SchusterWatch #866 (10/19/2026)
Markets follow IPOX® lower as yields tumble, technicals deteriorate.
Elevated Equity Risk: IPOX® SPAC (SPAC) enters bear market territory.
Stocks in focus: ARXS, HONA, CRWV, SDZ SE, MILDEF SS, CXSE3 BS.
IPOs: Iambic's (IAM US) strong debut, Anthropic pre- IPO perps decline sharply.
SUMMARY: U.S. benchmarks fell sharply last week as sentiment toward U.S. stocks caught up with weakness in IPOX®. Appetite toward AI exposure continued to sour ahead of the U.S. midterms, rates fell as inflation jumped, while earnings, on average, met expectations. Deteriorating technicals further pressured our universe of unseasoned stocks, with the IPOX® SPAC (SPAC) entering a bear market.
IPOX® U.S.: The IPOX® 100 U.S. (IPXO), the benchmark for the performance of the largest and best-performing U.S. IPOs and spin-offs, declined -5.80% to +3.89% YTD last week, closing below its 200-day moving average for the first time since July. Amid heightened anxiety over AI, losses were pronounced among our heavyweights, with 62% of portfolio holdings closing the week in negative territory, while the average (median) equally weighted stock fell -3.52% (-1.96%). AI infrastructure platform operator CoreWeave (CRWM US: -25.21%) plunged amid soaring debt costs, with other IPOX® heavyweights following suit. Recently added industrials Arxis (ARXS US: +12.97%) and Honeywell Aerospace (HONA US: +6.43%) were standouts during an otherwise dismal week. Pre-IPO markets mirrored the declines in IPOX®, including among key AI plays OpenAI (-10.24%) and Anthropic (-7.67%).
Figure: IPO Investing with the IPOX® 100 U.S. (ETF: FPX) since 08/2004
IPOX® EX-U.S.: Weak U.S. equity sentiment extended to Asia, with the IPOX® China (CNI: -6.58%) and IPOX® Japan (IPJP: -6.39%) retreating to -15.97% YTD and +59.60% YTD, respectively, while the IPOX® 100 Europe (IPOE) outperformed. Among individual stocks, focus centered on Italian investment firm Bending Spoons (BSP US: +23.84%), which soared anew as Berkshire increased its stake in the firm, while Swiss specialty chemicals maker Sandoz (SDZ SW: +10.70%) hit a fresh post-spin-off high and Swedish defense contractor Mildef (MILDEF SS: +14.53%) hit fresh highs. Across the broad universe of IPOX® Holdings, we also note last week's sharp decline in 06/25 IPO Hacksaw (HACK SS: -29.82%), a Sweden-based prediction markets platform operator, while 04/21 IPO Caixa Seguridade (CXSE3 BZ: +3.79%), a Brazilian insurance provider yielding 6.48%, approached its post-IPO high.
IPOX® SPAC INDEX: The Index plunged -7.30% last week, extending its year-to-date loss to -7.99%. Oil and gas producer Permian Resources (PR US: +6.77%) was the best performer, supported by analyst upgrades, price target increases, and stronger oil prices. Cryptocurrency miner and AI data center operator Cipher Mining (CIFR US: -33.58%) was the worst performer, pressured by a large convertible note offering and a broader AI infrastructure selloff amid growing concerns over debt financing in the sector. Three SPACs announced merger targets, including Pyrophyte Acquisition II (PAII US) with battery and supercapacitor manufacturing technology company Sakuu. No SPACs completed business combinations during the week. Two new SPAC IPOs launched in the U.S. market.
ECM REVIEW: 21 companies went public globally last week, raising a combined $2.27 billion. New listings gained an average of +39.97% from offer price to Friday’s close (Median: +22.03%). U.S. biotech IPOs led accessible deal flow, with RNA interference-based medicines developer City Therapeutics (CTY US: +24.44%) raising $200 million and AI-driven cancer drug developer Iambic Therapeutics (IAM US: +48.81%) raising $150 million. Outside the U.S., Japanese construction management software provider Lecre (648A JP: +35.14%) raised $32 million.
OUTLOOK: This week, the IPO calendar remains relatively quiet, with two sizable offerings expected in accessible markets. South Korean AI infrastructure and cloud services provider Elice Group (0158S0 KS, $150 million) is expected to list on October 20, followed by Australian gold miner Wiluna Mining (WMC AU, $125 million) on October 22.
In IPO News, investment firm General Atlantic, San Francisco home-equity financing firm Unison, SoftBank-backed fintech OPay and Singapore-based data center operator DayOne are planning U.S. IPOs.
