Good morning from the Financial Times.
Today is Thursday, March 20, and this is your FT News Briefing.
The Federal Reserve is still in wait -and -see mode and tech company… The Fed chose to leave interest rates untouched yesterday, and Chair Jay Powell said the central be in a hurry to shift rates because of elevated uncertainty.
You see, the Fed also cut its economic growth forecast for the year and it says that its progress on lowering inflation has stalled for now.
Powell said that US president Donald Trump's policies have affected the central bank's outlook, but it's unclear how much of the inflation pressures are because of tariffs.
Even with higher inflation expectations, Fed officials broadly think the central bank will implement one or two quarter point interest rate cuts by the end of the year, but a few members think there will actually be no cuts in 2025.
Despite all the market turmoil in the US, a handful of tech startups are still expected to publicly list next month.
It's creating some cautious optimism for what some see as a window of opportunity to get the IPO market out of its slump.
Here to explain is the FT's Tabby Kinder.
Hi, Tabby. Hi, Mark.
All right, Tabby. So which companies are in the middle of an initial public offering push?
Yeah, so there's two companies that we are expecting to see IPO in the next few weeks.
And they are CoreWeave, which is an AI data center operator based in New Jersey, and Clarno, which is a Swedish fintech company that does payments processing.
And can you give us just some context about what the IPO market has looked like over the past several years?
Yeah, so tech IPOs have had a really rocky ride since the pandemic hit in 2020.
There was a big IPO boom in 2021, but since then, it's been a largely frozen period for tech deals for tech IPOs.
And that was largely a response to inflation, rising interest rates, the war in Ukraine, all of this created a uncertain and unstable market environment that just didn't make it a good place to be if you were a startup coming to market.
And what are the concerns now for companies thinking about going public?
So a lot of investors and bankers were optimistic that as we came into the end of last year, that there would be a kind of new stability in markets.
We had the US election, interest rates started coming down, and so people thought 2025 would be a good time for companies that have been looking for a good window to list. Instead, what's happened is we've had a continuation of uncertainty.
Donald Trump's trade tariffs have really rocked markets in the last month.
And so there just hasn't been the kind of stable market environment that bankers had hoped to see this year.
Yeah and just for context the tech -heavy Nasdaq composite is down like 12 % over the past month.
Given these conditions, what are these companies that are looking to IPO Yeah.
I mean, a lot of them have reached a point where if we aren't going to have a kind of prolonged period of stability, then they may as well list now, private companies have. It's creating some cautious optimism for what some see as a window of opportunity to get the IPO market out of its slump.
Here to explain is the FT's Tabby Kinder.
Hi, Tabby. Hi, Mark.
All right, Tabby, so which companies wants to kind of get out to market, list their shares, and hopefully some of these companies will give confidence to smaller companies to follow suit?
Yeah. And this window of opportunity that Wall Street has been talking about, why does the timing of these IPOs matter to the broader market?
Yeah. So there's a lot of psychology when it comes to timing an IPO.
And people tend to like to get these things done at like the start of the year when budgets are being set, when companies' new financial years are being decided and audits are being done, and so April is kind of traditionally a good window.
But people I spoke to...
I mean, they really kind of cautioned that if we don't see the flurry of IPOs that we're expecting to see in April and May, that really the year will be a bit of a dud.
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Funds key ride since the pandemic hit in 2020.
There was a big IPO boom in 2021.
Since then, it's been a largely frozen period for big tech deals, for tech IPOs, and that was largely a response to inflation, rising interest rates, the war in Ukraine.
All of this created a uncertain and unstable market environment that just didn't make it a kind of a good place to be if you were a startup coming to market.
And what are the concerns now for companies thinking about going public?
So a lot of investors and bankers were optimistic that as we came into the end of last year that there would be a kind of new stability in markets.
We had the US election.
Interest rates started coming down.
actors, and increasingly streamers in each different media market, in each different jurisdiction.
Then you have another 30 % which comes from sponsorship.
And that has been one of the most successful sports marketing programs in history.
Those two things, that TV and sponsorship, have really been 90 odd percent of the Olympics revenue line now.
Alright, so what might change under a new president?
We're really seeing some signs of change.
Even just last week, NBC extended its deal to air the Olympics.
But for the first time we saw the deal - It's trade tariffs have really rocked markets in the last month.
And so there just hasn't been the kind of stable market environment that bankers had hoped to see this year.
Yeah. And just for context, the tech heavy NASDAQ - To interact with athletes, to interact with the games.
What we did see in Paris was the beginning of sponsorship activity on the podium.
So medalists were handed their medals in boxes provided by LVMH, a sponsor.
And I think the next president is going to have to decide sort of how far to push things, because it's quite controversial in IOC circles, even what's happened so far.
Okay. So the IOC needs to basically loosen their grip so that these broadcasters and sponsors can get more bang for their buck.
Josh, what does this election tell you about the state of the Olympics and the IOC more broadly.
Well, I think a lot of it depends on who you ask.
If you talk to the outgoing administration, the answer is that there's really nothing wrong with the IC in its current state.
And that a lot of the sort of so -called issues that have come up during the campaign are simply sort of smart politics.
But then you talk to the candidates and they talk about, yes, things have been fine in the past, but a real sense that unless things do change, quite quickly and quite significantly.
These conversations that may now just be sort of quite lighthearted campaign conversations actually.
In some cases, their employees need liquidity.
Their management have been unable to kind of realize the valuation of their shares for years now.
And so I think some tech companies are coming to a point where they think, if not now, then when?
And that's certainly being fueled by advisors like Wall Street Banks who have been really suffering from a lack of tech IPOs in the last few years and are really keen for some of their clients.
