Live Markets U.s.: IPOs: Need a "Lyft"?

Silk Road Medical

01/04/2019 17:50

* U.S. stock indexes higher
    * Financials lead, real estate lags
    * European, Asian shares rise

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    IPOS: NEED A "LYFT"? (1240 EDT/1640 GMT)
    Lyft Inc  LYFT.O  shares hit a pothole as they broke the $72
IPO price in just their second day of trading. LYFT was last
trading around $69.80 after falling to as low as $69.12 earlier.
    Shares were skidding as Guggenheim hit "neutral" on the
ride-hailing firm  urn:newsml:reuters.com:*:nL3N21J37B, after the stock soared more than
20 percent in its debut on Friday, though it slid late in the
session on heavy volume  urn:newsml:reuters.com:*:nL1N21G0T7  urn:newsml:reuters.com:*:nL1N21G1FA
    Meanwhile, Renaissance Capital notes that the first quarter
of 2019 was the slowest quarter for IPOs by deal count in three
years. Only 18 IPOs raised $4.7 billion in the quarter, down
more than 50 percent from Q1 2018, the research firm and manager
of IPO-focused ETFs said in its quarterly review.
    The brutal selloff in equities at the end of 2018 and the
U.S. government shutdown combined to stymie deal activity. The
March IPOs of Lyft ($2.3 billion) and jeans maker Levi Strauss
 LEVI.N  ($623 million) accounted for 63 percent of the overall
proceeds raised.
    But Renaissance says the IPO pipeline now contains 73
aspirants looking to raise about $17 billion, setting the stage
for a "robust" second quarter and beyond. The research firm
cites potential billion-dollar offerings from image-sharing
website owner Pinterest  PINS.O , and Lyft's larger rival Uber
Technologies, as companies that could launch deals soon. 
    Pinterest is in position to go public this month
 urn:newsml:reuters.com:*:nL3N21946E, while Uber plans to kick off its IPO in April,
sources told Reuters  urn:newsml:reuters.com:*:nL1N2111HG
    Although the overall market environment remains conducive to
new listings with equities trading near record highs amid
subdued volatility, Lyft's weakness will likely prompt the
buyside to proceed with caution.
    That said, there are three IPOs scheduled to price
Wednesday: Electronic trading platform Tradeweb Markets  TW.O 
(~$700 mln) is the biggest on file https://www.sec.gov/Archives/edgar/data/1758730/000114420419015706/tv515721_s1a.htm,
 along with NGM Biopharmaceuticals  NGM.O  (~$100 mln) and
medical device company Silk Road Medical  SILK.O  ($75 mln).
    And next week's docket so far features three technology
hopefuls: German e-commerce firm Jumia Technologies, SaaS
company PagerDuty and Israeli cybersecurity company Tufin
Software Technologies.
    Below is a Renaissance Capital chart showing U.S. IPO
quarterly activity since 2007:
    
 
 
     (Lance Tupper)
    *****
        
    RETAIL SALES DROPS UNEXPECTEDLY IN FEBRUARY (1128 EDT/1528
GMT)
    U.S. retail sales dropped by 0.2 percent in February, a rude
surprise to analysts who expected a 0.3 percent increase.
 urn:newsml:reuters.com:*:nL1N21G1N0
    The underwhelming report from the Commerce Department
 USRSL=ECI  joins a host of recent disappointing data pointing
to a slowdown in economic growth and further justifying the
Federal Reserve's decision to end its monetary tightening
policy.
    And, as consumer spending accounts for about two-thirds of
the U.S. economy, weak retail sales could hit GDP.
    However, the weak February data - which could reflect delays
in processing tax refunds and cold, wet weather - was at least
partly offset by upward revisions to January's numbers.
    In a note, Barclays Research analyst Pooja Sriram writes
that the January-February offset was significant enough that the
bank's first quarter GDP tracking remains unchanged at 1.7
percent.
    Growth estimates for the January-March quarter are as low as
a 0.8 percent annualized rate. 
    Stripping out autos, gasoline, building materials and food
services, retail sales fell 0.2 percent in February. This
so-called core retail sales tracks closest with the consumer
spending component of GDP.      
 
    (Stephen Culp)
    *****
    
    LOOKING GOLDEN (1050 EDT/1450 GMT)
    The S&P 500's  .SPX  gains on Monday triggered a bullish
technical signal that could mean more room to run.
    The 50-day moving average for the benchmark index crossed
above its 200-day, a signal known as the "golden cross". It was
the first time the S&P 500 triggered the pattern since April
2016, and follows the Dow Jones Industrial Average  .DJI , which
reached its golden moment late last month.  urn:newsml:reuters.com:*:nL3N21J3DM
 urn:newsml:reuters.com:*:nL1N2160PM
    "The S&P is about to create its Golden Cross today and you
know what that means psychologically," Ken Polcari, managing
principal at Butcher Joseph Asset Management, said in his
morning note.
    Sam Stovall, chief investment strategist at CFRA, looked at
historical golden crosses in a recent note. He found that a
"golden cross strategy" using the S&P 500 "delivered worthwhile
returns for those investors desiring exposure to the broader
market."
    Look below for Monday's golden cross:
            
 
 
 
    (Lewis Krauskopf)
    *****    
    
    THE IMPORTANCE OF CHINA NOT BREAKING (944 EDT/1344 EST)
    Stocks are climbing in Monday morning trading and the
catalyst looks to be survey results showing factory activity in
China unexpectedly grew for the first time in four months in
March.  urn:newsml:reuters.com:*:nL3N21G1EH
    Chetan Ahya, Morgan Stanley's chief economist and global
head of economics, has a note out putting in context the
importance of China, the world's second largest economy.
    "China’s outlook is critical to the prospects and magnitude
of a global recovery for one simple reason – China has been the
key source of global demand weakness over the past 6-9 months,"
Ahya writes.
    Noting that China has announced $250 billion in stimulus,
Ahya also says the confidence in China recovery stems from the
fact that policy makers are also seeking to ensure labor market
stability.
    "We expect China’s growth data, on an aggregate basis, to
stabilize in March-April before improving," Ahya writes.
    Looking ahead, Ahya recommends focusing on the country's
trade data and other activity indicators such as infrastructure
fixed-asset investment spending and auto sales, in addition to
PMI data.
    (Lewis Krauskopf)
    *****
    
    FUTURES RISING AFTER CHINA SURPRISE (0853 EDT/1253 GMT) 
    Stock index futures are sharply higher in Monday premarket
trading, set to kick off April on a positive note for the market
after the S&P 500  .SPX  tallied its biggest quarterly
percentage rise since 2009.  urn:newsml:reuters.com:*:nL1N21G1WD
    U.S. strength followed solid gains in Asia and Europe.
Markets appeared to be seizing on a surprise rise in factory
activity in China.  urn:newsml:reuters.com:*:nL3N21G1EH
    Not all the economic news was rosy.  Factory activity
remained weak around the world last month, while  U.S. retail
sales unexpectedly fell in February.  urn:newsml:reuters.com:*:nL3N21J26A  urn:newsml:reuters.com:*:nLNS1FEF14
    Here is the premarket snapshot:
    
 
 
 
    (Lewis Krauskopf)
    *****
    
        
    
    


    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
futures snapshot     https://tmsnrt.rs/2V5RyAM
"Golden cross" triggered    https://tmsnrt.rs/2HQDB6I
Core retail sales and GDP Image    https://tmsnrt.rs/2WCuIAU
US IPO count Q1 2019     https://tmsnrt.rs/2Vb0oNE
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>