IPOX 100 U.S. (IPXO) rises on strength in beleaguered heavyweights after earnings. Plunge in China-linked growth stocks pressures other IPOX Indexes. Amid strength in some of the beleaguered IPOX heavyweights and big jumps in select small-caps towards the end of the trading week after earnings, the IPOX 100 U.S. reversed more relative and absolute weakness seen early in the week to close the week higher. Most other IPOX Indexes, however, remained under pressure, as select high growth stocks shed big YTD gains after earnings and the exodus of foreign money tracking respective China-linked exposure continued, enforced by disappointments over the stalemate in China/U.S. trade talks. Amongst individual companies in the IPOX 100 U.S. (IPXO), the impact of great earnings by select lesser-weighted exposure including payment processor Paycom Software (PAYC US: +22.97%), restaurant chain Wingstop (WING US: +15.87%) or online car selling platform operator Cargurus (CARG US: +8.36%) alongside a good performance in core holdings IPOX heavyweights Spin-offs IL-based consumer staple Kraft Heinz (KHC US: +7.00%) and drug maker AbbVie (ABBV US: +6.59%) more than mitigated big earnings/corporate action-driven declines in home products store operator Floor and Decor (FND US: -21.02%) or food products wholesaler US Foods (USFD US: -18.55%). Both H.K. and U.S.-traded China-linked firms ranked at the bottom of the IPOX Universe tracking non-U.S. domiciled firms, including telecom carrier GDS (GDS US: -23.73%) or the slew of China-linked health care/biotech stocks thus far seemingly insulated from the broad China-linked weakness including Genscript Biotech (1548 HK: -18.92%) or Wuxi Biologics (2269 HK: -13.75%).
IPOX-linked Investment Products Performance Update: Last week, the USD billion 1.2 IPOX 100 U.S. (IPXO)-linked First Trust U.S. Equity Opportunities ETF (FPX) rose to +6.19% YTD, while its international version (FPXI) rose to -0.67% YTD. Amongst IPOX-linked actively managed funds, the Catalyst IPOX® Allocation Fund (OIPAX) closed +8.47% YTD higher.
IPOX® 100 U.S. – Investing with the “FPX” ETF since 2006
|IPOX Price Returns (%)||Last Week||2017||2018 YTD|
|Exposure: Global/International (xUS) (USD) (Price)|
|IPOX Global (IPGL50)||-2.52||28.59||0.54|
|IPOX International (IPXI)*||-3.57||37.80||-2.87|
|Exposure: United States (USD) (Price)|
|IPOX Composite U.S. (IPXC)*||-0.32||33.64||7.35|
|IPOX 100 U.S. (IPXO)*||0.45||26.04||5.95|
|IPOX 30 U.S. (IPXT)||0.59||26.63||3.15|
|Exposure: Europe/Nordic Region (EUR) (Price)|
|IPOX Europe (IXTE)||-2.02||19.27||3.65|
|IPOX Nordic (IPND)||-1.69||17.91||2.86|
|Exposure: Asia-Pacific/China Region (USD) (Price)|
|IPOX Asia-Pacific (IPTA)||-1.89||23.30||0.37|
|IPOX China (CNI)||-7.36||37.67||-2.11|
|IPOX Japan (IPJP)||-2.33||N/A||N/A|
* Basis for ETPs: FPX US, FPX LN, FPXU FP, FPXI US, TCIP110 IT and CME listed e-mini IPOX® 100 U.S. Index Futures [Symbol: IPOU8].
IPO Deal-flow Review & Outlook: Initial showing of deals in the U.S. exceeds other Markets anew / World’s largest telecoms tower operator China Tower (788 HK) lined up for H.K. trading debut. At least 10 (non-China A shares and non-local India) firms debuted last week across accessible global regions, with the average (median) equally-weighted firm adding just +3.71% (+0.05%) based on the difference between the final offering price and Friday’s close. Underlying the potency of U.S. equity capital markets, best initial deal performance based on final offer remained with firms listed on the exchanges in the U.S.: Priced at midpoint of its expected range, e.g., commercial real estate giant Cushman & Wakefield (CWK US: +9.12%) rose on debut while smart speaker maker Sonos (SONO US: +39.67%) – priced below range – surged and ranked the best performing IPO based on final offer. In H.K., biotech Ascletis Pharma (1672 HK: -28.43%) fell sharply, pressured by China’s recent medical scandals and big declines in some of the aforementioned incumbents. Focus this week is on the H.K. IPO of the world’s largest telecommunications tower operator, China Tower (788 HK): Priced at the bottom of its indicative range, the firm raised USD billion 6.92 billion, still ranking it as the world’s largest IPO in two years. Deals in the U.S. include regional airline operator Mesa Air (MESA US) and Rochester/NY-based disease drug maker Vaccinex (VCNX US).
|Select IPOs traded (week: 07/23/2018)||Domicile|
|Arlo Technologies Inc.||United States|
|Ascletis Pharma Inc.||China|
|Bojun Education Co Ltd||China|
|Cushman & Wakefield PLC||United States|
|Grit Real Estate Income Group||Mauritius|
|Hope Education Group Co Ltd||China|
|Sonos Inc.||United States|
|Tway Air Co Ltd||South Korea|
|Select IPOs expected (week: 07/30/2018)||Domicile|
|China Tower Corp Ltd||China|
|Digital Imaging Technology Co||South Korea|
|Mesa Air Group Inc.||United States|
|Vaccinex Inc.||United States|
Lime Brokerage LLC is not affiliated with these service providers. Data, information, and material (“content”) is provided for informational and educational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities. Any investment decisions made by the user through the use of such content is solely based on the users independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Lime Brokerage LLC does not endorse, offer or recommend any of the services nor information provided by any of the above service providers and any service or information used to execute any trading strategies are solely based on the independent analysis of the user.