In March Nasdaq changed how companies enter the Nasdaq 100. Before, you needed 3 to 12 months seasoning and a 10% public float. Now its 15 trading days if youre top 40 by market cap, with no float requirement and no seasoning. SpaceX listed with a 4% free float, meaning almost no supply, yet an estiamted 22 to 27 billion in forced passive buying hit immediately. The same mechanics apply to OpenAI and Anthropic. These three companies are targeting 200 billion plus in a six month window. The entire US IPO market raised 45 billion in all of 2024. The broader market is set to absorb an estimated 4 trillion this year.
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That kind of issuance volume has to come from somewhere. If global capital is rotating out of emerging market debt, European equities, and secondary US names to chase this wave, the pressure doesnt show up in the bubble. It shows up in the places being drained. Currencies weaken, yields rise, and equity markets stall. Then when the rotation eventually reverses, the markets that provided the liquidity may be too fragile to absorb the outflow. Im watching early flow data for signs of EM stress. Has anyone else seen early pressure on frontier or EM flows? Would be curious to hear what others are observing.