|Dow||-6.84 to 18,105.77|
|S&P 500||-1.64 to 2,104.99|
|Nasdaq||-3.23 to 5,007.79|
|10-YR Yield||-.022 to 1.878%|
|Gold||-$2.50 to $1,198.80|
|Crude Oil||+$0.15 to $56.54|
Party City. Virtu. Etsy. It’s an IPO extravaganza today on Wall Street!
The party supply retailer Party City raised $372 million in an initial public offering, and it’s now trading under the ticker symbol PRTY. The computerized trading firm Virtu raised more than $300 million in its IPO, and it’s now trading as VIRT. And the handmade gift and craft site Etsy raised $267 million. You can now trade its shares under the ticker ETSY.
It comes after a slow start to the year for public offerings — only 34 deals raising $5.4 billion were concluded in the first quarter. That compares with 64 deals worth $10.6 billion in the same period of 2014. Renaissance Capital is an IPO-focused firm, and it characterized Q1 as the slowest in two years.
|GoDaddy raised $460 million in its IPO.|
That doesn’t mean we haven’t seen some high-profile, well-known companies go public. Shake Shack (SHAK, Weiss Ratings: Not rated) is an extremely visible burger joint, and it raised $105 million in an IPO at the end of January. The GoDaddy (GDDY, Weiss Ratings: Not rated) Internet registration company went public in a $460 million deal at the beginning of this month. Anyone who has watched a Super Bowl in the past several years knows them!
But a robust private fundraising market has made it possible for many companies to delay hitting up the public markets for capital. The sideways chop in stocks overall has dissuaded others from attempting IPOs. We’ll need to see a stronger stock market tone overall to really get activity going, even as busy days like today occasionally pop up.
|“Many companies that are already public continue to retire shares via generous buyback programs.”|
At the same time, many companies that are already public continue to retire shares via generous buyback programs. Companies have bought back a whopping $4 trillion worth of their own shares in the past decade, and General Electric (GE, Weiss Ratings: B) just launched the biggest program ever at $50 billion.
That combination of lackluster IPO volume — and extreme buyback activity — should help support markets, all else being equal. It’s simple supply and demand: Fewer new shares are hitting the public markets, even as more old shares are leaving them.
Do you tend to agree? Is the stock market going to keep rallying because of supply and demand for shares? Or are other factors going to derail the move? What do you think about the latest crop of IPOs? Do you plan to buy any of these stocks or not, and why? Share your opinions over at the Money and Markets website when you have a sec.
|Our Readers Speak|
Politics. Energy. Oil stocks. Those were the topics of the day over at the website.
Reader Chuck B. added the following on the 2016 election field: “Hillary — and Bill — show a certain amount of political intelligence. It doesn’t take much to play to the lowest common denominator. Even Obama has shown a bit more than that, to give him a smidge of credit.
“Apparently these are the best the Democrats can do anymore. Not that the Republicans look all that much better, Rand Paul excepted, but I don’t give him much chance.”
Meanwhile, Reader Fred1 offered a skeptical take on the energy markets. He said: “I wouldn’t get too giddy over oil’s apparent recovery. The charts show a downturn coming at some point not too distant from now. So enjoy it while you can … I think what we have now is just a temporary rally responding to what was an oversold condition.”
But Reader H.C.B. pointed out that bargain hunting can pay off handsomely, noting the big gains he’s racked up in the American Depository Receipts of Russia’s Gazprom (OGZPY) energy company. They went from the mid-$4s in January to around $6 now, helping him earn a handsome return. The lesson?
“If I listened to the pundits or even President Obama, I would not have invested in Russia at all. To me, it’s not quite worth selling-out at this time, but still, it’s pretty easy money — except for the taxes. Just follow the adage: Invest when others are fearful and sell when they are otherwise.”
Also on the oil topic, Reader David C. said: “The unusual aspect of the past few months has been the effect of the refinery strikes in the U.S. The significant reduction in refinery activity has meant that the crude inventory has been artificially ramped up, although the basic demand for oil products has not slumped.
“It didn’t take an Einstein to see, as I have noted on a number of website comment boxes, that this meant crude had almost nowhere to go for storage and hence became less valuable. However, as the U.S. refinery industry is now substantially getting back to work, the crude inventory is disappearing and the crude price is rising.”
Finally, regarding any allusion here to recommendations I’ve made in my paid services, you are welcome to contact our company to get more information about them at any time. Subscribers get real-time “buy” and “sell” signals, and they have access to the track record of each and every service. I’d love to have each and every one of you on board.
But I don’t share recommendations that loyal subscribers and clients pay for on a public website. That wouldn’t be fair to them. It also wouldn’t be fair to me or my co-workers, because we spend countless hours each and every day to deliver the absolute best independent insights, guidance, and recommendations we can.
And frankly, it wouldn’t really be a smart business move, would it? If you know of a grocery store with a sign that reads “Free food inside — take all you want!” be sure to let me know. I’d love to “shop” there … for the five minutes or so before they went broke.
Hope that clears things up! Please do continue to weigh in with your thoughts on energy, politics, or anything else at the website.
|Other Developments of the Day|
On the economic front, jobless claims rose 12,000 to a greater-than-expected 294,000 in the most recent week. Meanwhile, housing starts rose 2 percent to 926,000 at a seasonally adjusted annual rate in March. But that was well below the 1.04 million starts that economists expected, and building permit issuance dipped.
If it’s a day that ends in “Y,” there must be another leak about Greece’s desperate finances. Today is no different. The Financial Times reported that Greek officials informally requested a delay in their next payment to the International Monetary Fund (IMF). The recent request raised speculation in the market that the country is even closer to defaulting on its debts, sending Greek bond yields higher.
OPEC is now joining me in forecasting a decline in U.S. oil supplies, according to the Wall Street Journal. The oil cartel forecast that supply would top out around 13.65 million barrels this quarter, then start falling off in the rest of 2015. Declining rig activity and reduced capital expenditures by major oil producing companies will drive the declines.
Will the wreckage of Malaysia Airlines flight MH370 ever be found? Nobody knows, but officials are planning to double the search area in the Indian Ocean if they need to. The current search will wrap up by May, and if nothing is found by then, ships will start scouring an additional 23,000 square miles of ocean.
Yesterday was an odd day. European Central Bank head Mario Draghi got “glitter bombed” during his post-meeting press conference. And a 61-year-old mailman from my home state of Florida, Doug Hughes, flew a super-light gyrocopter to the west lawn outside of the U.S. Capitol. He plunked it down there as part of a plan to deliver letters pushing campaign finance reform to members of Congress.
Want to share your thoughts on these developments? Then make sure you head over to the website today!
Until next time,