Investors will be watching to see what happens next with SpaceX, which has completed its initial public offering. SpaceX is listed on the Nasdaq, opening at $150 per share after an IPO price of $135 per share, and is already being hailed as a success. Shares rose more than 19% to close at $160.95 per share. We’ll see if SpaceX can maintain its momentum over the next few days. IPOs are notoriously volatile, and the starting position of a stock price does not necessarily reflect future performance. For example, Facebook’s parent company Meta’s IPO was widely criticized as a fiasco, and it took more than a year for the stock to recover to its initial price. More recently, Cerebra Systems, the year’s biggest IPO up until SpaceX, soared 68% on its Nasdaq debut last month, but has since fallen sharply. But early enthusiasm is promising. Demand for SpaceX’s IPO is reportedly more than four times oversubscribed, indicating more investors will want a piece of the company in the coming days and weeks. SpaceX is not yet fully traded, but it plans to join the Nasdaq 100 along with other indexes 15 business days after its debut. A bonafide options contract is expected to be rolled out in the coming days to accommodate the rocket maker’s massive retail demand, which is also adding to the volatility. “We need to look at the aftermarket,” said Jay Woods, chief market strategist at Freedom Capital Markets. “Watch how the day ends on Friday, and watch how it trades on Monday, Tuesday and Wednesday.”Stock FluctuationsIf SpaceX’s debut can keep the animal spirits alive in the city, it could bode well for the tech industry. The semiconductor industry has experienced significant ups and downs this month, at least in part due to the need for large amounts of liquidity ahead of IPOs. The iShares Semiconductor ETF (SOXX) is on track to rise more than 11% this week after falling nearly 6% last week. Wolf Research’s Rob Ginsburg said Thursday that semiconductor stocks have not fallen below 21-day support, a short-term indicator. But Freedom Capital’s Woods said investors looking to weather the volatility surrounding SpaceX’s IPO should diversify their holdings beyond tech and into broader markets that are starting to outperform. The Invesco S&P 500 Equal Weight ETF (RSP) has outperformed its market-cap weighted benchmark not only this month but also year-to-date. According to Wolf Research, signs of bullish momentum are starting to emerge. “I think what investors will want in the coming months as we slowly move out of this technology sector is parity,” Woods said. Small-cap stocks are also hitting new all-time highs, with the Russell 2000 up nearly 4% this week alone. The small-cap index is currently the best performer, up nearly 19% this year. Fed Meeting Next week’s Fed meeting will also be significant for markets, given that Kevin Warsh will be chairing it for the first time. The central bank is expected to keep interest rates unchanged. However, the central bank appeared close to removing the easing language at its April meeting when inflation began to rise, leading the Street to look for changes to the statement that could remove the easing language. Consumer price statistics released this week showed annual inflation above 4% for the first time in three years. Rising inflation is increasing confidence on the streets that it will not be possible to cut interest rates any time soon, as Mr. Warsh has been saying even before he took over. In this regard, President Donald Trump appeared to give the Fed chairman some reprieve this week, saying he loves inflation. According to the CME FedWatch Tool, the chances of a rate cut this year are virtually zero. The June 16-17 meeting will also include a summary of economic forecasts, which could give traders more clarity on the future direction of interest rates. Mr. Warsh’s approach to Fed communications will also be closely monitored. The Fed chair has said he opposes holding press conferences at every meeting, which could mean press conferences will be cut to just four a year, as they were before Jerome Powell’s term. Week Ahead Calendar All Time (ET). Monday, June 15th 8:30am Empire State Index (June) 9:15am Capacity Utilization (May) 9:15am Industrial Production (May) 10am NAHB Housing Market Index (June) Tuesday, June 16th 8:15am ADP Weekly Employment Change (05/30) 8:30am Export Price Index (May) 8:30am Housing Starts (May) 8:30am Import Price Index (May) Wednesday June 17th 8:30am Retail Sales (May) 10am Business Inventories (April) 10am Home Sales Pending (May) 2pm FOMC Meeting with Economic Forecasts 2pm Federal Funds Earnings Target Cap: Jabiru Thursday June 18th 8:30am First Claim (06/13) 8:30am Philadelphia Fed Index (June) 10:00am Leading Indicators (May) Earnings: Accenture, Kroger Friday, June 19th Market Closed on June 19th
