A slew of M&A activity and rising chances of a US stimulus deal helped stocks bounce back from a steep weekly decline.
Palantir, Peter Thiel's CIA-backed data analytics company IPOs today and is expected to be valued around $20 billion.
President Donald Trump and VP Joe Biden square off this evening in the first Presidential debate.
MARKETS
On Tuesday the FTSE 100 is set to open +22 at 5949, the DAX -26 at 12,896 and the CAC -5 at 4838.
The Dow surged by 1.51% on Monday, led by sectors tied to the economy, with financials and industrials up strongly amid renewed stimulus after House Speaker Nancy Pelosi suggested a deal to roll out more aid was still on the table.
The Nasdaq gained 1.87% while the DAX index jumped by 3.2%. Gold and Silver surged as U.S real yields tumbled.
DAY AHEAD
For the day ahead, I’ll be watching out for the Palantir IPO (NYSE:PLTR), Micron (NASDAQ:MU) Technologies earnings and the first presidential debate between Donald Trump and Joe Biden.
Really Palantir (ticker PLTR) will be a direct listing not a proper IPO. The listing is expected to value Peter Thiel’s company at over $20 billion but as is often the case with tech companies when raising money - it is still unprofitable.
Recent IPOs have done very well with the most ‘doubling’ - that’s a 100% gain in the stock price - since the dot com bubble. However, direct listings last year didn’t capture the imagination of investors. Slack is up only 5% from its reference price and it took a jump in user growth during lockdown and signing Joe Rogan for a podcast to get people excited about Spotify.
Micron Technologies stock was left out in the cold during this year’s giant tech rally. The shares are down 9%, under-performing the S&P 500. Falling memory prices are hitting the semiconductor-maker, bringing down earnings per share estimations from $12 last year to closer to $3.
The presidential debate happens well after the market close on Wall Street so its a risk-event for Wednesday that requires attention on Tuesday. Trump is arguably the more market-friendly candidate, but markets are now banking on a Biden win.
A big upset by Trump could unearth some market volatility as investors re-price a possible Trump second term - or maybe worse - a contested election result and even bigger delays until the next stimulus package gets passed.