US IPO Weekly Winners & Losers

The big IPO lesson of 2023?

I have to go with the iconic lottery slogan: “You gotta be in it to win it.”

Year-to-date, the Renaissance IPO Index has gained +46.9%, compared to +22.9% for the S&P 500. For much of the past year, it might have looked safer to avoid recent IPOs. But if you missed the 5 best-performing days of 2023, that +46.9% drops to +18.7%. Without the 10 best days, you’d be negative.

This week, the Federal Reserve held interest rates steady, with rate cuts officially on the table for 2024. In Fed-speak, ‘higher for longer’ rates just became ‘higher for shorter.’ And that would make the IPO market bigger, sooner.

Naturally, investors snatched up recent IPOs on the news, and the Renaissance IPO Index reached a 20-month high. IPOs are both the first to drop and the first to rally when markets change direction. I’ve called this fear-greed pattern the “canary in the coal mine paradigm.”

For now, it looks like blue skies and green lights for the the 2024 IPO market, although that can change quickly. Our prediction is that 2024 activity looks more or less like a normal year. But compared to the past two years, normal would feel like a flood.

We'll have it all covered in our 2023 US Annual Review, including our outlook for 2024. Look out for that report on Monday. IPO Pro users get the full version.

A quick programming note: With holidays lined up the next two weekends, unless there's groundbreaking IPO news I’ll write to you again in early January.