Corporate Finance
The seven-year bull market that began when global equity markets bottomed in March 2009 has been a boon to companies trying to raise money in equities. Between initial public offerings and share sales, more than $1.7 trillion of stock has been sold, including $228.9 billion last year.
This year’s volatility is squeezing off the spigot. January was the slowest month for IPOs since December 2008, when no companies filed after the bankruptcy of Lehman Brothers Holdings Inc. In January 2015, 19 companies listed on American exchanges. The busiest month in the past eight years was July 2014, when 54 companies started trading.
Financial Industry
Volatility in markets can make life difficult for financial institutions: look at the performance of bank stocks, which have plunged twice as fast as the S&P 500 this year. Brokerages, insurance companies and lenders make up the second-biggest proportion of the S&P 500 and are also important sources of employment in the broader economy.
About 8.2 million people, or 5.7 percent of the U.S. workforce, held jobs in the broader financial industry, including insurance and real estate. Hiring has increased in this sector for the past 29 consecutive months, though remains 2.2 percent below its November 2006 peak.
“Layoffs would make an impact if banks cut a big chunk out of the mergers and acquisitions department, or a big chunk out of trading, or a big chunk out of other capital market sensitive areas,”said John Canally, chief economic strategist at LPL Financial Corp. in Boston. “It would put a chill on geographical areas like London and New York that are important financial centers.”