IPO: Favorable Capital Markets In 2025 Not Yet A Tailwind (Rating Downgrade)

Nov. 17, 2024 12:13 PM ETRenaissance IPO ETF (IPO)
Mike Zaccardi, CFA, CMT profile picture
Mike Zaccardi, CFA, CMT
6.98K Followers
(6min)

Summary

  • The IPO market has been sluggish for almost three years due to elevated global yields and macroeconomic uncertainties, despite a peak in early 2021.
  • I am downgrading the Renaissance IPO ETF from a buy to a hold due to valuation concerns and mixed technical signals.
  • The ETF's high tech exposure and lack of large-cap stocks increase its cyclical risk, especially with rising market interest rates.
  • Seasonal trends suggest potential short-term weakness, but the long-term uptrend remains intact, warranting cautious optimism for future IPO waves.

IPO Initial Public Offering 3d concept

Olemedia

The IPO market has been cold for going on three years now. The number of global new issues peaked in early 2021, a time when interest rates were near rock bottom and risk appetite was sky-high. Conditions are different today. Global yields

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Mike Zaccardi, CFA, CMT profile picture
Mike Zaccardi, CFA, CMT
6.98K Followers
Freelance Financial Writer | Investments | Markets | Personal Finance | RetirementI create written content used in various formats including articles, blogs, emails, and social media for financial advisors and investment firms in a cost-efficient way. My passion is putting a narrative to financial data. Working with teams that include senior editors, investment strategists, marketing managers, data analysts, and executives, I contribute ideas to help make content relevant, accessible, and measurable. Having expertise in thematic investing, market events, client education, and compelling investment outlooks, I relate to everyday investors in a pithy way. I enjoy analyzing stock market sectors, ETFs, economic data, and broad market conditions, then producing snackable content for various audiences. Macro drivers of asset classes such as stocks, bonds, commodities, currencies, and crypto excite me. My thing is communicating finance with an educational and creative style. I also believe in producing evidence-based narratives using empirical data to drive home points. Charts are one of the many tools I leverage to tell a story in a simple but engaging way. I focus on SEO and specific style guides when appropriate.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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