Live Markets U.s.: IPO market still hot heading into summer

Genetron Holdings

19/06/2020 18:22

* S&P, Dow turn negative, only Nasdaq clings to a gain
    * Health sector is sole sector with gainers
    * Dollar, crude, gold higher; US 10-yr yield ~0.70%

    June 19 (Reuters) - 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:
terence.gabriel.tr.com@reuters.net 
    
    
    IPO MARKET STILL HOT HEADING INTO SUMMER (1315 EDT/1715 GMT)
    Four more companies, all from the healthcare sector, went
public on Friday as the IPO market continued to crank out deals.
    The largest deal came from Forma Therapeutics  FMTX.O ,
which develops drugs for rare blood diseases, after the company
priced 13.9 million shares at $20 for a $278 million haul. FMTX
opened at $40, rose to as high as $47.49, and was last up ~100%
 urn:newsml:reuters.com:*:nBw6xWWnMa.
    Repare Therapeutics  RPTX.O  was up 71% after the
pre-clinical stage precision oncology company sold 11 million
shares at $20, the top of an upwardly revised range of $18-$20
 urn:newsml:reuters.com:*:nBw6hznyva.
    But biotech Progenity Inc  PROG.O  was down ~5% vs its $15
IPO price  urn:newsml:reuters.com:*:nGNX8P5Sb5, while Chinese medtech firm Genetron
Holdings  GTH.O  traded just above issue after it priced 16
million American Depositary Shares at $16, well above the
$11.50-$13.50 marketed range  urn:newsml:reuters.com:*:nGNXwkxYJ.
    This offering quartet followed a strong showing earlier this
week by Royalty Pharma  RPRX.O , who still wears the crown as
the largest U.S. IPO of 2020 so far with a $2.18 billion raise.
RPRX was last up ~70% from its offer price  urn:newsml:reuters.com:*:nL1N2DT195.
    Hoping to tap into seemingly voracious investor appetites
for new listings, grocer Albertsons launched its $1-billion-plus
IPO late Thursday. The private equity-backed company is
currently targeting a NYSE debut next Friday with the symbol
"ACI"  urn:newsml:reuters.com:*:nL1N2DV2MQ.
    Meanwhile, the Renaissance IPO ETF, which includes shares of
companies that recently went public, keeps hitting new record
highs and has rise about 33% year-to-date. Here are the ETF's
top 10 holdings as of May 31, 2020.  
 
 
    (Lance Tupper)
    *****
    
           
    BETS ARE ON GAMBLERS RETURNING TO CASINOS (1200 EDT/1600
GMT)
    
   The broader market took a bullish tone on Friday as investors
leaned again towards hopes for a strong recovery as coronavirus
restrictions continued to ease and previously battered sectors
such as casinos outperformed. 
    Shares in Wynn resorts  WYNN.O , up 1.5%, MGM Resorts
 MGM.N , up 0.9, Las Vegas Sands  LVS.N , up 0.5%, were all
rising faster than the market with the S&P gaining just 0.2%
    Jefferies gaming analyst David Katz wrote late Thursday that
geolocation data showed increasing foot traffic in Las Vegas,
Nevada and in regional casinos. 
    Adjusted for days of the week, Nevada's's casino foot
traffic last week was ~22% of '19 levels while while traffic
Saturday, June 13th was roughly 27% of last year's volume, Katz
notes. 
    While this looks good he said, "it remains to be seen if the
level of traffic will continue to grow."
    However, regional markets are also showing signs of life. In
Louisiana, the first state to reopen commercial casinos, casino
foot traffic rose on a rolling-7 day basis and as a percentage
of 2019 levels. On Thursday, 6/11 traffic was particularly
strong there at 85% of 2019 volume, with a weekly average of
66.5% while Florida was next strongest with the week averaging
64% and Mississippi was third at 60%.
    But as Katz said in the title "All Feet are Not Created
Equal." For example, he said Las Vegas relies for now on
drive-in customers from Southern California while "top-tier,
fly-in customers and groups have yet to return."
    Also giving the analyst pause is risks of a second wave of
COVID-19 cases. On Friday, the World Health Organization (WHO)
said the coronavirus pandemic is accelerating, with Thursday's
150,000 new cases the highest in a single day and nearly half of
them in the Americas.  urn:newsml:reuters.com:*:nL8N2DW4FJ 
    Katz notes that Nevada saw an inflection in COVID-19 case
numbers after two weeks of reopening with a restaurant at the
Bellagio closing on Wednesday after an employee tested positive.
    (Sinéad Carew)
    *****
       
    BULLS AND BEARS: SOCIAL DISTANCE WIDENS AGAIN (1122 EDT/1522
GMT)
    Optimism over the short-term direction of the stock market
took a dive according to the latest American Association of
Individual Investors (AAII) Sentiment Survey. Meanwhile,
pessimism jumped.  
    AAII reported that bullish sentiment, or expectations that
stock prices will rise over the next six months, slid 9.9
percentage points to 24.4%. Optimism remains below its
historical average of 38.0% for the 15th consecutive week and
the 20th week this year.
    With this, bearish sentiment jumped 9.7 percentage points to
47.8%. Bearish sentiment is above its historical average of
30.5% for the 17th consecutive week.
    Neutral sentiment edged up 0.2 percentage points to 27.8%.
Neutral sentiment was last higher on February 26, 2020 (30.4%).
Even with the further rise, neutral sentiment is below its
historical average of 31.5% for the 18th consecutive week and
the 22nd time in 23 weeks. 
    AAII noted that historically, unusually low bullish
sentiment and unusually high bearish readings have generally
been followed by above-average and above-median returns for the
S&P 500 index, though the link is stronger to the unusually low
bullish reading.
    With these changes the bull-bear spread collapsed to minus
23.41 from minus 3.77 last week  urn:newsml:reuters.com:*:nL1N2DP0MS:
 
 
    In this week's special question, AAII asked its members for
their thoughts about the Federal Reserve potentially keeping
interest rates at their current level until 2022.
    Slightly less than 20% of respondents said that low interest
rates will have an impact on savers, while 12% of respondents
said that low interest rates will benefit the stock market.
About 10% said the Fed will increase interest rates as the
economy recovers, while 10% stated that the Fed will need to
increase rates at an earlier date to keep inflation at bay.
    
    (Terence Gabriel)
    *****

    
    WILL A CONSUMER SPENDING SPREE KICK-START THE ECONOMY? (1037
EDT/1437 GMT)
    Last week's record 17.7% jump in retail sales, an uptick in
consumer optimism and signs of pent-up demand together suggest
that U.S. consumer data will continue to surprise to the upside,
according to a research note from Credit Suisse.
    "Consumer wallets are bursting at the seams, the result of
massive government transfer payments and a steep, involuntary
collapse in spending," writes Jonathan Golub, chief U.S. equity
strategist at Credit Suisse.  
     In a massive effort to prop up an economy brought to its
knees by widespread mandated lockdowns, the government has
replaced every $1 lost with more than $2 in aid, Golub says,
noting that this money will be spent as state economies continue
to re-open.
    As the U.S. consumer contributes about 70% to GDP, a
loosening of purse strings would be essential for the economy,
now in its fifth month of recession, to rebound.
    Below, we see monthly retail sales growth against retail
stocks. The S&P Retail Composite has shown a full recovery from
the coronavirus trough. 
    It should be noted though that May's impressive spike in
retail sales  USRLS=ECI  only recovers a fraction of the
March-April loss. Recent stock market gains would suggest that
forward looking investors expect the trend to continue.
 
    The next chart supports Golub's belief that American
consumers are itching to reopen their wallets.
    "It is difficult to spend a lot of money when you can’t
leave home," Golub points out. 
    This is reflected in a huge spike in the savings rate, and
when combined with the recent uptick in consumer expectations,
provides evidence that some splurging is in the cards. 
 
    Investors this morning are showing an ebullience that was
missing since early in the week, with all three major U.S. stock
indexes solidly higher.
    (Stephen Culp)
    *****
    
    QUADRUPLE WITCHING MAY BRING MORE SPIRITED TRADE (0857
EDT/1257 GMT)
    In the wake of the subdued trading action of the past
several days, futures are pointing to opening gains on
quadruple-witching Friday. Thus, the S&P 500  .SPX  has the
potential to end its 2-session holding pattern.  urn:newsml:reuters.com:*:nL1N2DV20L
 urn:newsml:reuters.com:*:nL1N2DU20D  
    Indeed, investors appear to be wagering on a bounce back in
post-pandemic economic activity, shrugging off the daily
increase in new coronavirus infections in several states.  .N 
    S&P 500 e-minis  EScv1  are suggesting around a 30 point, or
1%, jump for the SPX in early trade, which can allow the
broad-market average to challenge Wednesday's high for the week
at 3,153.45.
    Here is your premarket snapshot:
    
 
 
    (Terence Gabriel)
    *****

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
premarket06192020    https://tmsnrt.rs/2V0FtyK
Retail sales    https://tmsnrt.rs/2NdATZO
saving rate    https://tmsnrt.rs/30XwH8r
AAII06192020TG    https://tmsnrt.rs/3fyCkxQ
Renaissance Capital IPO ETF Top 10 Holdings through May 31 2020 
  https://tmsnrt.rs/3ejYGTB
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Terence Gabriel and Lance Tupper are Reuters market analysts.
Their views expressed are their own)
 ((terence.gabriel.tr.com@reuters.net
terence.gabriel@tr.com 646-223-4122))