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Stock information is displayed on a monitor at Nasdaq's office in Times Square. Photo: Drew Angerer/Getty Images
Multibillion-dollar stock market debuts from companies like Zoom, Uber and Pinterest have grabbed headlines in 2019 with eye-popping numbers, but new data shows IPO activity actually declined significantly this year, globally and in the U.S.
What's happening: Capital raised for both domestic and cross-border IPOs fell by 37% year-over-year, with volume down 34%, multinational law firm Baker McKenzie reports.
On the other hand: While 2019 has hardly been the best of times, Tom Rice, partner at Baker McKenzie, expects the second half of the year to show "some rays of light."
What's next? With those disruptions now in the rear-view mirror, Rice is confident the IPO market has strong momentum heading into the second half of the year, especially with the S&P 500 again nearing all-time highs and recent IPOs from companies like Fiverr, Beyond Meat and Chewy riding waves of bullish investor sentiment.
Watch this space: The one part of the world for which Rice does not have high hopes this year is Europe, where business remains paralyzed because of Brexit and the deteriorating economic environment.
Baker McKenzie notes that by the second quarter of 2019, domestic IPO transactions increased 13% from the first quarter and cross-border IPO listings increased by 7%.
As part of its merger with Raytheon, United Technologies expects to move its headquarters to the Boston area and out of Connecticut, the state it has called home for nearly a century.
Why it matters: A new research paper from the right-leaning Yankee Institute says it's just the latest piece of evidence that the mix of higher taxes and "economic development incentives" don't work.
What they're saying:
What happened: Bates and Gius' study finds that the combination of higher taxes and development grants ended up costing Connecticut taxpayers $35 million.
Total research and development spending in the U.S. last year totaled $608 billion, according to data from the Federal Reserve, while corporations in the S&P 500 spent $806 billion buying back their own stock. The total for all companies was well over $1 trillion.
What it means: In 2018, the 500 biggest U.S. companies spent 33% more on their stock buyback programs than the country is investing in research and development.
Bank of America-Merrill Lynch latest fund manager survey shows investors are flying to safety.
What's happening: Professional investors' stock holdings saw the second-largest one-month drop on record, and the lowest investor allocation to equities since March 2009, while cash holdings jumped by the most since the 2011 debt-ceiling crisis.
The bottom line: Safe-haven U.S. Treasuries, considered the risk-free asset, have become the "most-crowded trade" among BAML's surveyed managers, with 27% of those surveyed buying.
European Central Bank President Mario Draghi signaled that more stimulus is coming for the eurozone in a speech Tuesday morning. The new measures are likely to include the central bank lowering interest rates below the current -0.4% interest rate that already means some depositors pay the ECB to loan it money.
Interestingly, yields on 10-year French government bonds fell below 0 for the first time ever, and yields turned negative for 10-year government bonds in eurozone members Austria and the Netherlands.
More interesting, bonds are turning negative for European countries that aren't even overseen by the ECB.
What to watch: "It is important to remember that Draghi is on the way out as his term as bank President ends this fall, so it is not clear that he will preside over additional cuts before he is done," DRW Trading market strategist Lou Brien wrote in a note to clients, "but he has indeed thrown down the gauntlet to his successor, who may or may not appreciate it."