Live Markets U.s.: Friday IPO flurry a mixed bag, Chinese deals weigh

Aesthetic Medical International Holdings

25/10/2019 18:44

* Major averages rally; S&P flirts with records
    * Tech leads sector gainers; defensives lag
    * U.S. 10-Year Treasury yield at ~1.80%

    Oct 25 - Welcome to the home for real-time coverage of U.S.
equity markets brought to you by Reuters stocks reporters and
anchored today by Terence Gabriel. Reach him on Messenger to
share your thoughts on market moves:
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    FRIDAY IPO FLURRY A MIXED BAG, CHINESE DEALS WEIGH (1330
EDT/1730 GMT)
    Five more companies made their debuts on Friday and reviews
are mixed.
    On the plus side, fertility benefits manager Progyny Inc's
 PGNY.O  stock is up about 18%, but only after the company's IPO
priced at $13 vs the $14-$16 filed range.  urn:newsml:reuters.com:*:nGNXGcRv And Phathom
Pharmaceuticals  PHAT.O  is up 15% after a mid-range pricing of
$19.  urn:newsml:reuters.com:*:nBw1WrpRZa
    But two China-to-U.S. listings are a drag. Cosmetic surgery
company Aesthetic Medical International  AIH.O  is sinking 35%
below its $12 IPO price  urn:newsml:reuters.com:*:nASC0AG3W and NetEase Inc  NTES.O 
online education subsidiary Youdao Inc  DAO.N  opened about 21%
below its IPO price.  urn:newsml:reuters.com:*:nFWN27A0W5
    Also weighing on Friday is Cabaletta Bio  CABA.O , which is
down 18% even after pricing its IPO at $11, well below the
$14-$$16 marketed range.  urn:newsml:reuters.com:*:nFWN27A19B
    This brings the 2019 IPO count to 137 deals, per Reuters
calculation. The average return has collapsed to about 4%
compared to more than 30% at the end of June, with half the
stocks in positive territory.
    
    (Lance Tupper)
    *****  
    
        
    
    BULLISH SENTIMENT SWELLS TO A 12-WEEK HIGH (1302 EDT/1702
GMT)
    Optimism about the direction of stock prices over the next
six months has risen to a 12-week high in the latest American
Association of Individual Investors (AAII) Sentiment Survey.
    AAII reported that bullish sentiment increased 2.0
percentage points to 35.6%. Optimism was last higher on July 31,
2019 (38.4%). Nonetheless, bullish sentiment is below its
historical average of 38.0% for the 35th time this year and the
23rd time in 24 weeks. 
    Bearish sentiment dipped 2.8 percentage points to 28.3%.
Pessimism is below its historical average of 30.5% for just the
third time in 14 weeks. 
    Neutral sentiment rose 0.8 percentage points to 36.1%.
Neutral sentiment is above its historical average of 31.5% for
the 22nd time in 23 weeks. 
    As a result of these changes, the bull-bear spread rose to
+7.3 from +2.6 last week. That's the largest positive spread
since September 19.
 
 
 
 
   AAII noted that many individual investors continue to monitor
trade negotiations, particularly between the U.S. and China.
Additional factors having an influence on sentiment are
Washington politics, geopolitics, valuations, corporate
earnings, economic growth, monetary policy and interest rates.
    
    (Terence Gabriel)
    *****  
    
    S&P 500 FLIRTS WITH RECORD HIGHS (1207 EDT/1607 GMT)
    The S&P 500  .SPX  reached 3,027.39 nearly touching its
3,027.98 July 26 record intraday high. It has since backed away
slightly. For a new closing high, the broad market average will
need to end above 3,025.86 (also set on July 26).
    After slight opening losses, the major averages reversed
higher. An additional push has been provided by a report that
the U.S. and China are close to finalizing some sections of a
trade agreement after a phone call between top negotiators.
 urn:newsml:reuters.com:*:nW1N26M01E
    Meanwhile, the Nasdaq Composite  .IXIC  and Dow  .DJI  are
both about 1% shy of their record intraday highs.
    Here is where markets stand approaching the mid-day mark:

 
 
    (Terence Gabriel)
    *****

    
    CONSUMERS TO THE RESCUE: UMICH DATA HELPS WALL STREET
REVERSE COURSE (1115 EDT/1515 GMT)
    Consumer optimism edged higher in October, helping Wall
Street reverse its losses as investors digest a busy week of
corporate earnings.    
    The University of Michigan's final reading of consumer
sentiment  USUMSF=ECI  released on Friday came in at 95.5, a
hair lower than the reading 96 economists expected.
    That headline number, along with the "current conditions"
 USUMCF=ECI  and "expectations"  USUMF=ECI  components, all
showed modest improvement over September, albeit not as much of
an improvement suggested by the preliminary October reading
released on Oct 11.    
 
    "The overall level of consumer confidence has remained quite
favorable and largely unchanged during the past few years,"
wrote Richard Curtin, chief economist at UMich's Surveys of
Consumers. 
    Short- and long-term inflation expectations  USUM1F=ECI 
 USUM5F=ECI  both eased up this month to 2.5% and 2.3%,
respectively, dipping closer to the U.S. Federal Reserve's 2%
inflation target.
 
    The resilience of the American consumer, who contributes
about 70% to U.S. GDP, has been the tent pole propping up the
longest period of economic expansion in the nation's history.
    Market participants have been closely eyeing consumer data
for signs that a tumultuous geopolitical climate and the
resulting global economic downturn has reached U.S. shores.
    But geopolitical strife has so far been largely shrugged off
by the consumer, according to Curtin.
    "The focus of consumers has been on income and job growth,
while largely ignoring other news," Curtin said. "To be sure,
the multiple sources of uncertainty will keep consumers focused
on potential threats to their prevailing optimism, with the most
critical being threats that could significantly diminish their
job and income prospects."
 
   While coming in below economist estimates, the UMich report
did show an improvement, and that was enough to prod the three
major U.S. stock averages into positive territory.
    It should be noted, however, that both consumer
discretionary  .SPLRCD  and consumer staples  .SPLRCS  were
among the losers, both down about 2%.
    
    (Stephen Culp)
    *****
    
    STOCKS DIP, THEN REVERSE IN EARLY TRADE (1034 EDT/1434 GMT)
    Major averages gapped slightly lower to kick off trading on
Friday, but have since reversed into positive territory. Action
has the S&P 500  .SPX  now only about 0.4% away from its
3,027,98 record intraday high.
    Sectors are mixed with tech  .SPLRCT  leading the way
higher. Consumer discretionary  .SPLRCD  is among the losers.
This with Amazon.com  AMZN.O  down about 2.5% on its quarterly
report.  urn:newsml:reuters.com:*:nL3N27A2CQ Nevertheless, the NYSE FANG+TM Index
 .NYFANG  is rallying about 0.5%.  urn:newsml:reuters.com:*:nL2N2790FI
    Gold stocks are among early winners. The VanEck Vectors Gold
Miners ETF  GDX.P  is up 1.2%.  urn:newsml:reuters.com:*:nL2N27916R
    Here is your early market snapshot:
    
 
 
    (Terence Gabriel)
    *****
   
    
    S&P 500 FUTURES: ANOTHER LOWER HIGH? (0915 EDT/1315 GMT)
    CME E-Mini S&P 500 Futures  EScv1  are off just slightly in
premarket trade. Nevertheless, they are threatening to roll over
after nearing the resistance line from the July top. As stands,
Thursday's push to 3,015.25 may now mark another lower high.
(Click on chart below)
    Indeed, with the Futures now backing away, they are at risk
of having stalled just shy of the 3-month resistance line (now
at about 3,021) and the mid-September high (3,026). The July
intraday record high is 3,031.75.
    Meanwhile, daily momentum is also at risk of rolling over as
the MACD's ascent wanes. Recent bearish MACD signals preceded
sharp sell-offs into the June, August and October troughs.
    The Futures breaking their October 23 low (2,982) can see
pressure intensify. The rising 50 and 100-day moving averages
may then be the next magnets (2,958.35/2,953.56 Thursday
closes).
    A thrust above the resistance line from the July high,
however, can suggest room for new highs. However, even in that
event, upside may still be limited given that the resistance
line from early 2018, and the potential upper boundary of a
large expanding triangle pattern (now at about 3,055), is only
about 1% above the July high.  urn:newsml:reuters.com:*:nL2N2780BK
    
 
 
   
    (Terence Gabriel)
    *****
      
        

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EScv110252019    https://tmsnrt.rs/2Ncq6OV
earlytrade10252019    https://tmsnrt.rs/33ZnHxR
Consumer sentiment Image    https://tmsnrt.rs/2PlFBqj
UMich inflation Image    https://tmsnrt.rs/2WcmS1Y
UMich expectations Image    https://tmsnrt.rs/31MJ6ZE
midday10252019    https://tmsnrt.rs/2BMayvO
AAII10252019    https://tmsnrt.rs/32Ihoyt
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