Recent IPOs Just Had a Historic Week
If the last 11 months in the market has taught investors anything, it’s that rising interest rates can drag on high-multiple growth stocks. That was especially true for recent initial public offerings, but things might be changing.
This chart shows the Renaissance IPO ETF with weekly candles. It has the rate of change indicator set to one-period intervals, making it show simple 1-week changes.
Did you know that last week featured the biggest gain since IPO launched in October 2013?
In isolation, that’s an interesting bit of trivia. It might get more interesting when you consider a few more points.
First, we’re approaching a new quarter and a new half. Big institutional investors often reallocate around these times. Will they return to IPOs after a 54 percent pullback from the 52-week highs?
Second, “growth” stocks have tried to pull ahead of “value” for the first time since last July. Check out this daily chart comparing the iShares Russell 1000 Growth ETF against the iShares Russell 1000 Value ETF:
Third, the shift away from growth mostly resulted from higher oil prices, higher inflation and higher interest rates. But those trends may have also stalled after energy stocks tanked and the 10-year Treasury yield failed to hold an 11-year high.
Overall, the Fed’s hiking cycle isn’t done and inflation remains a problem. But last week the market showed signs of looking past those challenges – at least for now.
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This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
This chart shows the Renaissance IPO ETF with weekly candles. It has the rate of change indicator set to one-period intervals, making it show simple 1-week changes.
Did you know that last week featured the biggest gain since IPO launched in October 2013?
In isolation, that’s an interesting bit of trivia. It might get more interesting when you consider a few more points.
First, we’re approaching a new quarter and a new half. Big institutional investors often reallocate around these times. Will they return to IPOs after a 54 percent pullback from the 52-week highs?
Second, “growth” stocks have tried to pull ahead of “value” for the first time since last July. Check out this daily chart comparing the iShares Russell 1000 Growth ETF against the iShares Russell 1000 Value ETF:
Third, the shift away from growth mostly resulted from higher oil prices, higher inflation and higher interest rates. But those trends may have also stalled after energy stocks tanked and the 10-year Treasury yield failed to hold an 11-year high.
Overall, the Fed’s hiking cycle isn’t done and inflation remains a problem. But last week the market showed signs of looking past those challenges – at least for now.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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