SpaceX Fever Rises, Oracle's AI Exposure 6/11/26

 This message comes from Viking committed to exploring the world and comfort journey through the heart of Europe on an elegant Viking long ship with thoughtful service, destination focused dining and cultural enrichment on board and on shore and every Viking voyage is all inclusive with no children and no casinos discover more at Viking.com.
 The US strikes, Oracle spends, and futures shrug all of it off. I'm Morgan Brennan and this is your morning call.
 Good Thursday morning. What a difference a day makes after the day was worst day since October in the S&P.
 Now at levels last seen five weeks ago, just a start day of selling for the major averages. You can see attempted rebound here this morning, sizably so.
 The S&P up 61 on 62 points, the doubt 360 NASDAQ, up 364. That of course was selling yesterday was was led by semis and other tech names and as you can see right there with the tech heavy NASDAQ leading the charge poised for a higher open this morning.
 NASDAQ's more than 1% gain pre-market coming despite Oracle moving lower after reporting fourth quarter results. We've got more on that trade in just a moment.
 You can see pre-market here, Oracle shares are down about 8%. We are also watching treasuries ahead of another inflation report today, another key report. This time it is PPI and economists are expecting a pop from 6% in April to 6.4% in May.
 So an acceleration there. As you can see, a mixed picture for treasuries right now, US 10 year treasury yielding 4.53%.
 And let's turn to energy as well because despite these renewed strikes by the US overnight, you can see energy prices are still under pressure, a bit of pressure here today.
 So WTI crude is down about 8% of 1% trading around 89 bucks a barrel. Brent is down a similar percentage trading around 92 dollars a barrel.
 Let's get to the Middle East now and the US launching that fresh wave of strikes against quote multiple targets in Iran.
 This is for a second straight day. This after President Trump accused Iran of dragging out talks on an interim peace deal.
 Now, according to US Central Command, the quote, self defense strikes occurred just after 5 p.m. Eastern time yesterday in response to continued aggression from Iran.
 Defense Secretary Pete Hegseth speaking with reporters yesterday on what's at stake.
 Iran has a chance to make a good deal, a great deal to codify what they said they've been willing to do and they haven't been willing to do it.
 Those strikes that will happen tonight will be strong. They will be clear. If they happen to happen tomorrow night, they will be strong and they will be clear.
 And throughout Iran has an opportunity to make a deal. That's the point.
 Well, let's get to our Dan Murphy and Abu Dhabi with the latest Dan.
 Morgan, good morning. US Central Command saying the operation targeted Iranian surveillance, communications and air defense sites that posed a threat to American forces and commercial shipping in the region.
 Explosions were reported at several sites across Iran and a map of those strikes really highlights the scope of this latest US action.
 Iranian state media reporting explosions in the south of the country from the port city of Bandar Abbas to Kesham Island and near the state of Hormuz as well.
 Now, Iran was quick to respond to. It declared the state of Hormuz closed towards shipping and warned that vessels entering the waterway could be targeted.
 President Trump has already rejected that claim saying Iran does not control the state of Hormuz.
 Tehran also claiming to have struck US linked targets and bases in Jordan, Kuwait and Bahrain. But those claims also haven't been verified.
 And Bahrain says its air defenses intercepted those attacks. In fact, I wanted to show you some images that have just been released by Bahrain's interior ministry showing several objects here.
 A burnt out car among them and damage to homes in Harmad city and the capital Manema authorities there say the damage was caused by falling shrapnel from intercepted Iranian drones.
 Of course, the cleanup effort there is still ongoing. You can see firefighters working to put out flames and also try and clean up what has been really, really damaging strikes.
 Notably, the UAE Saudi Arabia and Qatar do not appear to have been drawn into this latest ground of Iranian retaliation, which is also significant Morgan.
 All right, Dan Murphy. Thank you.
 Well, let's see how Europe and Asia are shaping up. Steve Sedgwick is in London with the action out of Europe and J.P. Young has the Asia trade from Singapore.
 J.P., let's kick it off with you.
 Good morning, Morgan. And those renewed geopolitical tensions in the state of Hormuz keeping markets in Asia.
 Anything but exuberant this Thursday with many major indices actually pulling back.
 Now, we did say a belated fight back from the likes of the Nikkei 225 in Japan and the South Korean cost me again.
 Those intraday gains, nothing really to write home about.
 The sector or one of the sectors that really bore the brunt of today's pressure that is or step back really were tech shares, everywhere from South Korea to Japan.
 With the one exception of SK hinders matched to close somewhat in the green.
 Could this be related to the reports that they might be seeking and listing of US ADRs in August?
 Anyone's guess but they matched the void, the sell-off that hit the tech space.
 Now, everyone here is also talking about that much anticipated SpaceX IPO that's about to happen out in New York.
 And none more so actually than Japan.
 In fact, there's about $14 trillion of retail assets parked in cash and a lot of healthy appetite from Japanese retail investors for US equities because of the perceived better yield they can get as compared to their Japanese markets.
 The $2.5 billion that's been allocated for the Japanese market seems to have been 4 times over subscribed now.
 However, Mizuhu Financial, the bank that's responsible for the Japanese portion of the IPO, they actually close significantly in the red in today's session, not benefitting from the exuberance it seems for the SpaceX IPO.
 Another linkage to watch out for is the South Korean one.
 There are reports now that at $1.5 billion worth of dollar linked orders related to SpaceX in South Korea have been cleared by regulars.
 And it took them a while because they were concerned that this demand for SpaceX might actually contribute more weakness towards the South Korean one which is already at its weakest level since 2009.
 And currency volatility and weakness also front centers among some of the top concerns for financial regulators in South Korea.
 So these are just a few ways they're actually linked to the SpaceX IPO.
 Overall, it's still going to be a quite interesting set up for markets in the US, a $1.7 trillion IPO coming online.
 And of course, the NICS also up 3-1 in the finals. So a lot of reasons for Wall Street to perhaps be excited this coming Thursday.
 Morgan, it's back to you in the morning.
 JP, I mean, you're speaking my language on both of these fronts but to your point.
 And both of them, really, unprecedented right now, whether you're talking about the New York NICS or if you're talking about SpaceX, which is just a massive, massive market moving to your point moment here.
 And it's all tied to one company with an industry that is still very much emerging or was seen until very recently by investors as emerging.
 It's pretty incredible. J.P. Young, thank you.
 Well, to Europe and a big central bank decision on tap, Steve Sedgwick is in London with more.
 Steve, are you a NICS fan too? Could that be?
 I'm just about to say, I was just about to say, Morgan, you read my mind. NICS, I know nothing about your American sports but look, come on America.
 You've got soccer ball coming to the start. That's what it's all about tonight. It's all about soccer ball.
 Beautiful.
 And if you haven't seen America, look at Ted Lasso, there's an American having a look at soccer ball.
 Okay, the beautiful game or whatever.
 Okay, look, Europe and Equities, are there a beautiful game this morning for some people? Yes.
 Broadly higher, coming off losses expected before the open of following that volatile Asian session that you and JP were talking about.
 Travel and leisure stocks are taking a bit of a hit amid growing uncertainty over the situation, of course, as we mentioned in the Middle East.
 So you've got the FTSE up, six tenths of 1%, similar gains across the board, the Italian market, the FTSE Mib up 1%.
 Well, it's all about this European central bank hike, potentially.
 Today, they are expected to hike over the ECB for the first time in nearly three years as policymakers deal with the impact of the Middle East crisis on energy prices and inflation.
 Headline inflation in the Eurozone rose for 3.2% in May as energy prices surged more worryingly for the ECB core inflation rose to 2.5% primarily driven by higher services costs, which could be the first sign of those second round effects.
 So America, my message for you is put away your baseball mitt, put away your NFL ball.
 Look at the big soccer ball for the next six weeks.
 It's going to be dominated by some of those big players.
 Maybe an America will do well as well.
 Yeah, we'll have to see Steve.
 I'm sure we'll be talking about all of it over the next couple of days and a couple of weeks.
 You said, Drake, thank you.
 Global markets have stumbled in recent days, largely led by big self and tech and chip stocks yesterday, also last Friday.
 But that could potentially build well for SpaceX as investors, maybe setting aside a lot of cash from some of those high flyers to throw at the company when it goes public tomorrow.
 Well, let's bring in Peter's single-hurst head of the private company's team at Bailey Gifford, which has been a long time holder of SpaceX across several of its flagship investment trust.
 And is one of the company's largest institutional backers?
 Really, Peter, one of the first institutional backers.
 I mean, what a moment we're coming into here with SpaceX.
 It certainly is.
 And it's an amazing story for SpaceX, the company.
 But I think it's also a culmination of a long-term structural change, which we've seen over the last 15 years of companies staying private for longer.
 And no company has stayed private for quite as long as SpaceX has.
 But it seems like this might well be a precedent for companies to stay private until they reach these kind of scales.
 Yeah, the first of Bailey Gifford trusts bought in Scottish mortgage, bought into SpaceX in 2018 at what I believe was a $30 billion valuation.
 We're poised for nearly $1.8 trillion valuation as we go to market here tomorrow.
 What do investors need to understand about what's going into that number?
 I think what investors need to understand is that any investment is never about one single possible version of the future.
 It's about understanding a range of scenarios that might play out for SpaceX.
 The probabilities that we can ascribe to those scenarios and the payoffs in the event of those.
 What SpaceX has been amazing at doing over the period that we've been fortunate enough to invest in it on behalf of our clients is testing and validating very, very difficult things, whether that's being a private rocket company, whether that was doing reusable rockets,
 Starlink, Starship, and Orbital Data Centers and the AI strategy for SpaceX is the next outlandish hypothesis that they are seeking to validates.
 If they're able to do that, the payoffs here can be significant.
 But investors also need to understand there's a range of outcomes here.
 And the XAI acquisition, the Orbital Data Center strategy widens the range of outcomes here.
 It increases the potential upside, but it also increases the potential downside and the risk associated with the business.
 It's interesting because Oracle's in focus given the fact that they continue to spend heavily on their AI infrastructure build out.
 In the near term, and I would actually argue over the longer term as they do begin to deploy these AI data centers to space, SpaceX is becoming a competitor to some of these so-called Neo clouds here, striking some of these compute deals that are going to pay money and help offset its own capital expenditures on a monthly basis here as well.
 And yes, the numbers are high when you look at the AI business at SpaceX and you also look at the Starship piece of the business at SpaceX and the capital they're deploying.
 But they're not high like Oracle and some of these other hyperscalers that are putting a lot of money to work.
 Is that a competitive advantage relative to some of the others in the marketplace that's not being understood well?
 SpaceX's competitive advantage comes down really to one very simple thing which is their cost of getting mass into space.
 They have brought that cost down orders of magnitude and it's opened up a series of opportunities and will continue to open up opportunities.
 But it means that they are able to do orbital data centers in a way that would be unfeasible for anybody else, the depth and the rigidity and the solidity of that competitive advantage is quite unique.
 It will give them a cost advantage in orbital data centers and I think there's a very strong case to be made that value is going to accrue for quite some time at that infrastructure level.
 I think we're starting to see it accrue at the foundational model level, the success of businesses like Anthropica I think are really proving that.
 But I think the SpaceX has a real shot at yes potentially taking share with its GROC models but I think more interestingly in having orbital data centers as a backbone of infrastructure facilitated by its unsurpassable cost advantage in launch.
 Yeah and finally just given the fact that SpaceX is held in a number of Billy Gifford trusts here. Is this a buy and hold for the long term does that does going public change that notion for Billy Gifford?
 We have a range of funds that own it in many of those funds the position size is now very very large.
 I think there is definitely appetite to continue owning SpaceX and the question will be what is the right position size for those strategies.
 Our public funds also have to come to their own decisions which are trying to do growth investing in both public and private markets.
 Some of our strategies have been fortunate enough to already own it and some have to make a new decision about whether to buy it.
 So you might well see us doing different things for different funds based on that portfolio context and that portfolio construction.
 Okay Peter single-hurst it's great to have you on to talk about this and what is a history making moment not only for the space sector and for SpaceX and Elon Musk but also for the markets globally appreciate it.
 Come back soon.
 Well sticking with the SpaceX IPO while Elon Musk is the founder CEO and CTO of SpaceX also the chairman of the board the vision to make humankind multiplanetary hinges with the execution of a formidable and we'll call it extra ordinary team of talent.
 Starts with Gwen Schottwell.
 Schottwell is SpaceX's president and CEO and engineer who has overseen everything from development of SpaceX's reusable rockets to the rollout and ongoing ramp of starlink to most recently the integration of XAI.
 Schottwell oversees the day-to-day at SpaceX and manages an army of 22,000 and growing full-time employees.
 She was one of the earliest hires joining SpaceX the same year that it was founded 2002 and ascending to the number two position in 2008 after playing a key role in SpaceX's first major government contract to resupply the International Space Station for NASA.
 Schottwell is one of SpaceX's eight board members it's a seat she has held since 2009 she's also a director at off-road vehicle maker Polaris but with IPO tomorrow she will be based on filings a billionaire as well.
 As one insider recently shared with me, Schottwell sees her role is pushing the boulder up the hill and musks as always making the hill bigger.
 She is critical to the SpaceX strategy especially now and tomorrow starting right here on warning call you will hear here directly from her starting five AM Eastern.
 My exclusive interview with Glenn when shot well SpaceX president and CEO and my discussions with her are the only journalistic interviews that anyone from SpaceX is doing for this history making milestone you don't want to miss it.
 A lot more to come here on morning call including oracles big pre-market drop and why it's AI spending plans are overshadowing and otherwise record breaking quarter plus.
 I believe it's time.
 All right we talked about it once we're going to talk about it again the next did it and a big way this time in front of a hometown crowd now one win away from the first championship in more than 50 years.
 Very busy hours still to come one morning call returns.
 Welcome back our stock of the morning that we're watching shares of oracle down about six and a half percent right now pre market moving lower despite a top and bottom line beat for its most recent quarter earnings guidance.
 Also better than expected although current quarter revenue a bit softer than expected investors instead focusing on the spending plans oracle says it expects to raise nearly $40 billion through a combination of debt and equity financing.
 2020 27 this after capital spending for 2026 top 50 6 billion or basically came in just under 56 billion dollars that was far beyond its internal target for 50 billion dollars and is expected to continue to grow here.
 Today's move shares are now often more than 47% from the 52 week high that was hit back in September.
 So joining now is Cleo capital managing director Sarah Kunst for more Sarah it's great to have you back on your thoughts on oracle.
 I feel like it's 1999 again we've got the nicks and the spurs and the final we have oracle being sort of the name on the street but it's not going to end like last time right first the next are going to win and to you know hopefully this doesn't turn into another giant tech bust.
 And so I think that the street right now is not thrilled with oracles over spending in round tripping but we've kind of known that for a while.
 So in light of that is oracle or harbinger of what we're seeing or could potentially see here across the broader AI landscape or is this a company specific story especially since so much of his backlog is so levered to open AI.
 I think it's certainly an open AI story I think that we're seeing that story play out where they went from being sort of the front runner and to kind of the dark horse of this unholy trinity of IPOs and so I think that that yeah the open AI weakness is going to continue to have a not great effect on oracle but oracles always sort of been tagged along and sort of pulled along in this AI bubble it's not sort of organic to their core business they decided to go in.
 To a business that could do very well with AI and now that AI spend questions are getting a little bit we're not so sure about it I think that you're going to see oracle sort of be one of those first ones to take the downside as well.
 I have one more question on this and how it ties into what we're seeing we're broadly across the market.
 And that is the other piece of it with oracle is the software business disappointments the legacy software sales decline 2% cloud software under performed expectations as well and together those revenues were only up about 2%.
 We're getting Adobe after the bell as well and we continue to have this sass and software shake out in the market I mean some green shoots arguably in the last month or two but just how does it speak to this landscape and the uncertainty in it for investors.
 I think it's not just tied to AI I think that people are looking at this sort of terrible consumer sentiment that gas prices you know midterms coming up and they are looking for places to cut costs.
 And so it's a good time to go dig around in sort of your sass spend receipts and say can we tighten our belts a little bit and I think we're going to see more and more of that I don't think it is sort of apocalyptic as some of my peers thought a few months ago.
 But I do think that we're going to see a steady drum beat of maybe we can be a little bit more thrifty.
 Okay Sarah const great to have you on thank you.
 Well as we had to break we ran out the former CEO of Exxon mobile has died Raymond's oversaw the biggest merger in the history of the oil industry when Exxon bought mobile in 1999 with the company eventually becoming the largest firm on the S&P 500.
 He also was widely criticized as the quote Darth Vader of global warming for his skepticism about climate change and his more than 300 million dollar retirement package we Raymond was 87.
 This message comes from Viking committed to exploring the world in comfort journey through the heart of Europe on an elegant Viking long ship with thoughtful service destination focused dining and cultural enrichment on board and on shore.
 And every Viking voyage is all inclusive with no children and no casinos discover more at Viking dot com.
 Checking some of the morning's latest headlines open AI is reportedly considering quote drastic price cuts as it looks to win customers over from rival and the topic.
 And according to the Wall Street Journal open AI may also lower prices for tokens.
 The discussions are still in flux of course to get some getting a lot of attention lately after a 10 day strike the UAW says it's reached deal with.
 Axel supplier douch corporation I hope I'm saying that right and it's three rivers plant in Michigan the company supplies axles to general motor full size and mid size pickup trucks union members are set to.
 Votes as on the new agreement which includes a 36% pay increase over the next four years. Microsoft is reportedly planning quote major layoffs at its Xbox division as soon as next month.
 As well as big cuts to its marketing budget if confirms the cuts would be the first major restructuring under the units new CEO who took charge back in February.
 And the Justice Department is reportedly looking into some of Wall Street's biggest banks including JPMorgan and Bank of America investigating whether or not the lenders legally dropped customers for political reasons.
 Well according to reports the debanking probe is being led by US attorney in Washington DC Janine pure and the New York Knicks are now one win.
 Are you sick of me saying this yet because I'm not sick of saying it away from their first NBA championships since 1970.
 23 after beating the San Antonio Spurs and game for Madison Square Garden to go up 3 1 in the series a racing a 29 point deficit in the second half to 107 to 106 is the biggest comeback in NBA finals history.
 And while investors are paying attention were pushing shares of Madison Square Garden sports to an all time high.
 But even amid yesterday's sell off and you can see up again this morning.
 Well, so reviewers handing the NBA ESPN and ABC the largest game three audience since Michael Jordan and the Chicago Bulls beat the Utah Jazz back in 1998 with more than 24 million viewers.
 And I'll keep talking about the 90s or back. Here we go again still on deck.
 Issuance may be down, but proceeds are surging. I look at what's been a record breaking year for companies going public and the stellar set up ahead of space.
 Next tomorrow morning call. We'll be right back.
 I'm Morgan Brandon. Welcome back to morning call. Let's get a check on US stock futures, which are bouncing after the Dow's worst day since October.
 You can see S&P up 58 points down up almost 400 and the Nasdaq bouncing back here at 317 pre-market.
 Nasdaq's more than 1% gain pre-market is coming despite Oracle moving lower after reporting fourth quarter results.
 We're going to have more on that coming up. And you can see those shares are down about six and a half percent pre-market.
 But if we could check on energy to the US launching a fresh wave of strikes against multiple targets in Iran for a second straights day.
 You can see energy prices are nonetheless under a bit of pressure here this morning. WTI crew down about half a percent trading around $89.50 a barrel and Brent also lower under 93 bucks a barrel.
 We're also watching defense stocks, names like Lockheed Martin, Northrop Grum and General Dynamics, RTX, L3 Harris, also HII.
 All these are down between three and a half and 25 percent since the war began.
 That's compared to the S&P's 5.5 percent gain. Keep in mind there's a big run up in defense stocks ahead of Operation Epic Fury starting.
 But over the last year, as I mentioned, they are all up big.
 So Treasuries ahead of another inflation reports today. Let's get a check there with PPI on deck.
 Economists expecting a pop from 6 percent in April up to 6.4 percent in May.
 Of course, seen as a leading indicator to a certain extent here for CPI, which we got yesterday as well.
 So yields mixed across the curve, US 10-year treasury, a bit lower, 4.53 percent.
 Checking global markets to a mixed session in Asia with the Nikkei and Cosby leading the gains.
 Markets in Europe are working to edge higher in early trading, meantime as well, fractionally.
 And let's dig further into what's been a whipsaw week for the markets.
 Heading into the SpaceX IPO. Let's bring in Jay Woods, Chief Market Strategist at Freedom Capital Markets.
 He's also CNBC contributor and Jay is doing a double duty today.
 But first, let's run through the charts and what you're saying.
 Let's start with S&P 500. We sound like 5 percent.
 Yeah, about 5 percent. But we're getting crazy headlines, a little panicky.
 But what we've seen is a heck of a run and now we're breaking that long-term chart, that 20-day moving average, which traders watch pretty religiously.
 And now we're getting back to that 50-day moving average, which comes in right here around 7200.
 Oh, there you go. You drew it for me. It makes my life easy.
 So what we want to see is a little consolidation, a little digestion.
 We may get a little bounce today to start the day.
 Doesn't mean we're going right back to new highs. I think after a run like this, we're going to see some sideways action.
 Where I really like the charts is the S&P equal weight.
 Yeah, we've seen rotation. We've been led by tech, obviously.
 We know the whole story. Technology has just gone on this run.
 But what we're not seeing is the equal weight. And what we have is a little rounded bottom breakout.
 To me, this is phenomenal. And as you see these other stocks rotate, we're going to look for any pullbacks for an opportunity to buy the equal weight.
 Because technology continues to be under pressure.
 A lot of talk about SpaceX, people selling stocks in the cues, because that's going to go in 15 days after it goes public.
 So we got to watch that. And then speaking of the cues, this one went parabolic.
 We had a 35% raise from the load to the high in such a ridiculous amount of time.
 Pullbacks are normal. 5% correction. We're about 6% right now.
 I would expect this to consolidate a little under the 700 level before we see any rally.
 And then lastly, we have to talk about Madison Square Garden.
 Yes, we do. I want to bet it. I missed this epic comeback.
 But the stock has been on a run. It's up over 100% from its low.
 This may not be a technical take. That's quite a run.
 If they burn down the garden, it could sell off.
 We'll see what happens. But I would probably look to buy this on a little bit of weakness.
 I would not chase the stock up here. But you can't count out anything in Madison Square Garden lately.
 It just continues to climb higher, whether it's the next being down 29 or this stock consolidating breaking out.
 It looks good technically, but I probably wouldn't chase.
 Yeah. And James Dolan, he's gone from not the most popular guy in New York to probably the biggest celebrity.
 Well, no doubt. Just the time for this stock run.
 No doubt the sphere. It's crushing it.
 All right. Thank you.
 Thank you. I'll see you soon.
 I'll see you soon.
 I'll see you soon.
 Part of Morning Call crew that is coming up in the meantime.
 We got a lot more to come here on Morning Call overall.
 We got more on that SpaceX public market debut while our next guest known as Mr. IPO says the bar may already be too high.
 We're going to dig into that. We'll be right back.
 Let's turn back to SpaceX's IPO. It's the largest offering in history for which the world will get final pricing and deal size details after the closing bell tonight.
 Shares priced at what's been described as a ticket or leave it $135 a share.
 Low probability that that changes could.
 But higher probability that that small float that that could get up size given the off the charts demand globally.
 So where does SpaceX stand versus other major offerings?
 Well, according to Renaissance, 71 companies have gone public so far this year.
 Total proceeds raised have hit $35.7 billion.
 That's up nearly 165% from a year ago.
 Just before this IPO tomorrow, SpaceX alone is expected to raise at least $75 billion more than double the amount of all of those other IPOs so far this year combined.
 Before SpaceX, the largest global IPO on record was Saudi Aramco at $25.6 billion raised in 2019.
 The largest in the US listed IPO was Alibaba at $21.7 billion and that was in 2014 before that it was visa at $17.8 billion in 2008.
 For more on SpaceX's historic offering, let's bring in Jay Ritter, professor at the University of Florida's School of Business, the director of the IPO initiative there often referred to as Mr. IPO.
 Professor, it's wonderful to have you on the show. Welcome to you.
 What are you watching coming into this milestone tomorrow?
 Well, the first day of trading is obviously going to get a lot of attention.
 Given the strong demand, there's a very good chance that this is going to be jumping up, leaving a huge amount of money on the table.
 Right now, visa is the US headquartered company that has had the biggest dollar amount of underpricing.
 Alibaba, even more than that, but SpaceX is almost certainly going to blow them away.
 Yeah. What do you think about the valuation in here at just under $1.8 trillion before final pricing tonight?
 I mean, there's a lot of ways to splice and dice this, but trading at 40 times estimated 2026 sales, 170 times EBITDA as well.
 What are the metrics that matter the most and how do you value a company that really doesn't have a lot of other comparables in the market here?
 My main metric is price to sales given that this company as well as the AI giants currently aren't profitable.
 They're growing rapidly, but SpaceX is being valued not on the past, but what could be?
 There are a lot of heroic assumptions that go into the $1.8 trillion valuation, but there is a possibility that the company is going to be able to execute a lot of its goals and become enormously profitable.
 I think a lot of the messaging from SpaceX leadership along the way on the road show, and I would expect this to continue, is that yes, they're going to show up and deliver the metrics and the financials on a quarterly basis, but that this is really a bet on the future, and if you're buying into SpaceX, you're thinking about or betting on where this is going to go five years from now, 10 years from now, etc.
 So in light of that, what are the comparables in the market here? How should investors try and wrap their arms around a name like this?
 This is obviously unique. In terms of rocket launches, they've already got an 80% market share with Starship that's likely to go to 100% due to the very low launch costs relative to the competition, but that's not an enormous market.
 But the lower launch costs are going to allow Starlink satellites to be put up at lower cost, allowing Starlink internet access to be available at lower cost.
 They're getting very good growth margins on that, and that could explode to be a much bigger business.
 The data centers in space are much iffy year in terms of whether the technological hurdles will be able to be overcome there.
 I mean, obviously this is also a rewriting arguably of the playbook for retail investors too with a record allotment going to retail here as well, and then of course some of the other changes that are coming with this IPO, and the fact that it is such a massive valuation coming into the company,
 and to the market here, what does it mean for retail investors?
 And I asked this knowing that just in the last 48 hours, I've had children's parents ask me about this. I've had an Uber driver ask me about this.
 I could keep on going down the list here, but there's just a huge amount of appetite. It's not just from Wall Street, it's also from Main Street, so how to think about this grand experiment in this offering for retail investors too?
 Well, with the retail tranche, that's going to be something like 25 billion dollars of shares that retail investors are able to buy, which is bigger than the largest IPO in US history by itself.
 So there's a reason that lots and lots of individual investors, not just high net worth clients, but mom and pop investors are going to be able to have access to this.
 But a great company doesn't necessarily mean it's a great stock while the company's got lots of upside potential for other high growth companies that have had really high price to sales ratios.
 Not everything has gone according to plan.
 All right, Professor J. Ritter, aka Mr. IPO, great to have you on, appreciate it.
 And of course, this is just the first in a very hefty pipeline of IPOs potentially before the end of this year.
 Well, in the meantime, starting tomorrow, 5am Eastern, tune in for my exclusive interview with SpaceX, president and COO, Gwen Shotwell.
 My discussions with her are the only journalistic interviews that anyone from the company is doing for this history making IPO. You don't want to miss it.
 It all starts tomorrow right here on warning call.
 Here's what to watch today. We get fresh inflation data with PPI. Also, we're watching for initial jobless claims.
 The ECB hands down its latest rate decision this morning to talk about that, expected to hike.
 We're going to get earnings from Adobe and Lanar, also RH.
 And at 10am Eastern, Dohmist, David Faber's exclusive interview with Prometheus co-founders and co-seos, Jeff Bezos.
 And Vic Bezos live from the company's headquarters.
 The timing on that is certainly interesting ahead of the IPO tomorrow for SpaceX, a key rival for Jeff Bezos other company.
 It's time for your call sheet, where we look at the topics driving the trading day ahead.
 The crew members today, Grasso Global CEO and CBC contributor Steve Grasso, lost dog co-founder and CEO Tom Sausner.
 He's also the creator of Thinkor Swim. And back here on set is Jay Woods. So let's start with you Jay.
 I want to start with what we're seeing in the middle of Eastern and flaring geopolitical tensions again. And yet, oil slightly lower this morning.
 Is this just a market that continues to shrug off any kind of renewed possibility of conflict?
 Yeah, we've been shrugging it off because every time it escalates, it de-escalates quickly.
 When we get news of a chopper down, then the knee jerk reaction is to sell off.
 And then, you know, we attack, we're negotiating a deal, we're two weeks away, whatever it is.
 But the market is shrugged it off. The higher for longer oil narrative, that is going to be the issue as we see inflationary numbers going forward.
 But for now, we have seen 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 how you cover that.
 Oh, well, we're going to cover it here, too. And I want to get your thoughts.
 But first, Steve Grasso, I do want to get your thoughts on picking up what Jay just said about what we're seeing with inflation.
 And the PPI yesterday, which is a little bit softer than 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 way you look at it.
 But anyway, 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 could 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 cuts off the table.
 I don't think it's off the table just yet.
 If you think who it hurts, it hurts the lower income households if you raise rates
 right now.
 And it's nothing to do with supply.
 You're not going to increase any of the infrastructure, you're not going to increase any of the
 balors 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 you could debate what we're going to see from the Fed here, Tom.
 Expectations, though, pretty well priced since the market is that the ECB is going to
 raise rates this morning, and of course, we know a pickup 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 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 or like no man's land.
 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 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.
 And until we move, break down under 110 on the bonds or go back up over 113, 114, I don't
 think there's much there to trade or talk about.
 Yeah.
 Okay.
 So what I think about potentially is the SpaceX IPO to go back to that, to go back to that
 chain.
 I mean, just to push back on Mr. Grasso before we go there, I would be shocked beyond words
 if we cut some time this year.
 It's going to be fascinating though to watch Kevin Warsch.
 My good friend, Mr. Grasso, back from the New York Stock Exchange, might I say, this would
 be a nice conversation down there.
 But, yeah, this is what we do, but I'm more focused on the language and I think the bond 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 have a wager on cut, because there's a lot, let's put it in perspective.
 I'm not saying they're going to cut at this meeting.
 What I'm saying is cuts are not off the table for 2026.
 Whenever you have raised rates into a supply shock, they've always got to reverse on their
 decision.
 It seems a language, because they couldn't even agree on that, so it's going to be fascinating.
 But we're also fascinating 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 aftermarket.
 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 open higher.
 But it's the stock that I would not want to own past selling on the opening or selling
 some point later tomorrow 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 stays with a one handle in front, so it's in the 100 handle somewhere, then
 I think maybe you can buy a dip.
 I think if it's in somewhere up closer to 200 or something like that or even higher,
 I don't know why anybody would want to hold it up here.
 I don't like the risk awarded at any level that's kind of a pop after the opening.
 Yeah.
 I mean, Grasso, 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 calcium term thrown up real quick here.
 I know we're about to end the show, but there's still this expectation that eventually
 these two names are going to merge.
 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 as long as the spending stays, the market stays higher, but let's go back to SpaceX,
 within 15 to 30 days, 30% of flow is going to be held by the indices.
 And if you think about it, you might not get that real quick pop, but you have the calvary
 coming with a lot of passive investing.
 This could shock a lot of people and move higher in the first month.
 Okay.
 We're going to leave it there.
 Thank you to our morning call crew.
 Great to have you here.