Friday in US market showed somewhat mixed picture. The Dow Jones Industrial Average was in red during the whole market day, however it ended up just in the last second. It is the new record with 20,821 points so far. The same is right about S&P 500, eventually ended in red. Nasdaq rose marginally as well, turning around it Thursday’s losses. As New Home Sales was the only important data (coming short of expectations), traders’ behavior was, probably, inertial.
USD Index, showing Dollar’s strength against a pack of currencies, was falling down during Asian and European sessions, but quickly regained its positions after US market opening. It finished the day at 101.12: 0.07 better than a day before.
Today’s Economic calendar in US is not full of events, however we can see Core Durable Goods Orders in GMT 13:30 and Pending Home Sales (MoM) 1.5 hours later. In the first case we are talking about somewhat high expectation of +0.5%: such a forecast appeared only 3 times since July 2015 and was never higher. Last 3 months demonstrated at least as good results as this forecast, but how long can this trend continue? One more positive result will probably attract traders’ eyes to this beautiful drive, supporting US currency and US market. The result worse than expected can affect both.
However, one specific event is discussed as any other during the last weeks. This event should arrive as soon as during this week. And when Thursday is the most anticipated date, no one can be sure. Snap Inc., the owners of Snapchat app, is named by analysts the biggest technology IPO since Facebook back in 2012. The final price tag is still unknown: it was told to be $20-25 billion, then $16-19 billion, when the last rumors are $19-22 billion.
Multiple investors are wondering now whether to buy a stock during the IPO day. From one side, there is an opportunity to cash out quickly. As Renaissance Capital experts say, the average Technology IPO in last five years showed 25% jump, when about 80% of stocks ended up or at least flat. Longer (and much longer) trade is an additional option, as may be seen, when checking Facebook stock, that made about 250% since its IPO. In addition, Goldman Sachs has just projected, Snap’s revenue will increase from 400 million in 2015 to 2 billion in 2018.
However, up to now growing revenue has not translated into the bottom line, and each next quarter Snap Inc. is only losing more money. A total control over votes, two co-founders will keep even after the IPO, is scaring some investors as well.