SpaceX-Mania Is Here. So What’s the Problem?
Stocks hit record highs this week, but tumbled after a semiconductor giant inspired a sell-off to close the week.
Meanwhile, the biggest IPO of all time is about to land right on our heads:
SpaceX-Mania Is Coming
The SpaceX IPO is next Friday, June 12.
Elon Musk's baby will trade under the ticker SPCX.
Word on the street is the deal is oversubscribed, maybe thanks to brokers like Fidelity lowering account size requirements to get on the deal.
I have my order in to buy 10,000 shares.
Whoops, that was a typos. It's actually 10. As in ten.
Enough to give me a thrill, but not enough to ruin my life.
But after hearing JR Romero and Sami Abusaad talk about it, I'm thinking about cancelling my order:
SpaceX aims to sell 555.55 million shares at $135 to raise $75 billion.
That's a target valuation of $1.75 trillion, which would give SpaceX the 8th largest market cap of any publicly-traded US company. Bigger than luminaries like Meta (META), Micron (MU), and Eli Lilly (LLY).
To put that in perspective, the entire US 2025 IPO market (including SPACs and other such vehicles) was $70 billion, according to the SEC.
And with AI giants Anthropic and OpenAI also coming public this year, we're on track for a blockbuster year for IPOs.
If all three companies come public, 2026 will likely sport the three biggest IPOs of all time.
Saudi Aramco holds the record at $29.4 billion in its 2019 offering, which should easily be dwarfed by The Big Three.
But there's a catch.
The market tends to top out in years with surges in public offerings:
It happened in 2021, 2014, 2007, and 2000.
Why?
Likely because we get surges in offerings when capital markets conditions can't get any better.
So call me a little cautious.
Speaking of Caution…
First Broadcom, Now Oracle?
The AI/Storage/Semi stock boom was raging out of control, until Broadcom's (AVGO) underwhelming AI chip forecast ended the party Wednesday.
AI-levered companies have been knocking the ball out of the park, so Broadcom's disappointment felt out of nowhere.
Broadcom is indeed growing like a weed.
Just not fast enough for the hungry masses.
And there's no evidence it means AI demand is slowing, let alone dying.
But the stakes go up on Wednesday, June 10 when software giant Oracle (ORCL) reports earnings.
Oracle is a major AI player, and the market may not react well to another AI-related disappointment, no matter how small it is in the grand scheme of things.
Rate Hike Odds Are Going Up
Following Friday's strong job report, traders are pricing in increasingly higher rates.
Right now, the market is pricing in a 28.5% chance of rates staying the same through year-end:
That's down from 54.4% last week.
Meanwhile, these are the implied odds of each level of rate hikes:
Odds of one 25 bps hike are at 42.9%, up from 36.4% last week.
And odds of 50 bps in hikes are at 22.5%, up from just 8.1%.
I bet new Fed Chair Kevin Warsh is going to have some very interesting conversations with President Trump…
What Happened to Bitcoin?
I've heard people call Bitcoin a “store of value” and “a hedge against inflation.”
But it's one of the worst asset classes of 2026, dropping 30% in a banner year for risk assets.
The bulls' last hope is a double bottom at the $60,000 area:
The big question is why?
Some blame the US dollar and the prospect of higher rates.
I think the problem is much simpler.
People saw how fast semiconductor and AI stocks were rising, and took their capital elsewhere.
Look at this Bitcoin vs. SMH chart:
They were very loosely correlated until last November, when they took divergent paths.
One to the promised land.
The other to the wasteland.
Sentiment Remains Neutral
The latest AAII sentiment survey shows that 36.3% of investors are bullish on stocks.
This is the second straight neutral reading in a market that's made record highs.
Meanwhile, the CNN Fear & Greed Index is 50, right in the neutral zone.
This is healthy to see.
Because it shows some caution out there, even with stocks blasting into orbit.
Or maybe not everyone caught the hot semiconductor/AI trade, which was brutally strong up until Broadcom.
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