🫠 Oh great, the future's awful

What’s going on here?

Instacart’s initial public offering (IPO) delivered a fresh new boost to a debut-hungry market this week.

What does this mean?

US stock markets had been in something of a listing drought before chip designer Arm had its outing last week. And, now, just like buses, they seem to be coming all at once, with Instacart tossed into the mix just a few days later. The grocery delivery startup’s listing roughly followed Arm’s recipe, with a bunch of big supporters – PepsiCo and Sequoia Capital among them – on hand to support the debut, and a share price that was set to simmer, not boil. It all made for the second big IPO serving in the space of a week, with pandemic-popular Instacart raising almost $700 million. And that’s just set the table for more – data automation provider Klaviyo is set to start trading this week, and the German socks-and-sandals trend-bucking brand Birkenstock is also stepping up plans.

Why should I care?

For markets: Fresh pickings.

With two strong, back-to-back debuts in the bag, we might soon see a bumper crop of companies planning their own floats. And with the way investors devoured Instacart’s shares, this market might appear particularly appetizing to other venture-backed startups. Just don’t go thinking this is a new golden era for stock debuts: with these two IPOs, the amount raised on US exchanges might have drawn level with what was raised by this time last year, but it’s still less than 10% of the amount from the same period in record-setting 2021.

Zooming out: Super market sweep.

Still, any uptick in listings action is a welcome improvement for US exchanges, which are known to fiercely compete for them – and the fees they generate. So far this year, the tech-driven Nasdaq has managed to shove its cart out ahead of the New York Stock Exchange’s, having snagged both Arm and Instacart’s big openings.

What’s going on here?

The OECD looked into the world’s economic tea leaves and foresaw an underwhelming 2024.

What does this mean?

The OECD grudgingly upped 2023’s global growth outlook to 3% – still a smidge lower than last year's 3.3% – and we owe a tip of the hat to the US economy for keeping those numbers respectable. But 2024 – well, that’s where the clouds start to gather. The culprits seem to be peskily high interest rates, which are now sapping business and consumer confidence, along with the fading of China’s once-vaunted economic renaissance. All in all, that means the OECD’s crystal ball sees growth of no more than 2.7% next year. Barring Covid-plagued 2020, that would mark the most sluggish pace since the meltdown that was the global financial crisis.

Why should I care?

For markets: Rate expectations.

Interest rates loomed large in the OECD’s forecast – and for good reason. After all, even as headline inflation seems to be in its final act, core inflation (which overlooks volatile food and energy prices) refuses to exit stage left. And that doesn’t leave central banks with a whole lot of wiggle room. In fact, plenty of central banks are set against further hikes – but when it comes to actual rate cuts, the OECD thinks their hands might be tied till well into 2024. And that means that the average Joe and businesses aren’t on the home stretch just yet.

The bigger picture: Oil’s sizzling.

With the economic picture already pretty cloudy, a comeback in oil prices was the last thing most countries needed – but supply cuts from OPEC+ have helped push them to a ten-month high. And remember, oil’s the lifeblood of most economies, so when it spills, it can dampen other areas too. If this uptrend continues, then, it might add fuel to inflation’s fire, and prolong economies’ rate-induced pain.