Live Markets: Bumble rumbles, IPOs stay hot
11/02/2021 19:17
* Dow, S&P 500 modestly red, Nasdaq flat
* Energy weakest major S&P sector; tech sole gainer
* Dollar flat; gold, crude slip
* U.S. 10-Year Treasury yield ~1.16%
Feb 11 - 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 RUMBLES, IPOS STAY HOT (1400 EST/1900 GMT)
Another day, another batch of IPOs pop.
Bumble Inc BMBL.O on Thursday opens 77% above its $43 IPO
price, valuing the online dating app operator backed by
Blackstone BX.N at $14 billion. urn:newsml:reuters.com:*:nL4N2KH2UC
Joining the new-issue euphoria, in-home healthcare services
firm Signify Health Inc SGFY.N leaps over 33% in its debut,
urn:newsml:reuters.com:*:nL4N2KH2RX, and home healthcare company Apria Inc APR.O
(also Blackstone backed) jumps. urn:newsml:reuters.com:*:nL4N2KH2UT
Medical device maker Bioventus Inc's BVS.O stock is
currently up nearly 50%, urn:newsml:reuters.com:*:nL4N2KH2TF, while even shares of
mortgage lender loanDepot LDI.N , which took a huge haircut
after delaying its deal by a week, rise on Thursday.
urn:newsml:reuters.com:*:nL4N2KH2SL
So far, of the roughly 50 traditional IPOs (aside from
SPACs, or special purpose acquisition companies) that have
priced this year, only about a handful are trading below issue
price. For comparison sake, the Renaissance IPO ETF IPO.P ,
which tracks recent IPOs, is up 18% year-to-date vs the S&P 500
index's .SPX 4% advance and the Nasdaq's .IXIC approximate
9% gain.
The frenetic pace of traditional IPOs, however, will likely
cool off for a while. This as 2020 September-quarter financials,
which aspirants have been using to market their offerings, go
stale in a few days.
(Lance Tupper)
*****
GOOD RIDDANCE TO THE YEAR OF THE RAT (1350 EST/1850 GMT)
“Bulls make money, bears make money, and pigs get
slaughtered,” is an old Wall Street saying.
Meanwhile, LPL Financial Research has put out a piece
mentioning that the Chinese New Year (often called the Lunar New
Year) will kick off Friday, February 12, and with it, will begin
the Year of the Ox.
Although LPL says that they would never suggest investing
based on zodiac signs, it is important to note that the Year of
the Ox has historically been quite strong for equities.
Not to mention, we are waving goodbye to the year of the
Rat, to which LPL says "good riddance." Of note, the last two
years of the Rat were 2008 and 2020, which included some pretty
rough sledding along the way.
Since the Chinese New Year typically starts between
late-January and mid-February, LPL looked at the 12-month return
of the S&P 500 Index .SPX starting at the end of January
dating back to 1950.
Low and behold, wouldn’t you know it? According to LPL, the
Year of the Ox has been up more than 13% on average (with a
median advance of nearly 18%); suggesting "bulls are smiling
indeed!"
“The year of the Ox is the second of the 12 animal signs of
the Chinese zodiac, and the Ox is considered a symbol of
diligence, persistence, and honesty. Equity returns indeed are
quite persistent during the Ox, as it is the third best return
out of the 12 Zodiac signs,” explained LPL Chief Market
Strategist Ryan Detrick.
For those keeping track, of all the 12 Zodiac signs, LPL
says the that historically, the best have been the Goat, Tiger,
and Ox, while the Rooster and Snake have been the worst.
(Terence Gabriel)
*****
GAMESTOP ASIDE, SHORT INTEREST WANES (1233 EST/1733 GMT)
GameStop GME.N and other stocks with heavy short positions
have taken center stage in recent weeks, as amateur investors
have targeted them to squeeze them and drive up their prices.
That said, the number of GameStop shares shorted has fallen
dramatically since last month.
And overall, short interest is falling. In the latest data,
as of Jan. 29, short interest on the New York Stock Exchange
fell to 12.931 billion shares, compared with 13.716 billion
shares as of Jan. 15. On Nasdaq, short interest fell to 9.407
billion shares as of Jan. 29, compared with 10.019 billion
shares as of Jan. 15. urn:newsml:reuters.com:*:nAQN03S7P5 urn:newsml:reuters.com:*:nFWN2KG125
NYSE short interest has fallen to a "historic low,"
according to EPFR. The firm calculates that the current number
of total shares is the lowest since it started tracking monthly
short interest in September 2008.
EPFR also notes in a report that the percentage decline in
NYSE short interest was the biggest since the pandemic struck in
March.
The lack of short interest could hold the market back. As
EPFR says, "a lower volume of short interest means that there is
less fuel for a future market rally if short sellers are forced
to cover their short positions."
(Lewis Krauskopf)
*****
PAYMENT STOCKS SOAR WITH CRYPTO IN THE AIR (1107 EST/1607
GMT)
Shares of payment processing companies were some of the
biggest boosts for the S&P 500 .SPX on Thursday with investors
betting that cryptocurrencies could bring new business.
Ahead of its investor conference, which starts at 11:30 AM
EST (1630 GMT), Paypal PYPL.O is leading the charge with a
gain of around 5.0%.
Mastercard MA.N , up about 3%, was the next biggest boost
after it announced on Wednesday it was planning to offer support
for some cryptocurrencies on its network this year, joining a
string of big-ticket firms that have pledged similar support.
urn:newsml:reuters.com:*:nL4N2KG4NU
Visa V.N is up around 2%.
"There's just a huge appetite for anything crypto right
now," said R.J. Grant head of trading at Keefe, Bruyette & Woods
in New York. "There's excitement in payment processing industry
about crypto becoming more mainstream."
"The institutional appetite is very strong for companies
allowing the mainstreaming of digital assets," said Grant whose
firm specializes in the financial sector.
While Grant said it was not clear how much an acceptance of
cryptocurrency would add to these companies top or bottom lines
he said: "I'm sure being an early mover would be positive for
business. I just don't know how to quantify it."
Also Bank of NY Mellon BK.N , up 2.0%, joined the rush by
top-tier financial services firms to bet on digital currencies
such as bitcoin on Thursday, saying it had formed a new unit to
help clients hold, transfer and issue digital assets.
urn:newsml:reuters.com:*:nL4N2KH24F
(Sinéad Carew)
*****
ART, VINTAGE CARS, EXPENSIVE WATCHES AND BITCOIN (1018
EST/1518 GMT)
What do they have in common?
Well, they are all assets Commerzbank Research doesn't offer
regular comments on.
"Commerzbank Research does not consider it to be its
responsibility to comment on the price development of purely
speculative investments or to predict it", analysts Ulrich
Leuchtmann and Thu Lan Nguyen wrote in a note of over 3,000
words dedicated to the crypto currency.
"We do not offer this service for other forms of speculative
investments such as works of art, vintage cars or expensive
watches", they add.
The analysts believe that "as bitcoin lacks the function of
a store of value it cannot be used as money in the conventional
sense".
Moreover, "there is considerable doubt whether bitcoin will
be broadly acceptable as a means of transaction medium- to
long-term", they add.
The note comes as bitcoin just soared past the $48,000 bar
after Bank of NY Mellon said it had formed a new unit to help
clients hold, transfer and issue bitcoin and other crypto
currencies. Uber Technologies CEO Dara Khosrowshahi also said
the firm could potentially accept bitcoin payments.
The frenzy surrounding the digital currency accelerated
recently when Elon Musk's Tesla revealed it had bought $1.5
billion worth of the cryptocurrency and would soon accept it as
a form of payment for its cars.
(Julien Ponthus and Karin Strohecker)
*****
GRIM JOBLESS CLAIMS DATA TURNS UP STIMULUS HEAT (1007
EST/1507 GMT)
Jobless claims data released on Thursday added urgency to
U.S. Federal Reserve Chairman Jerome Powell's appeal for a broad
national effort to help Americans get back to work and
emphasized the need for more stimulus from Washington.
The number of American workers filing first-time
applications for unemployment benefits USJOB=ECI inched lower
last week to 793,000 from the previous week's upwardly-revised
812,000, according to the Labor Department. urn:newsml:reuters.com:*:nL1N2KG2QQ
The number was 36,000 above consensus, and supports Powell's
acknowledgement on Wednesday that "improvement in labor market
conditions stalled" as new cases of COVID-19 surged and fresh
shutdowns were re-imposed to contain its spread. urn:newsml:reuters.com:*:nL1N2KG2IN
To provide context, initial jobless claims have remained
above 665,000 - the worst reading from the darkest days of the
Great Recession - for almost one year.
That number is higher than the estimated 2019 population of
Portland, Oregon - 654,741 - according to the Census Bureau.
Ongoing claims USJOBN=ECI , reported on a one-week lag,
edged down to 4.545 million.
The U.S. economy haemorrhaged 22.2 million jobs in
March-April 2020. Of those, nearly 10 million have yet to
return, with lower-paying, customer-facing services jobs
suffering the cruellest hit.
But many analysts see brighter days ahead.
"With Covid cases and hospitalizations plummeting, the
economy is now starting to re-open, albeit very slowly and
patchily, but the direction of travel is clear," writes Ian
Shepherdson, chief economist at Pantheon Macroeconomics.
"The seasonal patterns suggest that claims likely dip only
slightly over the next few weeks," Shepherdson adds. "But the
dominant force as the spring arrives will be the fading of Covid
and the reopening."
Market participants chose to take the gloomy claims data as
a sign that the sense of urgency regarding the passage of
President Joe Biden's $1.9 trillion fiscal aid package could
make the stimulus a reality sooner rather than later.
All three major U.S. stock indexes are slightly green, with
tech shares underpinning the Nasdaq.
(Stephen Culp)
*****
DOW INDUSTRIALS: AT A TIPPING POINT? (0900 EST/1400 GMT)
Although the Dow Jones Industrial Average .DJI has made
fresh record highs this week, it finds itself trapped in a
relatively narrow space defined by weekly log-scale trendlines
from early and late 2018:
Indeed, the blue-chip average is attempting its second
weekly close above a resistance line from early 2018. The Dow
managed one marginal weekly close above this line in early
January, only to struggle in its immediate aftermath. This line
now resides around 31,115.
On the upside, another resistance line, from late 2018, is
now a hurdle at around 31,675. The Dow's range this week so far
has been 31,191.20 to 31,511.44.
Meanwhile, weekly volatility close-to-close has risen from a
low of 7.30 in January to nearly 14. Of note, over the past 3
years, sell offs of varying degree have been preceded by
sub-13.00 readings. That said, with DJI strength over the past
week or so, this measure is suddenly less than forthright in its
rise.
Also of note, the weekly MACD is also trapped between two
important levels. It has so far stalled at its early 2018 high,
but is yet to break its signal line. Also of note the past 3
years, Dow tops formed amid a momentum divergence, and/or
intensified with a bearish MACD crossover. urn:newsml:reuters.com:*:nL1N2KG1BM
Thus, a Dow breakout of the range defined by the trendlines,
coupled with confirming turns in volatility and momentum studies
may tip the blue-chip average toward its next more sustained
thrust, one way or the other. urn:newsml:reuters.com:*:nL1N2KB1QH
(Terence Gabriel)
*****
FOR THURSDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EST/1400
GMT - CLICK HERE: urn:newsml:reuters.com:*:nL1N2KH1DN
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Dow02112021 https://tmsnrt.rs/3jCrQ3X
Jobless claims https://tmsnrt.rs/2Z4azap
Jobless claims and payrolls https://tmsnrt.rs/3qibkIY
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(Terence Gabriel and Lance Tupper are Reuters market analysts.
The views expressed are their own)