Second-Quarter IPO Activity Surges, Headlined by Uber’s Long-Awaited Debut

IPO activity rebounded from a slow first quarter to deliver the most active quarter in the number of pricings since 2014 and the most active quarter in proceeds since 2000.

Monday, July 15, 2019

All major U.S. indexes continued to gain in the second quarter, with the Dow Jones Industrial Average and S&P 500 posting their best first-half performance in 20 years. Despite escalating trade tensions between the United States and China and increasing fears of a global economic slowdown, stocks remained near record highs. This was driven largely by investors’ expectations that the Federal Reserve will cut interest rates—as soon as July—to sustain the current economic expansion.

For the second quarter, the S&P 500 gained 3.8%, outperforming the Nasdaq (+3.6%), Dow Jones Industrial Average (+2.6%), and the Russell 2000 small-cap index (+1.7%). S&P 500 second-quarter revenue is expected to grow 3.9% year-over-year, the lowest growth rate since 2016, while earnings are expected to decline 2.6% year-over-year, which would mark the first back-to-back quarters of earnings decline since 2016. S&P 500 share repurchases declined to $206 billion in the first quarter of 2019 from a record $223 billion in the fourth quarter of 2018. The decrease in buyback spending, which was likely driven by expectations for lower earnings, could limit liquidity and intensify the effects of a market sell-off.

Assets continue to flow from actively managed funds to passively managed funds and ETFs; active funds have already lost $90 billion this year compared to a $39 billion gain for passive funds. Passive funds now account for more than half of all market capital and passive and quantitative strategies account for 80% all trading activity.

Highlights include:

  • IPO market accelerates with multiple billion-dollar debuts
  • Filings nearly double from first-quarter levels
  • Follow-on and convertible debt offerings rebound
  • Outlook: robust pipeline should fuel third-quarter capital raising


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