Things you need to know
- SpaceX drops their S1 – Nasdaq is the winner – June 12th is D-Day.
- NVDA – Jensen hits it out of the park again- markets do NOT react.
- Stocks and Bonds explode higher after Trump tells us ‘we are very close’.
- Oil down, Bonds Up, Yields down, Gold unchanged and the VIX declines.
- Try the Ground Chuck/Short Rib Burgers.
Good morning. There is SO much to talk about…..so let’s begin with this –
And we have LIFTOFF! SpaceX drops their S-1 last night…. Nasdaq is the winner for this listing…. leaving the NYSE bruised – Roadshow begins on June 4th, Pricing on the 11th and first day of trading is on June 12th under ticker symbol SPCX. As we know – this will be the BIGGEST IPO in history – looking to raise ~$75 billion – with a value approaching $1.75 Trillion.
But understand what you are buying – this is a combination of rockets, satellites, connectivity, AI infrastructure and social distribution all under one roof. Revenue hit $18.6 billion last year (+33%) — impressive yes, until you realize they still lost nearly $5 billion. Why? Because Starlink is printing the cash while AI is eating it. Starlink generated roughly $11 billion and subscribers doubled to more than 10 million, but ARPU (Avg Revenue per User) has fallen hard — meaning more users, less money per user.
Meanwhile management spent more than $20 billion in capex, with AI consuming more capital than rockets and connectivity combined. Read that again. AI consumed more capital than rockets. And if you think shareholders are going to influence any of this – wake up. Elon retains roughly 85% voting control through the dual-class structure. You’re buying a seat on the rocket…but you are not touching the controls.
The bull case? Starlink scale, AI dominance, orbital data centers and what they call a $28.5 trillion TAM (Total Addressable Market) — the largest actionable market in human history.
The bear case? Massive capital burn, falling subscriber economics and expectations so high there is almost no room for error.
Bottom line? This is a bet on Elon’s vision of the future. This is Starlink wrapped around a cash-burning AI lab, with a rocket company attached, run by one man who holds 85% of the votes.
And then – You could hear the hearts beating…..as the world awaited the NVDA earnings last night and then Jensen spoke – he crushed it, beating every measure (substantially)- Revenue came in at $81.6 billion (+85% YoY), EPS was $1.87 vs. $1.77 expected, and guidance for next quarter landed at $91 billion — again ahead of estimates. And then he left us with this thought
“Demand has gone parabolic. Agentic AI has arrived.” Sub-title – demand will outstrip supply for years..
Do I need to say more? No. Should you be selling your NVDA? I don’t think so. But understand what happened last night — there was virtually no reaction in the afterhours session…and THAT is the story this morning. Not because the numbers disappointed me, they didn’t. They were extraordinary. Another monster quarter. Another beat. Another raise. Another quarter where Jensen reminded everyone why NVDA remains the center of the AI universe. But extraordinary is no longer enough — extraordinary has become the expectation. And when a company delivers one of the greatest earnings runs in market history and the stock barely moves, the market is telling you something. Expectations are stretched. Positioning is crowded. Perfection has already been priced in.
That does not mean the story is broken and it does not mean you sell the stock. It means the next phase of this move may not come from simply owning NVDA — it may come from owning the ecosystem around it. NVDA remains the heartbeat… but a heartbeat alone doesn’t keep the body alive.
Look at the companies that make AI work at scale — networking, memory, optical connectivity, servers, power management, cooling and data center buildout. And above that layer sit the businesses that turn all of this computing power into profits — software, cybersecurity, cloud architecture, enterprise adoption, automation and productivity.
Because if NVDA keeps becoming more perfect… the better risk/reward may not be the heartbeat anymore. It may be everything connected to it.
Now – let’s’ discuss what happened yesterday…..
Markets exploded higher….Trump said that we are close to a deal with Iran – in fact the actual words were we were in the ‘final stages of negotiations’, Oil plunged – falling $5 or 4.9% to end the day at $98.25, Brent fell $6 or 5.5% to end the day at $105.
Bonds rallied (on the idea that inflation fears were overblown) – the TLT rose 1.1% while the TLH added 1% and that caused yields to back off a bit – the 2 yr is now yielding 4.05% – down from a high of 4.13%, the 10 yr is yielding 4.56% down from a high of 4.68% while the 30 yr is yielding 5.10% down from 5.19% and stocks EXPLODED. The algo’s going bezerk – not sure what they should buy first….so they just bought it all….
The Dow added 645 pts or 1.3%, the S&P up 80 pts or 1.1%, the Nasdaq added 400 pts or 1.5%, the Russell – which got smoked on Monday – took it all back – adding 70 pts or 2.6%, the Transports rose by 458 pts or 2.3%, the Equal Weight S&P rose 93 pts or 1.15% while the Mag 7 added 474 pts 1.3%.
Now, we have been here before – so let me remind you – Until there is an actual agreement- signed, sealed, structured & enforceable and the Strait reopens with ‘no strings attached’ – this whole story is not over – but we can remain hopeful.
Gold was mostly unchanged yesterday at $4,545 and this morning it’s easing another $12 to around $4,533 — suggesting investors are still trying to decide what story to believe. Is gold pricing in sticky inflation? Continued geopolitical risk? Or is it beginning to price in easing tensions across the Middle East and lower oil? For now, it remains trapped within the trendlines — support at $4,365 and resistance at $4,680 — so there is no reason to get dramatic either way.
If inflation begins to cool and tensions ease, then gold would likely feel some pressure as investors unwind both the inflation hedge and safe-haven trade. Lower oil could help stabilize yields and rotate money back into equities and risk assets. But I would not expect gold to collapse. Why? Because gold no longer appears to be trading solely on inflation fears — it is also reflecting ongoing central bank demand (think China, India, Turkey……), geopolitical uncertainty, fiscal concerns and broader diversification away from traditional reserve assets. So, while some of the war premium may come out… the trust premium may not.
The VIX fell 3.4% yesterday to 17.44 and that tells you investors took fear off the table. Why? Oil and Treasury yields. Traders unwound some of the protection they had bought…. on the back of that good news. But don’t confuse a lower VIX with an all-clear signal. At 17.44 we’re back below the trendline and moving toward complacency territory again. That doesn’t mean just buy ‘everything’ – it just means the market is getting complacent again….and considering oil, bonds and geopolitics are all still unresolved – I would stick to the plan…. No reason to change what has been working for you.
Eco data today – Housing Starts expected to be down 5.3%, Building Permits up 2.5% along with S&P US Manufacturing and Services PMI’s – both expected to be in the expansion zone at 51.2 and 51.8 respectively.
This morning European markets are a bit weaker…. all market centers down about 0.2%. Nothing dramatic at all – other than what is happening to the European satellite companies. Eutelsat – the Paris based global satellite operator that is up ~13%, OHB +12% & SES +4.5% on the back of the SpaceX announcement.
US Futures are also under pressure –…. Dow futures down 50 pts, S&P’s down 17 pts, the Nasdaq down 100 pts while the Russell is down 12 pts. The long weekend is now about to begin…..travel delays already building…. Laguardia airport shut down one runway because of a sinkhole and that is causing all kinds of delays and cancellations….and with gas at elevated levels – more and more people are opting to just stay put.
The S&P closed at 7432 – up 80 pts. it’s been a crazy week – we have see the S&P trade up to 7517 and down to 7333 as the Iran headlines drove the action….Let’s see what happens today and remember – volumes will thin out as the weekend approaches, moves will become exaggerated – in both directions….
My advice? Go and enjoy the weekend. DO NOT make emotional, FOMO-driven decisions. Stay focused. Stay in quality. Stick to your plan. A plan that should be based on who YOU are, your age, your risk tolerance and your liquidity needs. Feel free to call me at 561-931-0190 to discuss.
Take good care,
Kp
[email protected]
Source: Bloomberg, CNBC, Reuters, Wall Street Journal
This media segment contains general market commentary based on publicly available information and is provided for informational and educational purposes only. It is not intended as, and should not be construed as, investment advice or a recommendation to buy or sell any security.
Any references to specific securities, asset classes, market levels, technical indicators, or sectors are provided solely for illustrative purposes to support market commentary. Such references do not represent recommendations and should not be interpreted as reflecting the performance of any SlateStone Wealth, LLC investment strategy, portfolio, or client account. Past performance of any referenced security or index is not indicative of future results.
Forward-looking statements, including projections of market levels, technical support or resistance ranges, economic outcomes, or potential market reactions, are based on current opinions and assumptions and are subject to change without notice. Actual results may differ materially. Investing involves risk, including possible loss of principal.
Discussion of market opportunities, valuation compression, or sector rotation does not imply that any particular investment is suitable for any specific investor. Investment decisions should be made based on an individual’s objectives, financial situation, risk tolerance, and time horizon.
The firm and its clients may hold positions in securities discussed, and such holdings may change at any time without notice.
Advisory services are offered through SlateStone Wealth, LLC, a registered investment adviser. Registration with the U.S. Securities and Exchange Commission does not imply a certain level of skill or training. An advisory relationship is established only pursuant to a written agreement. For additional information regarding our services, fees, and conflicts of interest, please review our Form ADV Part 2A, available at www.adviserinfo.sec.gov or upon request.
If you contact our firm to request a consultation, any discussion would be preliminary in nature and would not constitute personalized investment advice unless and until an advisory agreement is executed.
Ground Chuck/ Short Rib Burgers
The weekend is coming so get ready for the BBQ….Try these spectacular burgers…
Ground Chuck Burgers mixed with shredded Short Rib meat- This is crazy…… This is a bit of work – but if you have the time and you really want to impress – go for it. Refer back to the Short Rib recipe* (see below) – Make 1/2 dozen ribs – the night before……cool and then shred the meat off of the bone….
Now – mix the cooked short rib meat with the ground chuck for the burgers – (season with s&p) ……form the burger and cook on the grill. Top with sautéed onions and Monterey jack and serve on a butter toasted Brioche bun to complete. Outstanding.
*Braised Short Ribs
You will need 8 / 10 beef short ribs (as they shrink when cooking), carrots, celery, onions, garlic, tomato paste, red wine, beef broth, s&p, olive oil…..
Preheat oven to 325 degrees.
Start with the ribs at room temperature. Rinse and pat dry. – season with s&p on all sides. In a large frying pan – add the olive oil and turn heat to high until the oil gets hot…. add ribs – turn heat to med/med high and brown the ribs on all sides.
Place ribs in a large baking pan – on their side – just line them up. Next – chop – not mince – but rough chop, onions, carrots, celery and garlic. Do not be afraid to use garlic…..it just gets sweet.
Cover the ribs with the veggies. Back to the frying pan – add beef broth – tomato paste (small can) and your favorite red wine. Bring to a boil and then simmer until the sauce reduces to 1/2. Once done – pour the juice over the ribs in the baking pan.
Make sure you make enough juice so that the ribs are bathing in the juice. Do not cover the ribs in juice – just let them bathe. Cover tightly with tin foil. Place in oven and bake for at least 4 hrs….the longer they stay tightly covered the softer and juicer and tender they will be.
Buon Appetito