Is the US IPO market coming back to life?
Instacart sold 22 million shares at $30 each in an initial public offering on Monday, raising $423 million in the process. The offering, which values the grocery delivery company at around $10 billion, is the second high-profile IPO in a matter of days, after British chipmaker Arm had made its trading debut on the Nasdaq stock exchange last Thursday. With Klaviyo, a marketing automation company, also planning to raise up to $550 million in its initial public offering on Tuesday, this week is a clear sign of life from the U.S. IPO market, which had dried up completely in 2022 after a record-breaking 2021. According to Dealogic data analysed by EY, IPO activity already picked up slightly in the first half of the year, as companies raised $10.1 billion in 63 initial public offerings in the U.S., compared to $4.7 billion in 51 IPOs in the first six months of 2022. With inflation looking likely to have peaked, rate hikes nearing an end and equities having rebounded from last year’s lows, the market backdrop looks more positive now that it did at any time in the past 18 months. Source: Statista
From October onwards, US consumers face a double whammy: student loans + auto loans...
Suspended Student loan payments helped fuel the auto market over the last several years. Auto loans pass Student loans in consumer debt load for the first time in 13yrs, which means consumers face a double-whammy starting in October w/existing auto payments & resumed student loan obligations. Auto loan delinquencies are on the rise and more consumers could fall behind if unemployment increases. Source: Bloomberg, HolgerZ
In the US, the slow motion bank run continue...
Interest Rates on Deposits, by Bank: 1. Wells Fargo: 0.15% 2. Citibank: 0.05% 3. Chase: 0.01% 4. Bank of America: 0.01% 5. US Bank: 0.01% Rates on Alternatives to Bank Deposits: 1. CDs: 5.0% 2. Money Market: 4.5% 3. Treasury Bonds: 4.0% Deposits continue to flow out of banks at a historic pace with $1 trillion+ withdrawn over the last year. The era of "free" money for large US banks is coming to an end. They must raise interest paid on deposits or capital will continue to leave. Source: The Kobeissi Letter, Apollo
Valuation premium of US tech stocks vs. rest of the world is going beyond parabolic...
Source: Topdowncharts, TME
It is official? Total US Debt surpasses $33 trillion for the first time. For those keeping tabs, the US added $1 trillion in debt in just 3 months
Cartoon: Gary Varvel
Corporate profit margins jump to highest level in 73 years 👀
Source: Bloomberg, Barchart
The 10 largest companies in the S&P 500 now make up 34% of the index with an average P/E ratio of 50x
This is the highest percentage since 2001 during the Dot-com bubble. Even in the 2008 bubble, this percentage peaked at ~26%. These same 10 companies have accounted for ~80% of the Nasdaq's entire rally this year. Markets are increasingly held up by a few stocks, particularly in the technology sector. Source: The Kobeissi Letter, Apollo
America's finance in one chart
Source: Michel A.Arouet
