Episode 96: Jobs Report Ahead of Labor Day Weekend
Market News
The shortfall in August payrolls relative to forecasts did not take the markets by surprise. For much of the summer, equities and bonds have been acting as if a slowdown in economic growth and momentum was already underway.
Around 9 million people to lose benefits by Labor Day: The federal government expanded the safety net for the jobless to a historic degree last year, when the U.S. was in the throes of its most rapid economic downturn in history. Congress twice extended the programs, last December and again this March, but opted not to do so a third time. That means about 9 million people are poised to lose those benefits by Labor Day, according to an estimate from The Century Foundation. Another 3 million or so will see their weekly benefits reduced.
The US IPO market has already posted its busiest year since the internet bubble in 2000, and we expect issuance to stay active in the fall. With broader equity markets at all-time highs and a burgeoning IPO pipeline of private unicorns, many long-awaited names will finally take the leap to public markets, supported by the busiest month of August for new filings in over a decade. That said, fall IPO activity is unlikely to match the summer’s frantic pace. August filings were down from prior months, and the year’s weak IPO aftermarket returns serve as a headwind, evidenced by several postponements at the end of July. As of September 1, there were 115 US IPOs publicly on file, 81 of which have submitted a new or updated filing since June 1.
The price of bitcoin climbed over $51,000 on Friday, reaching its highest level since the middle of May. Investors say bitcoin’s movement coincided with hundreds of millions of dollars in options expiries on Friday. They also pointed to Fed Chair Jerome Powell’s dovish Jackson Hole, Wyoming, speech, suggesting that bitcoin is seeing a catch-up trade as most other assets reacted at the time except for bitcoin.
Friday Market Close
Dow 30 35,369.09 -74.73 (-0.21%)
S&P 500 4,535.43 -1.52 (-0.03%)
Nasdaq 15,363.52 +32.34 (+0.21%)
Filed IPO/SPACs
Allbirds is getting ready to go public and wants to do it via a process it dubs a “Sustainable Public Equity Offering” according to IPO documents. Allbirds aims to pioneer the "SPO" framework, in which a company going public would need to meet certain environmental, social and governance (ESG) criteria in order to qualify for the title. Mostly a marketing and branding exercise for now, the uptick in interest in ESG standards — including from the Securities and Exchange Commission — could mean the company’s efforts to codify certain sustainability pledges prove to be ahead of the curve.
LATAM
Kocomo, a Mexican proptech company, raised $50M in debt financing and $6M in equity to help people buy their dream holiday home. ALLVP and Vine Ventures co-led the equity funding, with participation from Picus Capital, Fontes, and Architect Capital.
Kocomo wants to disrupt the conventional homeownership market and make it “an attainable reality for more people around the world”. The platform allows people to purchase, own, and sell fractional interests in luxury homes, thereby co-owning them to split costs and provide greater accessibility to the market.