The hype around the SpaceX IPO has been incredible. Although stock indexes have rules to delay the listing of an IPO for a year to ensure that the new company is stable and profitable, three out of four indexes broke their own rules to list SpaceX.
https://www.nytimes.com/2026/06/12/upshot/spacex-stock-ipo.html
How Much SpaceX Are You About to Own?
If you have index funds — such as in a 401(k) — they may soon include shares of the mega company.
By C.J. Robinson, The New York Times, June 12, 2026
A lot of Americans are about to own a sliver of SpaceX.
The company completed its initial public offering Friday in the world’s largest stock market debut — and in a few days many personal and retirement investment accounts will have a stake in it, largely through index funds that track the broader market…
Some indexes have changed their rules to more quickly include new mega I.P.O.s in their baskets of stocks, on the idea that these companies are now often more mature, more integrated into the economy and less volatile at the time they go public. The CRSP U.S. Total Market Index, which is used by large investment management companies like Vanguard as a benchmark for index funds, is planning to integrate the company five days after its market debut. That’s one reason many average investors will have a stake in SpaceX very quickly…
The Nasdaq-100 index, while not common in retirement accounts, is set to introduce SpaceX 15 trading days after the I.P.O. It is even multiplying the value of SpaceX by three to account for a low initial “float,” or number of shares available for investors — so people who invest in the Nasdaq-100 (by holding the QQQ E.T.F., for example) will have a bigger stake in the company.
The S&P 500, however, is sticking to its current rules and will evaluate SpaceX for inclusion after about a year…[end quote]
The Faulty Logic Behind the SpaceX Index Trade
There used to be a reliable additional bump from admission to indexes, but it has become less certain recently
By James Mackintosh, The Wall Street Journal, June 14, 2026
There are lots of reasons people bought SpaceX’s SPCX 19.22%increase; up pointing triangle $1.8 trillion IPO, including faith in Elon Musk, hopes for the first-day pop and, perhaps, a belief that it will one day profit from colonizing Mars. One idea that’s popular even with those who think the stock is wildly overvalued is that early entry into the Nasdaq-100 and several other large indexes is virtually a guarantee of free money.
The trade works like this: When SpaceX joins an index, funds tracking the index have to buy no matter the price. So if you buy in advance, you can then sell to the index fund at a higher price when it joins, which will be on Friday for some of the indexes. The demand part of the logic is impeccable, and index arbitrageurs have long done exactly this, albeit with risks that make it far from guaranteed money.
But when it comes to the rest of the supply-demand balance that sets the share price, the closeness of the IPO to the index admission makes it much less likely to work than usual…
What we can be confident about is that if there is any jump at all from index buying, much of it will unwind again shortly afterward. [end quote]
For context on its debut, the IPO officially priced at $135 per share, but demand pushed the stock to open on Friday at $150 per share, valuing the company at roughly $1.77 trillion.
SpaceX is currently not net profitable on a GAAP (Generally Accepted Accounting Principles) basis due to massive capital expenditure. According to its public IPO filing documents:
-
Full-Year 2025: The company reported a GAAP net loss of $4.94 billion on revenues of $18.64 billion.
-
Q1 2026: The trend accelerated, with a net loss of $4.28 billion for the first quarter alone.
SpaceX doesn’t have a P/E ratio because it posts losses, not profits. Of course, it doesn’t distribute a dividend since it’s sucking the cash flow from its profitable Starlink business (generating $4.4 billion in operating profit in 2025) plus losses to reinvest directly into rocket development, global satellite coverage, and AI infrastructure.
Since SpaceX isn’t in the S&P500 it isn’t included in the CAPE chart which shows that the IPO was brought to market at the peak of a historic stock market bubble.
In the real economy, the big story is inflation.
This is way above the Federal Reserve’s 2% target.
The Atlanta Fed’s Latest GDPNow Estimate for 2026:Q2 is 3.3%, a strong reading which is rising along with the “Blue Chip Consensus.”
The high inflation and strong economic report will cause the FOMC to take any fed funds rate cut off the table, despite pressure on the new Fed Chair Kevin Warsh from President Trump. The options market predicts an 80% probability of at least a 25 bps rise by a year from now and likely sooner.
Treasury yields are in a rising trend following inflation. The 10-Year Real Interest Rate is still in a channel between 1.5% and 2% which started in late 2022. But the 10-year TIPS yield is rising which shows the bond market is reacting to other factors than inflation, such as rising government deficits. This predicts rising long-term yields since bond investors don’t want to suffer the high losses from long-term bonds if interest rates rise.
Long-term bond yields directly impact the mortgage and commercial markets much more than the fed funds rate.
The Chicago Fed’s National Financial Conditions Index (NFCI), which provides a comprehensive weekly update on U.S. financial conditions in money markets, debt and equity markets, and the traditional and “shadow” banking systems, is stable and loose though slightly tighter than early 2026.
As last week’s Control Panel predicted, there was a thunderstorm in the stock market but it seems to be clearing. The Fear & Greed Index is in Fear. The trade has been risk-off for the last couple of weeks as the SPX and junk bonds are falling faster than the price of the 10-year Treasury. Too soon to say but that may be turning around.
USD, copper and natgas are rising. Oil has stabilized. The gold and silver bubble seems to have popped. Bitcoin is bouncing along the bottom.
The Knicks won the World Series, bringing ecstasy to New York sports fans like the year the Mets won the Stanley Cup in 1986 or the Giants won the Wimbledon in 1987.
The METAR for next week is sunny.
Wendy
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
