The mood has shifted and balance sheets and profits seem to matter to equity investors again, as the recent debuts of large, money-losing companies have been punished by the market.

Driving the news: Shares of smart stationary bike company Peloton opened down 7% and closed 11% below their $29 IPO price to mark the third-worst performance for an IPO that raised more than $1 billion since the financial crisis, Bloomberg data showed.

• This is becoming a pattern.
• "While most of the 11 other companies that have gone public this month priced within or above their marketed range, the largest of them, SmileDirectClub is trading about 44% below its offer price in its $1.35 billion listing," Bloomberg notes.

Why it matters: As the U.S.-China trade war has intensified, triggering depressed economic data and heightened recession fears globally, investors have gotten more selective about what stocks they want to buy.

• Market leadership also has shifted from growth stocks to value plays as U.S. Treasury yields have plunged and investors seek out stocks that offer high dividends and have historically been less risky.

Between the lines: Peloton, like Lyft and Uber, is a company that loses more money as it grows.

• Company filings show Peloton lost $196 million on sales of $915 million during the 12 months ended June 30, after losing $48 million on $435 million in sales the prior year.

What they're saying: “We totally understand the sentiment today,” CFO Jill Woodworth told Bloomberg. “As I’ve seen over the last couple of decades, there’s always been different periods of time when people focus on growth and when people focus on profitability.”

• “It’s an interesting time in the markets,” CEO John Foley added. “There is anxiety. The markets are on edge.”

What they're not saying: Peloton may also be hurt by its dual-class share structure that gives certain owners, including its CEO, 20 votes for each share they own. Public investors only get 1 vote per share.

• In addition to being a tough pill for traders to swallow, the dual-class structure means the companies aren't listed in many index funds favored by passive investors, including the S&P 500 index.
• That's important as assets in U.S. index-based equity mutual funds and ETFs surpassed active stock funds for the first time ever this month.

The bottom line: The unimpressive market performance of Peloton, Lyft, Uber and SmileDirectClub has poured ice cold water on 2019's stock market IPO euphoria.

They may not turn a profit, but unprofitable companies are still bringing in giant sacks of cash from investors. Even with the recent shift in taste from the stock market, money-losing companies have managed to raise funding in their IPOs at the fastest pace since the dot-com bubble.

Crying to the bank: Despite a rocky first day on the Nasdaq, Peloton founder John Foley still earned himself $427 million, thanks to the money raised in the IPO. Tiger Global Management, which owns a 20% stake, made about a $1 billion return on its initial investment.

The big picture: Unprofitable companies overall are performing well in the stock market in 2019, thanks to the initial pops of Beyond Meat, Chewy, CrowdStrike Holdings and other high risers earlier in the year.

• New unprofitable company IPOs are on pace to outperform profitable ones (and beat the market) for the fifth straight year.

Marijuana advocates scored a big win Thursday with the passage of the SAFE Act through the U.S. House of Representatives, but the market was less enthusiastic.

What it means: The Secure and Fair Enforcement Banking Act would allow marijuana companies to more easily do business with federally insured banks in the U.S.

What happened: Marijuana stocks initially soared in after-hours trading Wednesday, with Aurora Cannabis gaining more than 5% and Canopy Growth jumping 4%, but those gains were short-lived.

• Canopy Growth's stock rose a paltry 0.42% on Thursday, while Aurora Cannabis' stock fell 0.24%, as the bill's fate in the Senate and a signature from President Trump looked uncertain.

The big picture: Matt Hawkins, managing principal at Cresco Capital Partners, told Fortune yesterday he expects to see a “heavy influx” of cannabis-related IPO registrations on the Nasdaq and NYSE because the bill would further solidify the viability of the U.S. marijuana industry.

• It raised nearly $13.8 billion in financing in 2018, according to industry advisory firm Viridian Capital Advisors, Fortune reported.
• Most investments stemmed from legalization in Canada and legislative changes at the state level in the U.S., which gave investors more confidence in backing pot companies.

Reality check: Pot stocks are in need of some good news. It's been almost all downhill since March after a world-beating rally to start the year.

• A popular marijuana industry ETF, ETFMG Alternative Harvest (MJ), is down more than 10% year to date and has fallen 30% this quarter.

U.S. economic growth is returning to around the 2% level that economists see as trend or the economy's neutral level, data shows.

By the numbers: Second quarter GDP was unrevised at 2% and estimates for the third and fourth quarters look to be around that level.

• The Atlanta Fed’s GDPNow model estimate for the third quarter is 1.9% growth, up from its last estimate of 1.8%, and the New York Fed’s Nowcast model is tracking Q3 at around 2.2%.

Fun fact: If the U.S. Latino population were an independent nation, it would be the 8th largest economy on earth, the third fastest growing economy in the world, and the fastest growing developed market economy, according to the 2019 U.S. Latino GDP Report.

• "U.S. Latinos account for nearly 30% of America's growth in real income," the study's authors found.

Pulled down by more loose monetary policy from the ECB and weak European growth data, the euro fell to its lowest level in 2 years against the dollar Thursday.

The intrigue: "The biggest story in the world right now is the whistle blower's complaint on President Trump but the biggest story in the forex market is the persistent decline in the euro," BK Asset Management managing director of FX strategy Kathy Lien wrote in a note to clients.

• The euro was one of the few currencies not to trade higher against the greenback yesterday, and has moved lower in 4 of the last 5 trading sessions, Lien noted.
• "Investors are worried that between the US and UK's troubles, Eurozone policy makers will need to step in with more action and the longer the Germans wait to announce fiscal stimulus, the more likely EUR/USD will hit 1.08."

With the liquidation announcement of U.K.-based tour operator Thomas Cook, the number of corporate defaults in 2019 now matches the total from all of 2018 and is set to exceed it, according to data from S&P Global Ratings.

• The total number of corporate defaults reached 82 with a little more than 3 months remaining in the year.

What they're saying: "The media and entertainment sector is the third-highest contributor to defaults so far in 2019, with eight, having surpassed its 2018 year-end total of six," said Sudeep Kesh, head of S&P Global credit markets research, in a release.

Of note: The number of defaults in Europe has topped its 2018 year-to-date tally, S&P said.