IPO exuberance aside, stocks are having a lousy week

December 11, 2020, 10:19 AM UTC

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Happy Friday, Bull Sheeters. It’s a risk-off day as stocks and futures slide across Asia, Europe and the U.S.

The IPO calendar is much lighter today after yesterday’s blockbuster Airbnb listing, a debut that values the home-rental platform at a staggering $100 billion.

Never mind that almost none of us can actually, you know, travel.

Let’s check in on what’s moving the markets.

Markets update


  • The major Asia indexes are mixed in afternoon trading with the Hang Seng leading the way, up 0.3%.
  • The Trump Administration’s order last month to limit Chinese listings is having a knock-on effect for index managers and ETF providers around the world, the Financial Times reports. In short, they may need to follow suit to stay in the good graces of the American markets authorities.
  • President-elect Joe Biden named a notorious China hawk, Katherine Tai, as his pick for the U.S.’s top trade representative.


  • The European bourses are in the red this morning with the Stoxx Europe 600 down 0.9% two hours into the trading session.
  • Boris Johnson is warning businesses and the British public that a no-deal Brexit is now “a strong possibility.” The FTSE and pound sterling slumped further as investors worry about the economic uncertainty to come.
  • Climate hawks will be pleased with the news coming out of Brussels this morning. The EU trading bloc has set forth the 2030 goal of cutting emissions by at least 55% (from 1990 levels). Oh, and the traditional bickering forces of Europe have also managed to do something Washington cannot: reach an agreement on a €1.8 trillion ($2.2 trillion) COVID stimulus package.


  • U.S. futures have been sliding all morning. That’s after tech stocks eked out a modest gain yesterday. The S&P 500, meanwhile, has slumped the past two days as Washington is unable to make any progress on a second round of stimulus, and it’s on a week-by-week spending allowance to fund the federal government.
  • Like the morning after a blowout house party, all is quiet for Airbnb shares as I type; they’re totally flat in pre-market trading. The pandemic-battered home-rental platform now carries a market cap of more than $100 billion after yesterday’s monster debut.
  • From the giddy to glum, we go… Investors don’t much care for labor market data, but your correspondent does. Yesterday, 947,000 workers filed for unemployment claims (on an adjusted basis, it was 853K), as layoffs continue to escalate. Bull Sheeters, I know, have a big heart. I know you won’t forget about those around us who are struggling during this Christmas period.


  • Gold is flat, trading below $1,840/ounce
  • The dollar is higher.
  • Crude is down, but Brent futures are trading above $50/barrel, a 9-month high.
  • Bitcoin continues to swing wildly. It’s down 3%, trading below $18,000.


By the numbers


As we wrap up IPO week, let’s check in on the big new listings. DoorDash soared 85.8% in its debut session on Wednesday, raising $3.4 billion. Yesterday, it was Airbnb’s turn, closing a staggering 115% above its list price. C3.ai had an had an even more astounding debut, with shares jumping more than 150% at one point on its first day. In a year of epic bull rallies, it’s probably fitting that we’re closing out 2020 with a bit of IPO mania for tech stocks. What could go wrong?


We get November retail sales figures on Dec. 16, one of the final big data points for 2020 from which we can assess the health of the U.S. economy. Remember: consumer spending makes up about 70% of U.S. economic output. Goldman Sachs, for one, believes the numbers will be pretty weak, thanks to “a confluence of negative factors: waning fiscal support, pandemic-driven declines in mall traffic, and a high hurdle for sequential growth in e-commerce following outsized gains earlier in the year.” They forecast a -0.9% month-on-month decline. That doesn’t sound like much, but for a Christmas period, that’s downright awful. Congress’s inability to reach a deal on a new stimulus deal is a big culprit, Goldman says.


I’ve been remiss in not sharing with you our winner for the Dow 30K contest.

A little refresher: back in mid-January, in the very first Bull Sheet newsletter, I asked readers to give me their best guesstimate for when the Dow Jones Industrial Average would top 30,000. (It was trading around 29,500 at the time.)

The emails then came streaming in, and, one reader after another told me the blue chip index would top 30K by the end of January, no problem. A few others said, February, book it! Another trickle said definitely by the end of Q1—let’s go with March.

These were truly bullish calls as, by then, COVID was a known risk for the markets.

One reader, J.U., hailing from Munich, stood out. He told me Sept. 15 would be the date. He was a bit ahead of the game; the actual landmark closing happened on Nov. 24. But he was far and away the closest.

Well done, J.U.!


Have a nice day, everyone. I’ll see you here tomorrow. 

Bernhard Warner

As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.

Today's reads

"Dramatically" overvalued. JP Morgan equities analyst Ryan Brinkman is no fan of Tesla. In a recent investor note, he upped his price target on the EV pioneer to no more than $90, saying it's just way too pricey. He's particularly concerned about the carmaker's bottom line. On cue, Tesla shares rose nearly 4% yesterday, closing at $627.

Power of the press. Chapeau! to New York Times columnist Nicholas Kristof. Thanks to Kristof's intrepid reported on the presence of all the seedy and even illegal content on Pornhub, the world's biggest credit card companies sprung to action. Mastercard and Visa yesterday agreed to block their customers from using credit cards on the platform.

Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.

Market candy

The billionaires club

Brian Chesky had one of the best CEO interviews of the year yesterday. He was on air with Bloomberg's Emily Chang who informed him that the Airbnb stock had just opened at $139, leaving Chesky at a loss for words. He recovered a few moments later. And, by day's end, he was valued at a cool $11.2 billion.

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