Good morning,
A momentous event is upon us today—no, not a peace agreement with Iran, but rather the largest IPO in history: SpaceX. Any Morning Note written this morning would be hard-pressed not to mention it, so here are a few Bloomberg highlights to satisfy the curiosity of Elon enthusiasts—or perhaps simply add another layer to an already unbelievable financial landscape (Bloomberg)
- SpaceX has raised $75 billion in its IPO, pricing 555.6 million shares at $135 each.
- Shares are indicated to open approximately 35% above the offering price when trading begins on NASDAQ at 10:00 a.m. ET.
- The company’s implied market capitalization is $1.77 trillion, with founder Elon Musk’s net worth increasing by roughly $275 billion.
- Demand reportedly exceeded four times the available shares, with retail investors alone placing more than $100 billion in orders.
Moving on to the broader markets, stocks extended their rally overnight while oil prices fell to their lowest levels in months following fresh evidence that a provisional agreement to end the conflict with Iran may be nearing completion. A G7 official indicated that an agreement could be signed as soon as Sunday, while Iran’s Foreign Ministry told state-run media that a framework text is nearly finalized.
For now, markets appear increasingly confident that some form of agreement will be reached over the coming week. Whether it ultimately resolves the more difficult issues surrounding Iran’s nuclear ambitions remains an open question. In the short run, however, global markets care less about the details and more about the continued flow of oil through the Strait of Hormuz. The Strait appears likely to remain open; how open and for how long remains uncertain.
Markets have been volatile this week, and performance across regions has been far from uniform. Week-to-date returns stand at:
- S&P 500 Index: +0.15%
- Nasdaq Composite: +0.40%
- Russell 2000: +3.11%
- EAFE (International Developed Markets): -1.24%
- Emerging Markets: -2.99%
If a U.S.–Iran agreement does materialize, the most likely market response would be a continuation of the current rally—hopefully a broader one—accompanied by lower volatility and renewed participation beyond the largest U.S. technology stocks.
Have a nice weekend
Be well,
Mike