This means that there may not be a significant rally in new stocks debuting on Wall Street anytime soon. Still, experts hope some unicorns could hit the market later in 2022.
“The underperformance of companies that went public in 2021 doesn’t bode well for companies looking to go public now. Companies are waiting to see how things stabilize,” Gerring said.
Still, the IPO market is expected to open a bit later this year. Even if the biggest unicorns stay on the sidelines, other private companies could benefit from the fact that the broader market has rebounded as inflation fears have started to recede.
Will Braeutigam, head of capital markets transactions at Deloitte, said the IPO window could open in the fourth quarter of this year or early 2023 for more companies to assess offers.
“The market knows more today about inflation and how the Fed is taming it,” Braeutigam said. “The sun is rising. Things are looking up.”
What’s the Fed’s next step?
The next Federal Reserve interest rate meeting won’t take place until September 21, which still seems a long way off in this fast-paced, short-term obsessed world.
The annual symposium, held in the Wyoming resort town at the end of August, is generally newsworthy. Personalities from the investment world and central bankers usually meet to discuss the future of the economy. This year should be no exception. Fed Chairman Jerome Powell is scheduled to deliver a speech Friday morning.
Powell is not likely to discuss details of future rate hikes. He is more inclined to repeat the mantra about how the Fed is “data dependent” and will now take things “meeting by meeting” when it comes to guidance.
But in light of recent economic data showing that the labor market is still strong and the inflation rate is beginning to subside, some experts are wondering if the Fed will be able to slow the pace of its rate hikes even further. There are fears that if the Fed is too aggressive, it could lead to a recession.
“Powell and other members of the Fed might wonder if they should stay on their current path,” said Don Calcagni, chief investment officer at Mercer Advisors. “The downside risks to the economy are very real.”
With that in mind, Calcagni said he wouldn’t be surprised if the market soon started pricing in the possibility of just a quarter-point hike at upcoming Fed meetings.
Friday: Fed Chairman Powell speaks in Jackson Hole; personal income and expenses in the United States; University of Michigan Consumer Sentiment