IPOs and antitrust

By Matthew Klein |  Wednesday, December 9 Delivering Growth. Investors are hungry for initial public offerings, with the prices of DoorDash and C3.ai stock soaring today after going public last night. DoorDash was up 86% by the close and is now worth more than $70 billion, while C3.ai was up 120%. Both companies are growing rapidly while bleeding money. With plenty of other IPOs coming up shortly—mostly notably, Airbnb—it will be interesting to see just how much demand there is for growth stocks. It’s an especially interesting question considering that the broader market was down, with the S&P 500 large-cap index and the Russell 2000 small-cap index both down 0.8%, while the tech-heavy Nasdaq Composite lost 1.9%. The majority of S&P stocks were down, as were 8 of 11 sectors. Yet industrials, energy, and materials stocks were up slightly, as were U.S. Treasury yields and the prices of copper and Brent crude oil—and all of those moves are consistent with an optimistic bet on economic growth. Similarly, Asian and European stock indexes were all up, while gold and silver were down. The cyclical tilt was reflected in the stock market’s biggest winners. Among the top gainers—excluding the newcomers—were Lowe’s, General Electric, AutoZone, Masco, Advance Auto Parts, Weyerhaeuser, Pentair, A.O. Smith, NVR, Diamondback Energy, and Capital One.   The losers, meanwhile, were concentrated in semiconductors and enterprise software, although it’s worth noting that some pandemic-sensitive stocks were also among the hardest hit, particularly Carnival, Norwegian, and Southwest Airlines. There wasn’t much economic, political, or pandemic-related news to justify these sorts of moves. For example, the Bureau of Labor Statistics did report another encouraging uptick in the number of private-sector job openings in October, although this was partly offset by a slight rise in the number of layoffs. The Census Bureau found that wholesalers’ sales and inventories continued to recover in October. And that’s about it. There was one big piece of market-moving news today—but we’ll cover that more below.

 

DJIA: -0.35% to 30,068.81 S&P 500: -0.79% to 3,672.82 Nasdaq: -1.94% to 12,338.95 The Hot Stock: Nielsen Holdings +9.1% The Biggest Loser: Qorvo -5.6% Best Sectors: Energy and Industrials +0.2% Worst Sector: Technology -1.9%