View the video of this post here.
The most important charts and themes in markets and investing…
1) The Biggest IPO in History
SpaceX officially became the biggest IPO in history, raising a total of $85.7 billion. That’s $60 billion more than the 2nd largest IPO, Saudi Aramco ($25.6 billion raised in 2019).
At the $135 per share IPO pricing, SpaceX was valued at $1.75 trillion.
It opened for trading last Friday at $150 per share and this morning traded as high as $225.
That pushed its market cap up to nearly $3 trillion, surpassing both Amazon and Microsoft to become the 4th largest company in the world.
Over the last 12 months:
-Amazon generated $91 billion in net income on $743 billion in sales.
-Microsoft generated $125 billion in net income on $318 billion in sales.
-SpaceX generated a $9 billion net loss on $19 billion in sales.
SpaceX is a undoubtedly great company and will go on to do many great things. But months from now we’re likely to look back at this moment as peak mania. Investors are valuing SpaceX stock as if its incredible future has already happened. Trading at over 150x sales, there’s simply no margin for error in a world where there’s always some error.
2) When Will SpaceX Be Included in Major ETFs?
The S&P Dow Jones committee voted against changing its index inclusion rules to fast-track SpaceX ($SPCX) into the S&P 500. That means SpaceX must trade for 12 months, record 4 consecutive quarters of GAAP-positive earnings, and meet strict float requirements before it is eligible for inclusion.
So three major ETFs that track the S&P 500 ($VOO, $IVV, and $SPY) will not have SpaceX as a holding for at least 12 months.
But many of the other major index ETFs will hold SpaceX much sooner:
-Total Stock Market ETFs ($VTI, $ITOT, $VT): 5 trading days.
-Growth ETFs ($VUG, $IWF): 5 trading days.
-MSCI ETFs ($ACWI): 10 trading days.
-Nasdaq 100 ETF ($QQQ): 15 trading days.
None of the major ETFs will hold SpaceX at its market cap weight, which would be close to 4% of the US total market given its $3 trillion market cap. Instead, they will do a free-float adjustment (less than 5% of the company’s shares were floated). That means the indices will will reduce the SpaceX weighting down to 0.2% for total US market index funds and up to 0.6% for the Nasdaq 100 Index (they can multiply the free float weight up to 3x).
3) 1999-2000: The Only Comp Left
Here are the only times in history where the Semiconductor Index gained more than 230% in a 14-month span:
-December 1998 – February 2000
-April 2025 – Today
That’s the entire list.
Micron is now trading at over 21x Sales, which is more than double its peak valuation during the dot-com bubble (10x).
Back in 2000, Micron traded at a low forward multiple because earnings were nearing a cyclical peak.
Then DRAM prices collapsed, earnings evaporated, and the stock lost over 98%.
Today, Micron once again looks inexpensive relative to its expected earnings.
The key question: are those earnings cyclical or structural?
4) Tech Dominance Reaches New Heights
The Tech Sector ETF’s recent 28% outperformance over the S&P 500 in just 9 weeks was its biggest 9-week outperformance ever, exceeding the parabolic move higher in late 1999 and early 2000.
That has pushed the Tech’s sector’s weighting in the S&P 500 up to nearly 40%, a record high. Back in March 2000 its weighting peaked at 35%.
5) The Reversal of Everything Continues
Given the dominance of the US tech sector this year, it’s remarkable that we’ve seen a reversal of all the major equity market factors, with Value stocks outperforming Growth stocks, Small/Mid Cap stocks outperforming Large Caps, and EM/International stocks outperforming the S&P 500.
Perhaps even more remarkable is the fact that the Magnificent 7 ETF ($MAGS) is actually down on the year and since the start of 2025, 5 out of the 7 members of the Magnificent 7 have underperformed the S&P 500. Only Google and Nvidia have outperformed.
6) Rising Inflation and a Decline in Prosperity
US CPI rose to 4.2% in May, the highest inflation rate since April 2023.
Over the past 5 years, Consumer Prices have rose 4.5% per year and over 24% in total.
Here’s a breakdown of cumulative price increases over the past 5 years…
For the first time since 2023, we’re seeing prices in the US rise faster than wages, a decline in prosperity for the American worker.
7) What the Fed Will Do vs. What the Fed Should Do
The first FOMC meeting under new Fed chair Kevin Warsh is tomorrow.
What will they do?
Hold interest rates at 3.50-3.75%.
What should they do?
Hike interest rates.
Why?
Inflation has averaged more than 4% per year since the start of 2020, which is more than double the Fed’s 2% target.
Australia, Norway, Denmark, the ECB, and the Bank of Japan have already started hiking rates to attack higher prices.
With an Inflation Rate now 0.6% above the Fed Funds Rate, the Fed should do the same. They are once again behind the curve.
8) A Few Interesting Stats…
a) Adobe is now down over 70% from its peak, the biggest drawdown in the stock since 2002.
b) In May, the US Federal Government took in $336 billion and spent $628 billion. Don’t try this at home.
c) The Interest Expense on US Public Debt hit $1.3 trillion over the last 12 months, another record high. If it continues to increase at the current pace it will soon be the largest line item in the Federal budget, surpassing Social Security.
d) Spending on data centers and other AI infrastructure by Google, Amazon, Microsoft and Meta is expected to hit $670 billion this year. At 2.1% of GDP, that would represent a higher share of the economy than the investment in the US railroad expansion during the 1850s.
e) Apple is now trading at over 10x sales, the highest valuation level in company history.
f) The Dividend Yield on the S&P 500 ETF ($SPY) has moved below 1% and is fast approaching the all-time low yield of 0.94% in 2000.
And that’s it for this week. Thanks for reading!
Every week I do a video breaking down the most important charts and themes in markets and investing. Subscribe to our YouTube channel HERE for the latest content.
Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. Read our full disclosures here.
PakarPBN
A Private Blog Network (PBN) is a collection of websites that are controlled by a single individual or organization and used primarily to build backlinks to a “money site” in order to influence its ranking in search engines such as Google. The core idea behind a PBN is based on the importance of backlinks in Google’s ranking algorithm. Since Google views backlinks as signals of authority and trust, some website owners attempt to artificially create these signals through a controlled network of sites.
In a typical PBN setup, the owner acquires expired or aged domains that already have existing authority, backlinks, and history. These domains are rebuilt with new content and hosted separately, often using different IP addresses, hosting providers, themes, and ownership details to make them appear unrelated. Within the content published on these sites, links are strategically placed that point to the main website the owner wants to rank higher. By doing this, the owner attempts to pass link equity (also known as “link juice”) from the PBN sites to the target website.
The purpose of a PBN is to give the impression that the target website is naturally earning links from multiple independent sources. If done effectively, this can temporarily improve keyword rankings, increase organic visibility, and drive more traffic from search results.
