1.IPO’s 2019-114 U.S. IPO Pricings-63 Positive Returns.

Follow up to my IPO comments from last week

Barrons

Amid the headlines about IPO disappointments, there is a broader takeaway: Investors have become more discriminating, and that’s good for everyone. “Everything has changed, and nothing has changed,” says Lise Buyer, founder of Class V Group, an IPO consulting firm. “Lately, there’s been lots of noise and fireworks, and hullabaloo about direct listings. But the No. 1 thing is that fundamentals have not changed. Institutional investors are pretty darned smart when looking at IPOs, regardless of structure and buzz. Investors will analyze the company, the prospects for the future, and the price at which they’re being offered the chance to invest. That has not changed as long as I’ve been in the business.”

IPO tracker IPOScoop.com counts 114 U.S. IPO pricings in 2019—63 have had positive returns.

IPOs Have Been Crushed in 2019. Why That’s Actually Good News for Stocks.

By Eric J. Savitz

https://www.barrons.com/articles/ipo-market-wework-uber-peloton-51569631194?mod=past_editions?mod=article_signInButton

1.Chart of the Century

AEIdeas Mark J. Perry@Mark_J_Perry

CARPE DIEM

July 12, 2019

Found at https://www.morningbrew.com/

1.Bespoke’s S&P 500 Sector Weightings—

Energy 2019 Less Than 5%

Fri, Sep 20, 2019

S&P 500 sector weightings are important to monitor.  Over the years when weightings have gotten extremely lopsided for one or two sectors, it hasn’t ended well.  Below is a table showing S&P 500 sector weightings from the mid-1990s through 2016.  In the early 1990s before the Dot Com bubble, the US economy was much more evenly weighted between manufacturing sectors and service sectors.  Sector weightings were bunched together between 6% and 14% across the board.  In 1990, Tech was tied for the smallest sector of the market at 6.3%, while Industrials was the largest at 14.7%.  The spread between the largest and smallest sectors back then was just over 8 percentage points.

The Dot Com bubble completely blew up the balanced economy, and looking back you can clearly see how lopsided things had become.  Once the Tech bubble burst, it was the Financial sector that began its charge towards dominance.  The Financial sector’s sole purpose is to service the economy, so in our view you never want to see the Financial sector make up the largest portion of the economy.  That was the case from 2002 to 2007, though, and we all know how that ended.

Unfortunately we’ve begun to see sector weightings get extremely out of whack once again.

https://www.bespokepremium.com/interactive/posts/think-big-blog/bespokes-sp-500-sector-weightings-report-september-2019

1.Oil’s Economic Impact Waning.

Barrons

Is the market too complacent about the risk of higher oil prices?

After all, rising prices can limit consumers’ ability to spend on everything other than gasoline, natural gas, and heating fuel. All those products become more expensive as oil prices rise. That can be bad for the economy.

Rising oil prices can also increase headline inflation numbers. And higher inflation makes it harder for the Federal Reserve to cut interest rates to keep the economy chugging ahead. That also sounds bad.

Still, crude’s impact on the economy is far less than it used to be.

Why Oil Prices Don’t Matter for Stocks Anymore-By Al Root

https://www.barrons.com/articles/oil-prices-economic-impact-stocks-dow-jones-industrial-average-saudi-attack-51568744953?mod=hp_BRIEFLIST_1&mod=article_inline

1.Equities Peak Months Before Recession

Capital Group

Investing ahead of a recession: 5 mistakes to avoid

https://www.thecapitalideas.com/articles/investing-ahead-recession-5-mistakes