Independent Financial Research & Analysis
Daily briefings, 7,300+ real-time charts, and macro insights from Dr. Ed Yardeni and his research team.
Research
Latest Research
Recent insights from our research team
On Tumbling Asian Currencies & Stagflating Australia
Today, William discusses how a more hawkish US central bank and stronger US dollar hammer Asian economies. Besides driving down the value of their currencies, it makes them more vulnerable to excessive inflation and poses problems for their monetary and fiscal policymakers. … Also: He explains how the Australian economy, resilient for 30 years, was “undone by its own success” as structural advantages became liabilities over time. Stagflation now looms, putting the central bank in a tough spot. … And Toby gives a “boots on the ground” assessment of the stock market in his native Australia.
Is There Enough IPO Money On Planet Earth To Fund SpaceX?
The mega IPOs are coming. SpaceX is set to go public on June 12, raising $75 billion to $80 billion at a market valuation of up to $1.8 trillion. It will be the largest equity offering in history. Then, Anthropic and OpenAI are expected to go public with market capitalizations of $1 trillion to $1.75 trillion each. Fears are mounting that the "AI-3" IPOs will suck the oxygen out of the rest of the stock market. We aren't as concerned. The combined market value of these three companies is widely expected to total $4 trillion to $5 trillion once they go public. The capital being raised is around $200 billion. To raise so much money, Wall Street's investment bankers are planning to give retail investors the opportunity to participate in these IPOs. We expect that they will respond enthusiastically. The market capitalization of the Wilshire 5000 is $75.6 trillion (chart). It is close to $60.0 trillion for the S&P 500. Will these measures increase by $4 trillion to $5 trillion when the AI-3 go public? Not based on free float, i.e., the shares that are available for the pubic to trade (excluding closely held shares, insider holdings, and government stakes). SpaceX is only floating roughly 4.3% of its shares to the public. The other two AI-3 are also likely to provide relatively puny free float. Here's more: (1) AI-3 vs Mag-7. The Magnificent-7 currently have a total market capitalization of $24 trillion (chart). They have remarkably high public ownership, ranging between 81% and 98%. The Mag-7 have total market capitalizations ranging from $1.5 trillion to $5.4 trillion (chart). The AI-3 won't be in the same league, given how tiny their free float will be initially. (2) Equity IPO market. In any event, the AI-3 should have no trouble raising $200 billion in the IPO market, which has financed $232 billion in new equity issuance over the past 12 months through April (chart). During 2021, more than $450 billion was raised with equity IPOs. (3) Retail investors. The AI-3 IPOS could attract new retail investors into the stock market. Lots of Americans are already in the market. Last year, 62% of adult Americans owned stock, according to Gallup (chart). That's not surprising given that assets held in IRAs probably exceed $20 trillion currently (chart). At the end of last year, households (including nonprofit organizations) held a record 36.8% and 47.1% of their net worth and financial assets in equities, respectively (chart). (4) Wall Street's games. The index providers are rewriting their playbooks to accommodate new entrants to public markets. S&P Dow Jones is considering cutting the S&P 500's seasoning requirement for mega-caps from 12 months to six and waiving the four-quarter GAAP profitability gate that has been in place since 2002. Further, the Nasdaq cut its inclusion window from 90 trading days to 15, effective May 1. Bloomberg Intelligence estimates S&P 500 funds would need to absorb 19% of SpaceX's public float within six months, with the Russell 1000 and Nasdaq-100 funds absorbing another 24%. Float at the IPO will be roughly 4.3%, as noted above. This is forced buying colliding with a very limited supply. (Where is the SEC?) Allocation conventions are bending too. We have already personally received emails from our brokers inviting us to participate in the SpaceX IPO. Retail involvement of this scale is unusual. (5) Burning cash faster than rocket fuel. The combined 2025 losses of the AI-3 topped $25 billion. SpaceX lost $4.9 billion last year. Much of its projected valuation is based on a $22.7 trillion enterprise AI market that does not yet exist as a revenue source. There has been no proof of concept for launching data centers into space.
Fed Turning Hawkish
Today, Dr Ed and Elias set out the case for the Fed to tighten sooner rather than later. Unlike the consensus, which doesn’t expect a rate hike until late this year at the earliest, we see the FOMC raising the federal funds rate in July, after pivoting to a tightening bias at its meeting this month. That would be appropriate given the resilient economy, stable labor market, and rising inflation. Indeed, recent statements by various Fed officials suggest that a hawkish recalibration is underway. … Also: A sanguine take on recent consumer debt and credit statistics. They’re not cause for alarm, initial appearances to the contrary. … And Dr Ed reviews “Pressure” (+ +).
Archive
Our Research Library
19 years of daily research, charts, and analysis
Topics
QuickTakes Topics
Timely commentary covering the most important market themes
Charts
Find Any Chart in Seconds
Search across 7,398+ real-time charts with instant visual previews
CONOCOPHILLIPS: PRICE, FORWARD EARNINGS & VALUATION
TARGET: FORWARD PROFIT MARGIN
SOUTHERN COMPANY: FORWARD P/E
MORGAN STANLEY: PRICE, FORWARD EARNINGS & VALUATION
Sample charts from our collection of 7,398+ visualizations
Tools
Research Tools
Interactive dashboards for tracking economic conditions and market trends
Beige Book Monitor
Fed economic conditions across 12 districts with traffic-light signals.
FOMC Policy Meter
Dovish-to-hawkish policy stance tracker across FOMC meetings.
FOMC Minutes Monitor
Hawk/dove signal extraction across 10 economic themes.
FOMC SEP Monitor
Fed projections and dot plot distributions across meetings.
Private Credit Monitor
Auto-updating chronology of the private credit liquidity crisis.
Release Calendar
Major publications from the Fed, ECB, IMF, and 12 global institutions.
Try Yardeni Research free for four weeks.
Full access to everything we publish. No credit card, no obligation.