Transcription
Friends, how are you doing? It's June 11th, one day before the SpaceX inclusion here, and boy, is the market starting to get rowdy here. So, the news has literally been 1, 2, 3 today. It's been breaking even news with SpaceX, Trump, the war, uh, the market pushing up here, and let's get right into it and just talk about what's going on here.
So, this is a very interesting place for the market right now. So, at the end of the day here, the market shot up. The Dow jumped 900 points, and it's still even after market here starting to push a little bit more, too.
So, Trump released this on Truth Social. He said, "Based on the fact that the decisions with the Islamic Republic of Iran have been brought to the highest levels of Iran leadership and approved, I have as President of the United States of America canceled the scheduled strikes and bombings against Iran this evening."
So, this was what this was the situation. So, before this, Trump was like, "Hey, Karg Island, we're going to take it. We're going in. We're going to bomb them." All this stuff, and obviously, he, you know, he openly said that because he was, you know, he's setting them up there. So, now discussions and final points have have been in both concept, concept, a great deal, uh, approval by all parties involved, including the United States, Israel, and all all these, Egypt, I mean, all these, all these countries right here. Uh, yadda yadda yadda, and obviously the Strait of of Hormuz, this is the big thing, uh, will be open.
So, the market went, "Okay, we like this." So, now we're in this situation where tomorrow we've got SpaceX coming to the market here. And obviously, if you're lucky enough to get a share, if how many shares you get, maybe one, two, it's going to be very interesting who gets what here. Um, but with that, you know, you've got to hold them for a moment here. And this is the situation. I, I, uh, SpaceX is going to work, but the the first, you know, six months of this is going to be very crazy, especially when you're able to trade it here.
So, by tomorrow night, SpaceX could be a $2 trillion company, depending on how much is bought, aggression, what happens here, who breaks rules, who doesn't, what's going to happen. And this is the place of where it's going to be very interesting, um, what, what we're about to see here, but more than not, you know, we're going to see crazy gains, you know, if you, if you went through the whole GameStop AMC moment, this is kind of what we're going to be dealing with probably the next six months of SpaceX, if I had to imagine, too, at least getting up into the next big IPOs of, you know, probably OpenAI is going to be big, but Anthropic will be even bigger.
So, with that, SpaceX here is going to have a lot of valleys in it here in the next six months. In the next year, it's probably going to continue, and we're going to have a lot more data on revenue, what's going on. And too, with that, you know, what this is going to look like with, you know, how soon they go in the S&P 500. I mean, we could be talking by summer of next year, they're put into the S&P 500 here, and that, that is very, that is a very likely situation that's going to happen here.
So, I, I don't think it's a, if you're in SpaceX for the next, you know, I'm riding this out for the next 10 years, you may not care. And we don't know what, what's going to happen here, you know, obviously there's going to be moments where this goes up to incredible prices, and then there's going to be moments where there's incredible sell-off. There's going to be moments where people kind of just let the dust settle, and then they start jumping back in, a news breaks, contracts, whatever it be, revenue increases, and we're going to see high spikes, and it's going to be very interesting.
This will be one of the most popular stocks in the general stock market probably for the next handful of years. I mean, you're literally going to watch a child be born into the stock market tomorrow, and you're going to watch it grow up here. It is going to be a very interesting place for all investors. So, um, with that being said, I can only imagine what we're about to watch tomorrow. It's, it's going to be really interesting, and obviously Elon will become a trillionaire off of this.
But too, you know, this is a place where I think Tesla's going to get a lot of attention. I think people are not paying attention enough attention to Tesla because Tesla is obviously the sister company to SpaceX, and this is going to be a place where Tesla is going to get a lot of, a lot of heat too, good heat, where people are going to be buying it because, you know, don't forget what's going on with Tesla. You know, we've got Optimus. You know, Optimus is a huge, huge, huge situation here that will be coming to market, and Tesla for a while is going to be making a lot more money than what SpaceX is making here.
But, you know, think about this, six years, seven years down the road, is SpaceX untouchable? It's, it's a 5, 6 trillion dollar market cap, you know, and that's possible. That's very possible with high valuation. It's probably always going to trade X, God knows whatever, what it should, and it's going to be a place of where revenue is going to be outrageous because they can do whatever. You know, they, they're, look, look at who they are, what they're doing. And you know, you're going to see SpaceX and Tesla kind of bounce off each other too, where both companies are working together.
So, this is where I look at, you know, do they join forces in the future, or do they become one? Do they go under one banner? You know, what does this look like? There's a lot of unknowns, but it's going to be, it's going to be fun. You know, that's the main thing. Investing should be fun. Investing should be interesting, and this is going to be such a key moment for the stock market, and it's going to rally the stock market. It's already rallying the stock market.
So, this is the one, two, three punch of what we're looking at right now at the market, where the general stock market has SpaceX tomorrow. What if the deal, what if, and this sounds so, er, you know, naive, I feel like to say here, but if there is actually a deal where the war's done, the strait's open for good, maybe Trump's already admitted, "Hey, we've been sneaking ships out of the strait regardless, so we don't really care."
>> [sighs]
>> Inflation, core inflation's good, but the other inflation, can it, will it come down? And, you know, Kevin's talking next week, the Fed chairman, what does this look like for the rest of the year? You know, maybe this is where the market does move into incredible higher zones here. So, I think everyone should be very excited in these dips that we've seen here. Even if we have another dip here leading into next week, even before Kevin talks, which is very possible because the general market could just go freaking crazy Friday, Monday, Tuesday of next week. Um, and then, you know, right before Kevin talks, there could be some fear in the market, might sell off again.
But with that, you know, this is a place of where, you know, the market, if, if Kevin says the right things here, the market may really, really surge again, and we may go right back in these all-time highs. Small caps, mid caps, big caps, the MAG, everything may just start getting some heavy attention again. And Big Bear, um, I, I think this is an incredible buy zone for Big Bear. If you're in Big Bear to hold this for the long term of this year going into next year. Um, and two, you know, don't forget we're going to be going into quarterlies here soon, you know, by mid-July, end of July here, where it's, we're going to Q2's. And I don't think anyone's really, especially from the s- bigger cap AI stocks to the MAG, all that, I don't think we're worrying too much about, you know, quarterlies being passed. Um, it's just how aggressive they're going to be.
And the thing is now, what we're seeing is this place of, well, a lot of these big AI companies like Oracle, for instance, just beat quarterlies. But then they came out and said, "Hey, we're going to spend $20 billion, too." Well, this is, this, this is where the market's not liking that. You know, the market just wants these companies to keep all the money and keep rolling. Of course, it does. So, this is the pushback we're seeing from the market right now. And for me, when you see this, obviously, I think the smart thing to do at this point is sell before quarterlies, right before it, and then readjust, buy back in afterwards. I mean, this has been with everything. I mean, this happened in video, most of the MAG, um, Oracle just the other day, um, even Broadcom. You know, this, it's not like they're reporting bad quarterlies. It's just this place of like, these, they're having to build so much new infrastructure. Of course, they're going to have to spend money. Tesla said that, too. Um, but it's good because it's going to make these companies so much more money, too.
But Big Bear right now, I think this is a place of where Big Bear is at the right place, at the right time zone, where they obviously can come out with bigger and better quarterlies this year. Um, I, I think it's a shame that Big Bear's not getting more attention. I think it's a shame that Big Bear's not getting more deals. And this is a place of where if this next five-year outlook with Big Bear does not work, I don't know what it's going to take for it to work. Because this is a place of where Big Bear's very much, you know, it's, it's owned this, it's eating the crumbs right now of what these bigger companies are doing. And it should be getting more attention. It's literally like it's in the castle, but it's still not knighted yet, you know, it's still not a knight. And it's kind of wandering around trying to get seen by these, you know, these bigger investors, these bigger firms, these bigger retail investors. And I think that's going to happen, but obviously that they've got to get some, they've got to get some deals in here. And, you know, one thing you see with a lot of big stocks that start to take off companies is that they have one or two big juicy contracts. And that's kind of what I'm hopeful for Big Bear is that, you know, even if it's another government contract, that it's just a juicy contract. It's like a 2, 300 million dollar contract spread out over two, three years. That would still do significant changes to their revenue, 100%.
So, um, I'm incredibly bullish on Big Bear that this can work. I still think it's an ace up the sleeve with investors. You know, it's, it's not going terrible. That's the thing. It's just kind of like we're just waiting for more. We're, we're, we're waiting for Big Bear to press down on the gas and hit the next gear. And, you know, are you willing to go along with that ride?
Let's watch this video, uh, cuz everyone's talking about it. And I love just listening to other people in the general stock market. It's such a great big ocean of great investors. And I'm, I just love to listen to analysts and investors.
>> lower this morning. Is this just a market that continues to shrug off any kind of, you know, renewed possibility of conflict?
>> Yeah, we've been shrugging it off because every time it escalates, it de-escalates quickly. Uh, we haven't, you know, when we get news of a chopper down, then the knee-jerk reaction is to sell off. And then, you know, we attack, it's, we're negotiating a deal, we're two weeks away, whatever it is. But, uh, the market has shrugged it off. Uh, the higher for longer oil narrative, uh, that is going to be the issue as we see inflationary numbers going forward. But, for now, uh, we have seen, uh, the market shrug it off pretty nicely. And now, we're just focused on the technology sector in the SpaceX IPO tomorrow. And I know you got this covered, so I can't wait to watch, uh, how you cover, uh, that.
>> Oh, well, we're going to cover it here, too. And I want to get your thoughts. But, but first, Steve Grasso, um, I, I do want to get your thoughts on picking up what Jay just said about what we're seeing with inflation. We had our CPI yesterday, which was a little bit softer than ex- expected, but still marks an acceleration. You still are seeing these higher energy price impacts move into some of the other pieces of the inflationary puzzle here. How important is PPI, producer price index, going to be as a leading indicator this morning?
>> Yeah, they're all important. And it depends on which, which way you look at it. But, any way you look at inflation, any gauge or any data point, 60% of it is a cost push, which means that there's nothing the Fed can do about it. So, if you think about what, whichever the Fed chooses to look at, 99% of the economists and the market participants say a rate cut's off the table. I don't think it's off the table just yet. If, if you, you, if you think who it hurts, it hurts the lower-income, uh, households if you raise rates right now, and it's nothing, uh, to do with supply. You're not going to increase any of the infrastructure. You're not going to increase any of the barrels per day. We went into this in an oversupplied state. That's why oil cannot rally above 100. Yes, there's still a tail risk, but I think downside is probably what we see first.
>> Yeah. I mean, so, so you could debate what we're going to see from the Fed here, Tom. Um, expectations though pretty well priced into the market is that the ECB is going to raise rates this morning, and of course, we know a pickup in inflation has been more of a global phenomenon, but how is that factoring into the markets, especially when we are talking about a certain amount of FOMO, whether it's SpaceX or otherwise?
>> Well, the bonds haven't really, you know, I'm going to agree with the last, last comments. The bonds haven't moved at all. They're still trading wrapped around 112, and I think we're right now, we're in a gray area. We're in like no man's land.
>> Mhm.
>> And so, I think when you look at the tape action in there, which I think is the real thing. I don't think the Fed can raise rates here, and I don't think that they can lower rates. I think it's, they're just in a holding pattern. And there's not a lot of trade in either the short-term paper or long-term paper right now. We're just kind of wrapped in a very narrow range. Until we move that break down under 110 on the bonds or go back up over 113, 114, I don't think there's much there to to trade or talk about.
>> Yeah. Okay, so what we can trade or talk about potentially is the SpaceX IPO to go back to that.
>> [laughter]
>> To go back to that, Jay.
>> like to push back on Mr. Grasso before we go there. I would be shocked beyond words if we cut sometime this year. It's going to be fascinating though to watch Kevin Warsh, my good friend Mr. Grasso back from the New York Stock Exchange, might I say. This would be a nice conversation down there, but
>> me mix the market.
>> Yeah, this is what we do, but I'm more focused on the language, and I think the bottom market will be the tell. I'm watching the 4.6 level in the 10-year, and if we break above that, then it could spell a little bit of near-term doom for equities, but we'll, we'll have a wager on cut cuz there's
>> Well, let's, let's put it in perspective. I'm not saying they're going to cut it this meeting. What I'm saying is cuts are not off the table for 2026. Whenever you have, you have raised rates into a supply shock, they've always had to reverse on their decision.
>> Well, let's see the
>> the language because they couldn't even agree on that. So, it's going to be fascinating. But, what's also fascinating is SpaceX, and we've seen a lot of people speculate, a lot of the selling, especially in the queues, has to do with people getting ready for SpaceX. What I'm worried about is that after market. How is it going to trade once it goes to the public? We have a big retail investor base now that's going to be invested in this stock, and are they going to hold it? Are they going to dump it? It's going to be one of the more volatile events. They'll write books about this one, and to try to predict what's going to happen, I think it's going to overshoot its skis quickly, and then that pullback is what is going to be very interesting to watch.
>> Okay, Tom, I want to get your thoughts on this.
>> I'm in the camp that I wish I was participating as a retail investor on the IPO. I don't know if I am or not yet, but because I think it's going to gap up and higher, but it's the stock that I would not want to own, you know, past, you know, selling on the opening or selling some point later tomorrow or or Monday. I don't think this is at these levels. I think it's overhyped, overpriced, it will be. And it really depends where it opens. I mean, if it if it stays in the with a with a one handle in front, so it's in the 100 handle somewhere, then I think, you know, maybe you can buy a dip. I think if it's in somewhere up closer to 200 or something like that. Um, or even higher, I don't know why anybody would want to hold it up here. I don't, I don't like the risk reward at at any level that's that's kind of a pop after the opening.
>> Yeah, I mean, Grasso, it's, uh, it's interesting too because Tesla, its sister company, is actually down so far this year. And it's down double digits just over the past month as well. I mean, we've got a Cal-shaped chart, throw it up real quick here. Um, I know we're about to end the show. Um, but, you know, there's still this expectation that eventually these two names are going to merge. Um, so, whether it's that or whether it's Oracle or whether it's Adobe after the bell, overall, all the spending, all the focus on tech on tech, your final thoughts.
>> Yeah, so, so as long as the spending stays, the market stays higher. But, let's go back to SpaceX. Within 15 to 30 days, 30% of the float's going to be held by, uh, the indices. And if you think about it, you might not get that real quick pop, but you have the cavalry coming with a lot of passive investing. This could shock a lot of people and move higher in the first month.
>> Exactly. That's what I think's going to happen. I think, you know, the first initial open tomorrow will be interesting, but I think once the 30-day rule is over, where if you don't break the rules, I think, you know, the cavalry is coming. I think I think it's going to be like Braveheart. We're going to people are going to be lining up, and once that time period is over, it's going to be and that [snorts] thing, you know, SpaceX could go to $500. And yes, it's crazy, the price range, mathematically, all that, blah, blah, blah. I know, but, um, this is probably what we're looking at here. It's going to go to insane prices. Why wouldn't it? We've seen crazier. We've seen crazier.
And you know, if you think that's crazy, we've still got Open AI. We've still got Anthropic. Anthropic, oh my god, what is Anthropic going to look like? Um, it, it's a wild time, friends, but, um, I made this short and sweet video. I, I congratulations [snorts] pre, I'm just pre-telling you. I think this is going to be a wild time tomorrow, next week. Uh, I think the market's about to come back to life if they get a deal done. And I know that sounds, we've been here many, many times, but if they go to get a deal done, get this straightened up for good, or even if we take some of it over, even stocks like SoFi are going to rally like crazy. Um, it's going to be very interesting. Take care of yourself, friends. Bye-bye.