This Week in Review | Upcoming IPOs, US Jobs Data, Credit Card Delinquencies

Transcript

Meg Leiken:

Hello and welcome to This Week in Review. This weekly segment is designed to highlight a few important developments you may have missed this week, what they may mean for markets, and most importantly, the potential impact for investors. To stay up to date with our latest market insights, subscribe to our YouTube channel or visit FisherInvestments.com. Now, let's review what happened this week.

First, upcoming IPO activity.

On Monday, artificial intelligence company Anthropic announced they filed initial paperwork for pursuing an initial public offering or IPO. Other high profile private companies are preparing for their own offerings, too, with OpenAI anticipated to submit its own initial filings soon. SpaceX, another closely followed private company, is further along in the process and slated to issue public shares by the end of next week. With this much big IPO news swirling, some may wonder whether it's smart for investors to get in on the action and what these mega IPOs might mean for the broader market. The numbers behind Anthropic's filings are eye catching, to say the least. In May, the company raised $65 billion in new funding, reflecting a valuation of almost $1 trillion. Meanwhile, SpaceX is aiming to IPO next week with a current valuation of $1.75 trillion. If Anthropic, OpenAI and SpaceX all debuted this year, 2026 could end up as the biggest year ever for money raised through IPOs. So are IPOs good investments? Ken Fisher—Founder, Executive Chairman and co-chief investment officer of Fisher Investments— famously says, "IPO actually stands for It's Probably Overpriced." Companies go public when it suits existing owners best. The point isn't to hand retail investors a windfall. It's to cash out the company's founders and early backers. Historically, many IPOs trail the broader market for years following their debut. Beyond that, we think today's IPO activity reveals insights into current investor sentiment. Markets move on the gap between expectations and reality, and the higher investor sentiment is around these IPOs, the harder it is for reality to beat expectations. Right now, expectations are high for US tech and AI-related companies. But this doesn't mean the bull market is necessarily in trouble. US and tech firms share price growth has largely been supported by earnings, and we see plenty of positives outside these categories that point to an ongoing bull market. So, in short, we don't think investors should chase IPOs. A sounder approach is to stay grounded, keep your expectations rational, and remember that compound growth in a globally diversified portfolio, not a flashy IPO debut, is what really helps build wealth over time.

Next May, US employment data.

Today, we got an updated snapshot of the US labor market, with nonfarm payrolls surpassing expectations, adding 172,000 jobs while unemployment remains steady at 4.3%. The labor market spent much of last year and the early part of this year fluctuating between growth and contraction. But May's reading marks the first three month stretch of consecutive job growth in a year. We don't want to take anything away from a strong jobs report, but it's important to keep the proper context in mind. Employment data is a late-lagging indicator. Companies hire after demand shows up, not before. So May's gains largely confirm what forward looking stocks have already been pricing in for months. Some may wonder whether stronger employment lowers the odds of more Fed rate cuts this year, and without those cuts, they worry this bull market may run out of steam. But when you look at the data, that assumed link between rate cuts and stock returns doesn't really hold up. Take a step back and look at how this bull market has unfolded since October 2022. Stocks kept climbing through it all: aggressive rate hikes, a long stretch of holds, cuts, more holds and additional cuts. Rates have also been unchanged since December and stocks have kept hitting new record highs. The current bull market is not unusual in that respect. The 2009 through 2020 bull market also lasted through a wide range of policy conditions and still delivered major gains. Markets don't need lower policy rates to advance, they just need reality to outpace expectations. When pundits insist the Fed needs to rescue the economy, they're actually quietly lowering the bar. And once expectations drop, it doesn't take much for the economy to clear them. A labor market that keeps holding up tells you something really important. The foundation may be a lot sturdier than the headlines are letting on. And for long-term investors, the right response isn't to recalibrate your investment strategy around the Fed's next move.

Finally, rising credit card delinquencies.

Recent headlines warn that rising credit card delinquencies could signal a coming debt crisis. The numbers behind those warnings sound alarming, with 90-day credit card delinquency rates the highest level we've seen in 15 years. For many, that figure alone is enough to wonder whether the American consumer is finally tapped out. We're sympathetic to any households feeling the squeeze. Rising costs are real, and the strain shows up in plenty of family budgets. But when you look at the data, US credit card balances actually fell 2.3% in the first quarter of 2026, from $1.28 trillion in Q4 to $1.25 trillion. And while that number sounds enormous, credit card debt represents only about 7% of total U.S. household debt. Mortgages, which make up about 70% of household debt, paint a very different picture of household finances. Delinquency rates on residential mortgages today are still lower than they were at any point during the 2009 to 2020 economic expansion. And importantly, the constant media focus on growing household debt completely ignores the asset side of consumer balance sheets. Americans' household net worth today is at its highest level in history. News about credit card delinquencies is a useful reminder that scary sounding statistics often look a little different once you compare them to the broader data. The idea that consumers are maxed out is popular, but popular doesn't necessarily make it accurate. Individual hardship is real and worth acknowledging, but at the macroeconomic level, there's little evidence of a debt crisis forming.

That's it for this week.

Thanks for tuning in to This Week in Review. If you're looking for more insights, then don't miss our other series Three Things You Need to Know This Week, released every Monday. You can also visit FisherInvestments.com any time for our latest thoughts on markets. Thanks again for joining us, and don't forget to hit Like and Subscribe.