Circle this date: March 23, 2020. If the current U.S. stock market conditions hold, that would mark the closing low for 2020’s bear market. After the market’s slide last Monday, a three-day rally lifted the Dow Jones Industrial Average back up into a bull market while moving the NASDAQ Composite Index and the S&P 500 away from the bear and into a correction.
And what exactly is so important about March 23rd for today’s market? Past history indicates that the IPO market starts coming back to life about four to six weeks after a market’s bottom has been reached.
Let’s take a look at the three major U.S. stock market indexes.
The birth of a bull market is a 20 percent gain from its previous low.
The Dow Jones Industrial Average closed on Feb. 12, 2020, at 29,551.43, the all-time high, and skidded to its most recent closing low of 18,591.93, down 37.7 percent from that peak, on March 23rd. Three days later, the blue-chip Dow average closed at 22,552.17, up 21.3 percent from its previous low, on March 23rd.
The birth of a market correction is a 10 percent rise from its previous low.
The NASDAQ Composite Index closed on Feb. 19, 2020, at 9,817.18, its all-time high, and fell to its recent closing low of 6,860.67, down 30.1 percent from that peak, on March 23rd. Three days later, the NASDAQ closed at 7,797.54, up 13.7 percent from its previous low.
The S&P 500 closed on Feb. 19, 2020, at 3,386.15, the all-time high, and fell to its recent closing low of 2,237.40, down 33.9 percent from that peak, on March 23rd. Three days later, the S&P 500 closed at 2,630.07, up 17.6 percent from its previous low.
On Friday, March 27th, the U.S. stock market took another sharp hit with the Dow falling 4.1 percent, the NASDAQ sliding 3.8 percent and the S&P 500 dropping 3.4 percent.
For the week, though, U.S. stocks finished with their biggest weekly gain since 1938, The Wall Street Journal noted, with the Dow jumping 13 percent and the S&P 500 advancing 10 percent.
In today’s market, the Dow can be up 1,000 points or down 1,000 points – or more – in a day. Everything is in the hands of the gods of Wall Street.
This Week’s Solo Deal
There is just one IPO scheduled to be priced this week. It is a small-cap Chinese company called WiMi Hologram Cloud (WIMI proposed).
WiMi Hologram, based in Beijing, offers augmented reality-based (AR-based) holographic services for advertising and holographic AR entertainment products.
The company cites the novel coronavirus (COVID-19)outbreak in China as a risk factor, the prospectus says.
For the 12 months that ended on Dec. 31, 2019, the company reported revenue of US$45.6 million and net income of US$14.2 million.
WiMi Hologram plans to offer 5 million American Depositary Shares (ADS) at $5.50 to $7.50 each on Tuesday evening, March 31st, to trade on Wednesday morning, April 1st. This is a NASDAQ listing.
April’s First Week
This brings us to the week of April 5th, the first full week of April, and the IPO Calendar is blank so far. But some players could jump quickly onto the IPO Calendar when the SEC’s filing window opens again for business on Monday, March 30th.
Stay tuned.
Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations or opinion.