Stocks are stabilizing after giving up a sizable chunk of their post-election gains last week. Gold and silver are rallying, while crude oil is flattish along with the dollar. Long-term Treasuries are sliding again.
Venture capital investing is booming in the technology sector. But investors aren’t getting much money back! VC firms invested a net $60 billion more than they distributed to investors last year, the biggest deficit in 26 years of tracking by the firm PitchBook. Two forces are contributing to the situation: AI investment is surging, but Initial Public Offering (IPO) volume and acquisition activity have been relatively weak.
That said, bankers, VCs, and tech sector insiders are hoping that stronger stock market performance and lighter regulation in a new Trump Administration will boost IPO activity. The Renaissance IPO ETF (IPO) has rallied strongly in the last few months and is now up more than 17% year-to-date.
IPO, TSLA (YTD % Change)
Data by YCharts
As expected, Elon Musk will get something in return for his enthusiastic support of Trump’s campaign. The Transportation Department reportedly plans to aggressively push for a new regulatory structure that applies to autonomous vehicles. That would directly benefit Musk’s Tesla Inc. (TSLA) because the company plans a wide release of vehicles that drive themselves. TSLA shares are rising again today, adding to the double-digit gains they’ve already seen since the election.
Count Goldman Sachs Group Inc. (GS) among the firms that think the recent pullback in precious metals is worth buying. Goldman analysts led by Daan Struyven said investors should “Go for gold,” and published a $3,000 target for 2025. They said higher central bank demand, US interest rate cuts, and rising trade tensions in a Trump Administration should support gold prices.
