![]() ![]() ![]() In the event of a “soft landing” for the U.S. Analysts in Goldman Sachs Research also recently raised their S&P 500 year-end price target to 4500, representing about 2.5% upside from the current level. Our economists’ forecasts - which project a 25% chance of recession in the next 12 months - indicate the environment for IPOs could improve further in the second half of the year. Those deals raised a total of $2.4 billion in gross proceeds, compared with $3.8 billion during all of 2022. IPOs of more than $25 million this year, not including SPACs and spin-offs. The ISM manufacturing index is the only variable in the barometer that hasn’t improved since September 2022.Īnd while the improving macro backdrop hasn’t translated into IPO activity yet, follow-on stock offerings, which take place after a company has gone public, have been more resilient. Stock valuation multiples, meanwhile, are still elevated by historical standards. Shorter-term Treasury yields have reached a peak amid signs that the Fed is close to the end of its hiking cycle. ![]() CEO confidence has improved, even though the median professional forecaster gives a 65% probability of recession over the next 12 months. The barometer has also been buoyed by other components it’s based on. While the S&P 500 has now reached a new 52-week high, it remains 10% off its all-time high in January 2022. At the same time, price swings in the stock market have moderated - the VIX, which measures the implied volatility of the S&P 500, dropped below 15, the lowest level since prior to the pandemic. Since the start of second quarter, the maximum drawdown has been just -3%. Kostin also notes that drawdown in the S&P 500 is the most statistically significant driver of IPO activity: The largest peak-to-trough drawdown this year is -8%, compared with -13% on average since 1928. stocks been relatively calm amid signs of resilient economic growth and the expected end of rate hikes by the Federal Reserve. Equity Strategist David Kostin writes in the team’s report. Stabilizing prices in the stock market have been the main driver behind the rebound in the IPO barometer, Chief U.S. ![]()
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