IPO Enthusiasm Soars with Arm Holdings' Success and Instacart's Adaptation

Also, Disney contemplates $10 billion offer, China's economic recovery and labor strikes loom

• The successful Arm Holdings IPO sparks optimism, influencing Instacart's adjusted IPO plans.
• Media mogul Byron Allen offers $10 billion for Disney's assets; Disney explores potential sales.
• China's economy shows signs of recovery with increased spending, factory output, and reduced unemployment rates.

In this market update, we'll explore the recent developments that have influenced major market indices, from successful IPOs and potential acquisitions to economic signals from China and looming concerns like labor strikes and oil price surges.

Major market indices showed strength on Thursday, with the S&P 500 and Nasdaq Composite both posting gains of 0.8%. Notably, all eleven sectors in the S&P 500 recorded positive performance, signaling a broad-based market rally. This upbeat sentiment was partly driven by the successful initial public offering (IPO) of Arm Holdings (ARM), which priced its shares at $51, creating a market capitalization of $60 billion. On Thursday, Arm Holdings shares closed at $63.59 and opened higher the following morning, indicating strong investor interest with a 6% increase.

Arm Holdings' successful IPO had a ripple effect, influencing Instacart's IPO strategy. Instacart, a leading grocery delivery company, initially valued at $39 billion, has adjusted its IPO pricing to a range of $28 to $30 per share, aiming for a valuation of approximately $10 billion.

In the realm of mergers and acquisitions, media mogul Byron Allen made a $10 billion offer to purchase ABC TV stations and the FX, and National Geographic cable networks from Disney (DIS). Disney is rumored to have also engaged in talks with Nexstar Media about potentially selling these assets. As a result of these developments, Disney's shares experienced a 3.5% gain for the week.

Overseas in China, positive economic indicators suggest a recovering economy. In August, both consumer spending and factory output increased, while unemployment rates fell. China's efforts to stimulate its economy have shown signs of effectiveness, with recent measures including the lowering of bank reserve requirements for the second time this year and reductions in short-term lending rates.

The strengthening U.S. dollar, currently at an eight-month high, has affected multinational companies like Nike (NKE), United Parcel Service (UPS) and Apple (AAPL). Apple reported that the robust dollar contributed to a four-percentage-point drop in its revenue in its latest quarterly report. Observing how the strong dollar impacts the upcoming season, starting in approximately a month, will be of significant interest.

The United Auto Workers union initiated targeted strikes at major automakers in Michigan, Ohio, and Missouri, as contract negotiations reached an impasse. These strikes could potentially impact car prices, raising concerns about the broader U.S. economy. Additionally, oil prices surged, breaching $90 a barrel, reaching a 10-month high, and leading to higher gas prices, which now average $3.87 per gallon.

As the Federal Reserve Open Market Committee prepares to meet next week, the surge in oil prices is worth monitoring, as it can influence inflation. Currently, according to the CME, there is a 97% certainty that the Fed will maintain its current interest rates at the upcoming meeting.

In other market news, Salesforce (CRM) announced plans to hire 3,300 workers after earlier layoffs, signifying one of the first large-scale hiring announcements of the year. Both the S&P 500 and Nasdaq Composite surpassed their respective 50-day moving averages, demonstrating strong momentum. Moreover, it's worth noting that it's triple witching day, where options, options on futures, and index futures all expire, often leading to increased volatility, although the VIX currently remains low, indicating a lack of immediate market concern.

In conclusion, the markets have seen various developments and indicators, from successful IPOs and potential acquisitions to economic signals from China and labor strikes. As the landscape evolves, staying informed and adhering to your investment plans and long-term objectives remains crucial.

JJ Kinahan is CEO of IG North America—which includes tastylive, tastytrade and IG's FX Business. Kinahan traded for 21 years at the Chicago Board Options Exchange. He serves on the CBOE Advisory Board and the SIFMA Options Committee. @thejjkinahan

For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.

Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.