prev

U.S. IPOs: Class of 2013

Takeaway: Today's Chart of the Day highlights the deal and performance metrics for the current freshman class of a resurgent, domestic IPO market

This note was originally published November 26, 2013 at 13:23 in Macro

With animal spirits kindled and speculative appetites wetted in 2013 alongside bullish price momentum and higher all-time highs in equities, the domestic IPO market has been resurgent.  

 

U.S. IPOs: Class of 2013 - ipocartoon

 

Together with the positive price action, the macro backdrop has been favorable for shares coming to market as volatility spikes have been transient, equity fund flows have been positive and persistent and the trend in consumer and CEO confidence (pre-Gov’t shutdown) has been decidedly positive YTD.   

 

In the summary table below we highlight the deal and performance metrics for the 2013 class of U.S. IPO’s.  Both transaction volume and proceeds have accelerated in the YTD as deal pricing has been solid with positive, subsequent absolute and market adjusted performance for the preponderance of new issues. 

 

Strong returns for household names, FB and TWTR, which are currently +18% and +50% above offer, respectively, have helped invigorate retail involvement and will likely  continue to support individual interest in the (still) pregnant pipeline of forthcoming VC and PE backed offloads.    

 

Our GLL team expects the next high profile IPO, Hilton hotels, to price before year end and will be doing a pre-IPO blackbook and conference call in the next couple weeks to detail their investment view on the offering.  Please contact sales@hedgeye.com if you are interested in that call. 

 

At present, the environment remains favorable for extending the positive acceleration in new equity issuance and broader corporate activity/M&A, but speculative appetite (& confidence) anchors on last price.   

 

From a price signaling perspective, the TREND lines that matter are 1718 Support on the SPX and 14.29 Resistance on the VIX.

 

U.S. IPOs: Class of 2013 - drake1

 

For more information about Hedgeye research please click here.

 

Christian B. Drake

Associate 


Initial Claims: Very Strong

Takeaway: Our interest in claims is as a cycle-point referendum, a leading indicator on credit and lately as a harbinger of the long end of the curve.

Labor Leads the Long End of the Curve

Hurricane Sandy continues to distort the year-over-year trends in the labor market. As such, we are relying on the SA data as well as the 2-year comps on the NSA data. On both fronts, the data is very strong this week. The two-year comp shows claims down by 17.5%, which is the fastest rate of improvement in the last two months. On the seasonally-adjusted data, the headline print of 316,000 marks the third lowest print since the start of the Financial Crisis, and is only 8k shy of the low. By all accounts it would appear that the labor market continues to make steady progress in spite of the naysayers who'll tell you otherwise. Not only is an improving labor market conducive to lower credit costs for Financials, but it also exerts upward pressure on the long end of the yield curve. We showed recently just how correlated the banks are with the 10-year treasury yield, so now you've got both labor and spreads working in tandem to push bank stocks higher.

Nuts & Bolts

Prior to revision, initial jobless claims fell 7,000 to 316,000 from 323,000 week-over-week (WoW), as the prior week's number was revised up by 3,000 to 326,000.

 

The headline (unrevised) number shows claims were lower by 10,000 WoW. Meanwhile, the 4-week rolling average of seasonally-adjusted claims fell -7.25k WoW to 331.75k.

 

The 4-week rolling average of non-seasonally adjusted (NSA) claims, which we normally consider a more accurate representation of the underlying labor market trend, was -13.6% lower year-over-year (YoY), which is a modest sequential slowdown versus the previous week's YoY change of -15.1%

 

Initial Claims: Very Strong - stein1

 

Initial Claims: Very Strong - stein2

 

For more information on how you can subscribe to Hedgeye research please click here.


INITIAL CLAIMS: LABOR LEADING THE LONG END OF THE CURVE HIGHER

MACRO MEDLEY

The impact of the Government shutdown in October continues to manifest across reported, domestic macro data in November. 

 

This morning’s Durable and Capital Goods data for October reflected an expected retreat in New Orders with a slowdown across the various index aggregates while consumer confidence, universally, has remained in hangover mode through November after the discrete negative inflection into and through the latest iteration of congressional dystopia. 

 

Next week’s ISM data for November should provide a less noisy read on the trend in goods demand and manufacturing activity into year end.  Confidence data over the next six weeks, and whether we can break the current inertial downward trend, as we as we move increasingly past October's budget resolution and increasingly towards the next budget shutdown is of (obvious) import for year-end consumerism.     

 

Meanwhile, this morning’s real-time labor market data showed further strengthening as non-seasonally adjusted claims reflected steady improvement and headline claims printed its third best number since the start of the financial crisis. 

 

Below is the breakdown of this morning's claims data from the Hedgeye Financials team.  If you would like to setup a call with Josh or Jonathan or trial their research, please contact 

 

-Hedgeye Macro

 

INITIAL CLAIMS: LABOR LEADING THE LONG END OF THE CURVE HIGHER - Consumer Confidence

 

INITIAL CLAIMS: LABOR LEADING THE LONG END OF THE CURVE HIGHER - Durable Goods Oct

 

---------------------------------------------------------------------------------------------

 

Labor Leads the Long End of the Curve

Hurricane Sandy continues to distort the year-over-year trends in the labor market. As such, we are relying on the SA data as well as the 2-year comps on the NSA data. On both fronts, the data is very strong this week. The two-year comp shows claims down by 17.5%, which is the fastest rate of improvement in the last two months.

 

On the seasonally-adjusted data, the headline print of 316,000 marks the third lowest print since the start of the Financial Crisis, and is only 8k shy of the low.

 

By all accounts it would appear that the labor market continues to make steady progress in spite of the naysayers who'll tell you otherwise. Not only is an improving labor market conducive to lower credit costs for Financials, but it also exerts upward pressure on the long end of the yield curve.

 

We showed recently just how correlated the banks are with the 10-year treasury yield, so now you've got both labor and spreads working in tandem to push bank stocks higher. For more details, see our note from 11/22 "#Rates-Rising: A Current Look at Rate Sensitivity Across Financials" - please contact sales@hedgeye if you are interested in that research. 

 

Nuts & Bolts

Prior to revision, initial jobless claims fell 7k to 316k from 323k WoW, as the prior week's number was revised up by 3k to 326k.

 

The headline (unrevised) number shows claims were lower by 10k WoW. Meanwhile, the 4-week rolling average of seasonally-adjusted claims fell -7.25k WoW to 331.75k.

 

The 4-week rolling average of NSA claims, which we normally consider a more accurate representation of the underlying labor market trend, was -13.6% lower YoY, which is a modest sequential slowdown versus the previous week's YoY change of -15.1%

 

INITIAL CLAIMS: LABOR LEADING THE LONG END OF THE CURVE HIGHER - JS 1

 

INITIAL CLAIMS: LABOR LEADING THE LONG END OF THE CURVE HIGHER - JS 2

 

INITIAL CLAIMS: LABOR LEADING THE LONG END OF THE CURVE HIGHER - JS 3

 

INITIAL CLAIMS: LABOR LEADING THE LONG END OF THE CURVE HIGHER - JS 4

 

INITIAL CLAIMS: LABOR LEADING THE LONG END OF THE CURVE HIGHER - JS 5

 

INITIAL CLAIMS: LABOR LEADING THE LONG END OF THE CURVE HIGHER - JS 6

 

INITIAL CLAIMS: LABOR LEADING THE LONG END OF THE CURVE HIGHER - JS 7

 

INITIAL CLAIMS: LABOR LEADING THE LONG END OF THE CURVE HIGHER - JS 8

 

INITIAL CLAIMS: LABOR LEADING THE LONG END OF THE CURVE HIGHER - JS 9

 

INITIAL CLAIMS: LABOR LEADING THE LONG END OF THE CURVE HIGHER - JS 10

 

INITIAL CLAIMS: LABOR LEADING THE LONG END OF THE CURVE HIGHER - JS 11

 

INITIAL CLAIMS: LABOR LEADING THE LONG END OF THE CURVE HIGHER - JS 12

 

INITIAL CLAIMS: LABOR LEADING THE LONG END OF THE CURVE HIGHER - JS 13

 

Joshua Steiner, CFA

 

Jonathan Casteleyn, CFA, CMT

 

 


Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.64%
  • SHORT SIGNALS 78.61%

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER

Takeaway: Our interest in claims is as a cycle-point referendum, a leading indicator on credit and lately as a harbinger of the long end of the curve.

Labor Leads the Long End of the Curve

Hurricane Sandy continues to distort the year-over-year trends in the labor market. As such, we are relying on the SA data as well as the 2-year comps on the NSA data. On both fronts, the data is very strong this week. The two-year comp shows claims down by 17.5%, which is the fastest rate of improvement in the last two months. On the seasonally-adjusted data, the headline print of 316,000 marks the third lowest print since the start of the Financial Crisis, and is only 8k shy of the low. By all accounts it would appear that the labor market continues to make steady progress in spite of the naysayers who'll tell you otherwise. Not only is an improving labor market conducive to lower credit costs for Financials, but it also exerts upward pressure on the long end of the yield curve. We showed recently just how correlated the banks are with the 10-year treasury yield, so now you've got both labor and spreads working in tandem to push bank stocks higher. For more details, see our note from 11/22 "#Rates-Rising: A Current Look at Rate Sensitivity Across Financials", a link to which can be found here.

 

Nuts & Bolts

Prior to revision, initial jobless claims fell 7k to 316k from 323k WoW, as the prior week's number was revised up by 3k to 326k.

 

The headline (unrevised) number shows claims were lower by 10k WoW. Meanwhile, the 4-week rolling average of seasonally-adjusted claims fell -7.25k WoW to 331.75k.

 

The 4-week rolling average of NSA claims, which we normally consider a more accurate representation of the underlying labor market trend, was -13.6% lower YoY, which is a modest sequential slowdown versus the previous week's YoY change of -15.1%

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 1

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 2

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 3

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 4

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 5

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 6

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 7

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 8

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 9

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 10

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 11

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 12

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 13

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 19

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 14

 

Yield Spreads

The 2-10 spread rose 1 basis points WoW to 243 bps. 4Q13TD, the 2-10 spread is averaging 233 bps, which is lower by 1 bp relative to 3Q13.

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 15

 

INITIAL CLAIMS: STRONG DATA CONTINUES TO PUSH THE LONG END OF THE CURVE HIGHER - 16

 

 

Joshua Steiner, CFA

 

Jonathan Casteleyn, CFA, CMT

 


[Podcast] McCullough: The #NOTaper Trade Is On

Hedgeye CEO Keith McCullough delivers a Thanksgiving Eve morning macro call discussing the markets and economy with particular emphasis on the US Dollar, 10-Year Treasury and Gold.

 


get free cartoon of the day!

Start receiving Hedgeye's Cartoon of the Day, an exclusive and humourous take on the market and the economy, delivered every morning to your inbox

By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails.

next