Managing Editor’s Note: The SpaceX IPO is set to be the biggest market event of 2026, and no one has researched this opportunity more than our colleague, former tech executive Jeff Brown.
He believes buying shares of SpaceX on IPO day is NOT the best way to go. Instead, he believes THREE NEW plays will skyrocket starting on IPO day.
He’s having a strategy session on Wednesday, June 3, at 8 p.m. ET to help you prepare for this historic event. If you’d like to attend for free, simply RSVP right here.
One of the most dangerous phases in a bull market comes when investors get so consumed by a narrative that fundamentals fly out the window.
We’re seeing this play out now…
With indexes back around all-time highs, euphoria is now building for SpaceX’s IPO set to take place next month. Despite just one of its three major divisions (Starlink) being profitable and an annual revenue of $18.6 billion, some estimates put SpaceX’s potential valuation at $1.5 trillion.
It’s a heck of a valuation for a company reportedly burning through tens of billions of capex and losing billions of dollars every year.
But it highlights the major disconnect taking place in the markets right now. And if investors aren’t careful, they could get caught if sentiment suddenly shifts.
Because underneath the surface, things are getting increasingly uncertain…
What makes the current environment so dangerous is that this speculative wave is happening right as macro conditions are deteriorating.
The bond market has already been showing warning signs.
U.S. 10-year Treasury yields recently topped out around 4.69% – their highest level in 16 months – as markets repriced inflation and interest rate expectations. Higher yields increase borrowing costs across the economy, putting pressure on consumer spending and economic growth.
At the same time, higher yields also place enormous pressure on stocks priced for strong growth.
Yet as the fervor around SpaceX grows, retail investors appear to be overly complacent about risk. All they want to know is how they can get their hands on SpaceX stock. That’s tunnel vision, ignoring many important macro factors.
After all, the situation in the Middle East shows little evidence of any breakthrough. The latest “peace deal” has once again unraveled.
There have been reports of the U.S. military sinking Iranian ships that were attempting to lay mines in the Strait of Hormuz. Iran retaliated by launching missiles against U.S. planes. Time will tell if these hostilities are going to escalate into something bigger.
That’s why I recommend choosing your next steps with extreme caution…
The market’s reaction to Nvidia’s earnings was another warning sign.
Shares had already been selling off before its earnings announcement. And despite good results from the AI rally’s poster child, Nvidia continued to sell off further. It was recently trading down 9% from its all-time high.
It’s a theme that often plays out late in runaway bull markets. Even though earnings, revenue, and growth may remain strong, high expectations become increasingly hard to exceed.
In short, folks start to develop totally unrealistic expectations. And that sets them up for massive disappointment.
As history shows, once a narrative starts overriding underlying fundamentals, risks can quickly build beneath the surface. We saw it in the dot-com boom and again in the housing bubble that led to the 2008 financial crisis.
To be clear, I’m not necessarily expecting a repeat of those major events. But I do see similarities emerging as speculative hype dominates the markets. Folks have lost their objectivity in a runaway bull market.
So if you’re sitting on solid gains, now might be the time to lock down those profits. Because when blow-off tops finally reverse, they often unwind much faster than anyone expects.
Regards,
Larry Benedict
Reading Trading With Larry Benedict will allow you to take a look into the mind of one of the market’s greatest traders. You’ll be able to recognize and take advantage of trends in the market in no time.
