Live Markets: Bumble generates buzz as IPO pace set to stumble

Neximmune

09/02/2021 17:50

* S&P dips, Dow, Nasdaq up slightly
    * Energy weakest major S&P sector; comm services leads
gainers  
    * Dollar down; gold, crude rise
    * U.S. 10-Year Treasury yield ~1.15%  

    Feb 9 - Welcome to the home for real-time coverage of
markets brought to you by Reuters reporters. You can share your
thoughts with us at markets.research@thomsonreuters.com
     
    
    BUMBLE GENERATES BUZZ AS IPO PACE SET TO STUMBLE (1245
EST/1745 GMT)
    Bumble Inc  BMBL.O  is turning heads as the online dating
app looks to make its public debut on Thursday. Bumble is
seeking to raise as much as $1.8 billion after the company early
Monday boosted its deal size to 45 million shares and hiked its
IPO marketing range to $37-$39.  urn:newsml:reuters.com:*:nL4N2KE2XW
    Including Bumble, about a dozen aspirants were on this
week's calendar, following the 14 traditional IPOs that priced
last week.
    Companies have been rushing to get their IPOs done as major
indexes hit new highs. But with 2020 September-quarter
financials going stale by mid-month, the IPO pace will likely
slow for a while.
    
    Here's a list of some expected IPOs this week, by targeted
debut date:
    
    Feb 10:
    Viant Technology  DSP.O  (advertising tech) (~$200M)
    Feb 11:
    AFC Gamma  AFCG.O  (commercial mortgage REIT) (~$100M)
    Apria  APR.O  (home healthcare) (~$150M)
    Bioventus  BVS.O  (biotech) (~$130M)
    Bumble (online dating) (~$1.8B)
    Signify Health  SGFY.N  (in-home healthcare payments)
(~$440M)
    Feb 12:
    Decibel Therapeutics  DBTX.O  (biotech) (~$100M)
    NexImmune  NEXI.O  (biotech) (~$80M)
    Talis Biomedical  TLIS.O  (medtech) (~$160M)
    
    (Lance Tupper) 
    ***** 
    
        
    EUROPE CLOSES UNINSPIRED (1155 EST/1655 GMT)
    It's pretty safe to assume February 9, 2021 won't be
remembered as a key date in the history of European stock
markets. 
    The STOXX 600 closed down 0.1% and there just wasn't much
out there to shape a trading trend throughout the session. 
    "It has been a directionless trading session as the bullish
mood that has been circulating recently has faded, hence why
European equity benchmarks are mixed", wrote David Madden at CMC
Markets. 
    It seems something is needed to spice things up if the
pan-European index seeks to join its global peers in breaking
record highs.
    That's about 5% away, but there's just no catalyst in sight
in the very short term. 
    "While optimism over the impending U.S stimulus package and
an impressive ramp-up in Covid vaccinations have bolstered
equity prices, that rally has started to fade somewhat as
traders seek further fuel for the fire", commented Joshua Mahony
at IG. 
    Some earnings action can be expected tomorrow though with
notably France's Societe Generale, Deutsche Boerse, Heineken and
Delivery Hero among closely watched stocks.
    
    (Julien Ponthus) 
    ***** 

    WHY HAVE RAIL STOCKS GROUND TO A HALT? (1126 EST/1626 GMT)
    The stock market's rally to start 2021 has left U.S.
railroad stocks back at the station.
    An index of the four S&P 500 rail stocks  .SPLRCRAIL  has
fallen about 1.5% so far this year. That performance not only
lags the 4% gain for the S&P 500  .SPX  but also the nearly 3%
rise for the Dow Jones Transportation Index  .DJT  that includes
the rail stocks.    
    Bernstein analyst David Vernon has several potential reasons
for why the rail stocks have stopped chugging along after a
strong end to 2020.
    Rail stocks have been popular long holdings for hedge funds,
which have been "eager to take down risk," Vernon writes in a
note. The stocks are an obvious beneficiary from an economic
recovery, but with that recovery now well expected, investors
may be seeking to "sell the news," according to Vernon.
    Alternatively, investors may prefer stocks that are more
levered to a cyclical rebound that are cheaper, the analyst
writes.
    But Vernon sees a clear path ahead for the stocks from here.
He has a positive view of the sector, and for U.S. rails, he has
"outperform" ratings on CSX Corp  CSX.O  and Union Pacific Corp
 UNP.N .
    "There is more to the rail story than just a fantastic
cyclical recovery in 2021," Vernon writes. "Investors can buy
that coiled spring, as volume driven leverage should be
fantastic, and stay for the pricing and sustainable growth story
that should follow in 2022."
    
    (Lewis Krauskopf)
    *****
    
    HELP WANTED: JOLTS, NFIB SHOW LABOR SHORTAGE, STIMULUS NEED
(1101 EST/1601 GMT)
    Surging COVID-19 infection rates have had a chilling effect
on the U.S. labor market and small business sentiment, suggests
economic data released on Tuesday.    
    Churn in the jobs market cooled down a bit in December,
according to the Labor Department's job openings and labor
turnover survey (JOLTS)  USJOLT=ECI .  urn:newsml:reuters.com:*:nL1N2KF1SB
    While the report showed increased job openings, new hires
and layoffs both edged lower. This could signify a certain
amount of stabilization; with open positions growing steadily
and separations pulling back from November's peak.
    The quit rate increased from 2.2% to 2.3% of the work force.
While quits are ordinarily viewed as a barometer of consumer
expectations - workers are less likely to walk away from a job
in times of economic uncertainty - spiking COVID-19 infections
and challenges associated with remote learning likely
contributed to the number.
    The cool-down suggested by December's JOLTS extended into
January. The employment report released last Friday showed the
economy added a pitiful 49,000 jobs last month, and 9.9 million
jobs lost to the pandemic have yet to be regained.
    Rising job openings amid fewer hires reflects one of the
many challenges faced by many small businesses as they weather
the storm of pandemic recession.
    In fact, per the National Association of Independent
Business (NFIB), 90% of small companies hiring or trying to hire
reported few or no qualified applicants.
    NFIB's January optimism index  USOPIN=ECI  showed small
business outlook deteriorated last month to its lowest level
since May.
    The overall index ticked down 90 basis points to a reading
of 95 from 95.9, driven by new round of restrictions to curb the
flow of a resurgent pandemic and economic policy uncertainty. 
    "As Congress debates another stimulus package, small
employers welcome any additional relief that will provide a
powerful fiscal boost as their expectations for the future are
uncertain," said Bill Dunkelberg, chief economist at NFIB. "The
COVID-19 pandemic continues to dictate how small businesses
operate and owners are worried about future business conditions
and sales."
    Indeed, sales and earnings expectations grew dimmer;
"overall, not a positive picture," added Dunkelberg. But the
employment picture brightened somewhat and expected expenditures
gained ground.
    It should be noted that NFIB is an advocacy group that
operates a political action committee (PAC) called Save
America's Free Enterprise Trust.
    And a Democrat being sworn into office did little to boost
NFIB sentiment.
    "The NFIB sample has a strong Republican bias," notes Ian
Shepherdson, chief economist at Pantheon Macroeconomics. "So
we're not surprised that the headline index has plunged since
the election."
    Investors appeared to be taking a breather following
Monday's rally. The three major U.S. stock indexes are mixed,
with the S&P 500  .SPX  and Dow  .DJI  easing off yesterday's
record closing highs, while the Nasdaq  .IXIC  is edging up.
    
    (Stephen Culp)
    *****
        
    U.S. STOCKS DIP EARLY; STREAKS AT RISK (1001 EST/1501 GMT)
    In the wake of several disappointing quarterly earnings
reports, while investors closely track progress on passing a
proposed $1.9 trillion stimulus plan, the S&P 500  .SPX  is
dipping in early trade.  .N 
    With the early weakness, index streaks are now at risk.
    The SPX has closed up six straight sessions which is its
longest run of consecutive higher daily closes since a 7-day
streak from August 20 to August 28 of last year. Of note, back
then, the SPX topped 3 trading days later and promptly slid more
than 10% into late September.
    In any event, 6-day win streaks in the Dow Industrials
 .DJI , the S&P 400 mid-cap  .IDX , the S&P 600 small-cap
 .SPCY , the Russell 2000  .RUT , and the NYSE Composite  .NYA 
are also at risk of ending.
    The Nasdaq  .IXIC , however, is slightly higher, and going
for a 4th straight daily gain.
    Meanwhile, the yield on the U.S. 3-Month Treasury Bill
 US3MT=RR  is rising on Tuesday. Of note, despite new highs in
stocks on Monday, the 3-month T-Bill closed at 0.03%, or its
lowest level since March 27, 2020, which was 4 trading days
after the stock market bottomed:
    
    Here is where markets stand in early trade:
  
  
    (Terence Gabriel)
    *****
    
    
    YOU KNOW BITCOIN CAN FALL RIGHT? RIGHT? (0922 EST/1422 GMT)
    Turbocharged by the Tesla hype, bitcoin is trading around
$46k a chip but it seems some investors haven't fully grasped
how risky crypto is. 
    A January online survey of 1,134 UK cryptocurrency investors
conducted by findoutnow on behalf of AJ Bell shows there's some
kind of misunderstanding about the risks involved. 
    "30% of cryptocurrency investors are not willing to lose any
of the money they’ve invested, which suggests they lack an
appreciation of the potential downside of their investment",
Laith Khalaf, an analyst at the investment platform. 
   "Only one in four cryptocurrency investors would be willing
to lose 75% or more of their investment, which is not beyond the
bounds of possibility, given the volatility of the asset class",
he added.
    Another interesting finding is that crypto buyers are not
your regular mom and pop investor. 50% don't have a savings
account or a pension.
    AJ Bell's take on  the survey in a nutshell? 
    "UK consumers seem to be playing Russian roulette with their
money on the cryptocurrency markets".
    Here's a chart from AJ Bell's survey showing how much of
their capital UK buyers are ready to lose when buying crypto: 
    
    (Julien Ponthus) 
    *****
    
    
    MICRO CAPS HAVING THEIR DAY (0900 EST/1400 GMT)
    Small caps have certainly been garnering their fair share of
attention of late. This as the small-cap iShares Russell 2000
ETF  IWM.P  has handily outperformed the SPDR S&P 500 ETF Trust
 SPY.P  off the March 2020 bottom.
    Indeed, the IWM has rallied as much as 138% off its March
trough vs a 79% advance for the SPY.
    That said, that gain in small caps pales in comparison to
the rise in micro caps. The iShares Micro-cap ETF  IWC.P  has
surged about 177%.
    This can be a double-edge sword as strong gains in the
shares of companies that have a market capitalization of roughly
$50 million to $300 million can suggest great confidence in the
economic outlook, or it could indicate out-of-control animal
spirits and rampant speculation. 
    In any event, with the recent outperformance of micro caps
vs large caps, the IWC/SPY ratio is fast approaching a 15-year
resistance line:
    
    
    Thus, micro caps now face a big test, which could also have
important implications for the overall market. A ratio failure
at the resistance line could lead to the kind of multi-week
divergence vs the SPY that has preceded significant market
declines.
    Conversely, a breakout would suggest potential for greater
outperformance. That said, even in that event, given that the
IWC/SPY ratio is now track to rise for a 6th straight week, and
13 out of the last 14 weeks, any downtick may raise a red flag.
    
    (Terence Gabriel)
    *****
    
    
    FOR TUESDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EST/1400 GMT
- CLICK HERE:  urn:newsml:reuters.com:*:nL1N2KF1A9
    
    
    
    
    
    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
IWCSPY02092021    https://tmsnrt.rs/3cVeH4p
sdf    https://tmsnrt.rs/3tBaNDX
US3MT02092021    https://tmsnrt.rs/3cUltrl
earlytrade02092021    https://tmsnrt.rs/3a3epXk
JOLTS    https://tmsnrt.rs/3jzSTNd
NFIB    https://tmsnrt.rs/3jFFdAo
U.S. railroad stocks lag to start 2021    https://tmsnrt.rs/3a3QlE3
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Terence Gabriel and Lance Tupper are Reuters market analysts.
The views expressed are their own)