third, at just below 35%, was that enough people refuse to take vaccines that it hampers back-to-normal drives. That the top three results were all vaccine-related, Reid said, "may suggest that although consensus is for a good 2021, a successful vaccine roll out could still bring upside surprise relative to expectations." For his part, Reid said his top pick was a tech bubble bursting, which came in number four on the overall list. (Lewis Krauskopf) ***** MIDDAY UPDATE: RISK-OFF MOOD SENDS INVESTORS FLEEING FOR SAFETY (1213 EST/1713 GMT) All three major U.S. stock indexes hovered near session lows in midday trading, as complications stymied fiscal stimulus negotiations on Capitol Hill and a leading vaccine candidate was dealt a setback. The Nasdaq was suffering the biggest percentage drop, weighed down by chipmakers. The Philadelphia SE Semiconductor index .SOX was well underperforming the broader market, falling 2%. Meanwhile, U.S. Treasury yields were down and gold was up, implying that investors were fleeing equities for the shelter of safe-haven assets.*:nL1N2IR1M8 Sanofi SASY.PA and GlaxoSmithKline GSK.L said clinical trials of their COVID-19 vaccine showed an insufficient immune response in older people, delaying its launch to late next year.*:nL1N2IR0BD Hopes for a timely bipartisan agreement on a new fiscal aid package were dampened after House Speaker Nancy Pelosi said talks could extend through Christmas.*:nL1N2IQ1SE (Stephen Culp) ***** PENNIES FROM HEAVEN: CONSUMERS SEE BRIGHTER DAYS AHEAD (1105 EST/1605 GMT) Data released on Friday showed the consumer - who contributes about 70% to U.S. economic growth - is surprisingly more upbeat about the future in the wake of the presidential election and recent vaccine progress, even as the pandemic rages on. Consumers have found reasons to be cheerful in the final month of a challenging year, according to the University of Michigan's preliminary take on December consumer sentiment USUMSP=ECI . The index unexpectedly shot up to 81.4 from November's 76.9, surprising analysts, who had forecast a slight decline to 76.5. While the current conditions and expectations subcomponents both increased - with current conditions hitting the highest level since March - the brighter attitude was divided along party lines, according to Richard Curtin, chief economist at UMich's Surveys of Consumers. The survey showed "a surprising increase in early December due to a partisan shift in economic prospects," Curtin writes, adding "Following Biden's election, Democrats became much more optimistic, and Republicans much more pessimistic, the opposite of the partisan shift that occurred when Trump was elected." Still, consumers aren't quite ready to pop the champagne cork. "Consumers' sentiment is quite resilient, though it remains well below its pre-Covid level," says Ian Shepherdson, chief economist at Pantheon Macroeconomics. "Recovering that lost ground likely will have to wait until the pandemic is over, but in any event it’s important to remember that confidence measures have not been a good (indicator) to spending in recent months," Shepherdson adds. "Households aren't happy, but in aggregate they are holding a great deal of cash." Separately, the prices U.S. companies get for their goods at the factory door - or producer prices (PPI) USPPFD=ECI - inched up a paltry 0.1% in November, a deceleration from the previous month's 0.3% gain and slower than the 0.2% consensus.*:nL1N2IR17Z The Labor Department's PPI report supports views that the economic effects of new restrictions to curb spiking COVID-19 will keep inflation tepid in the near term. Core PPI USPPTY=ECI - which excludes food, energy and trade services - rose 0.9% year-on-year, an improvement from October's 0.8% annual rate. Still, it remains, along with most other major inflation indicators, below the U.S. Federal Reserve's average annual 2% target. PPI "remains a historically tame reading compared to pre-pandemic levels," according to Mahir Rasheed, associate U.S. economist at Oxford Economics. "Data suggests that households are still hesitant to spend at pre-virus levels, signaling that price dynamics will continue to undershoot the Fed’s 2% target in the near-term," Rasheed adds. Consumer optimism wasn't particularly contagious, as investors remained in a risk-off mood in late morning trading. All three major stock indexes were modestly red. (Stephen Culp) ***** OUT OF HIBERNATION (1001 EST/1501 GMT) Bearish sentiment among investors rebounded in the latest survey by the American Association of Individual Investors (AAII), after hitting an 11-month low a week ago. Bearish sentiment, which is expectations that stock prices will fall over the next six months, rose by 4.2 percentage points to 26.9%, according to the weekly AAII Sentiment Survey. The level remains below the historical average of 30.5% for the fifth consecutive week. Bullish sentiment dipped 1.0 percentage point to 48.1%, but was above its historical average of 38% for the fifth straight week. Neutral sentiment fell 3.2 percentage points to 25.1%. Even with the tick up in bearish views, bullish sentiment "remains at an unusually high level", AAII said, with readings of at least 48% for the second consecutive week and the third time out of the past five weeks. Such readings historically have been followed by lower-than-average six- and 12-month returns for S&P 500 .SPX , AAII said. But, the group added, "given the possibility of coronavirus vaccines soon being available, the historical trends may not be repeated." The AAII survey is one of a number of indicators that Wall Street strategists recently have cited showing extreme investor optimism about stocks, as investors seize on the promise that progress for vaccines against COVID-19 will spark an economic revival.*:nL1N2IN218 (Lewis Krauskopf) ***** EUROPEAN EQUITIES: CONSOLIDATION TIME (0918 EST/1418 GMT) European equities are down these days, bearing the brunt of last month stellar rally and of fears of a hard Brexit. Some analysts do not see much of an upside also for coming months. European equities didn't give up their gains after the lockdown-induced November weak PMI data “as investors have looked through the macro weakness to a strong macro recovery next year,” BofA says in a research note. It expects “no further upside for the STOXX 600 until late-Q1, followed by renewed 10% upside by mid-2021.” One of the major downside risks is a no-deal Brexit as weaker growth and higher policy uncertainty would reduce the fair-value of the STOXX 600 by 5%, according to BofA. The bank forecasts “a temporary weakening in U.S. growth” as COVID-19 restrictions are tightened and U.S. fiscal stimulus measures expire by year-end. But if this leads to a “market pull-back, we would use this as an opportunity to re-engage with the cyclical assets that have recently overshot.” The investment bank also sees a tail-risk of a spike in real bond yields, given the potential for a strong recovery and a sharper than expected rebound in inflation, coupled with large government issuance. (Stefano Rebaudo) ***** WALL STREET SET TO OPEN LOWER AS WASHINGTON SHUFFLES ITS FEET (0905 EST/1405 GMT) Futures suggest U.S. stocks are set to sell off at Friday's opening bell, as doubts regarding Washington's ability to hammer out a stimulus agreement amid a resurgent pandemic put investors in a risk-off mood. If that mood holds, all three major stock indexes will show losses for the week. Stop-and-go progress toward a bipartisan fiscal relief package in Washington stands in stark relief against rapid and encouraging vaccine developments in recent weeks, leaving market participants torn between near-term risks and longer-term recovery prospects. U.S. House Speaker Nancy Pelosi suggested stimulus negotiations could extend through Christmas, and a vote on a stopgap spending bill to keep the government open is expected today.*:nL1N2IQ1SE A panel of advisers to the U.S. Food and Drug Administration overwhelmingly endorsed emergency use of Pfizer Inc's PFE.N COVID-19 vaccine, and the FDA is widely expected to authorize it. Distribution of the drug and inoculations would likely begin immediately after the FDA's approval.*:nL1N2IQ353 Here's your opening snapshot: (Stephen Culp) ***** FOR FRIDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EST/1400 GMT - CLICK HERE:*:nL8N2IR3RZ <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Premarket snapshot stoxx Consumer sentiment PPI ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Lance Tupper is a Reuters market analyst. The views expressed are his own.)
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