New York Stock Market, Value Stock Rotation Ahead of FOMC…SpaceX Surges Another 17% Intraday
New York Stock Market, Value Stock Rotation Ahead of FOMC…SpaceX Surges Another 17% Intraday [Wall Street Newsletter]
Speakers
Park Myung-seok
— Curator
Summary
US markets rotated into value stocks ahead of the FOMC while SpaceX surged on retail FOMO and low float. Oil fell sharply as Iran tensions eased, and Wall Street analysts called for a broad 'everything rally' driven by liquidity and soft landing hopes. Semiconductors saw profit-taking, but TSMC and storage stocks remained positive, while Tesla and Mobileye also drew bullish calls. The curator cautioned that SpaceX's extreme valuation and upcoming lock-up make it a risky bet.
- Dow up, Nasdaq down on pre-FOMC profit-taking in growth, value rotation, and SpaceX sucking liquidity.
- SpaceX continued its post-IPO surge to $225 intraday, driven by only 5% free float and retail FOMO, but lock-up risks and extreme valuation are significant.
- Oil dropped to $76 as Iran-US negotiations raised hopes for Strait of Hormuz reopening; analysts now expect oil to stay pressured despite some disagreement.
- Wells Fargo raised its S&P 500 target to 7,950, calling an 'everything rally' as war risks ease and money-market funds flow into stocks.
- Morgan Stanley sees beaten-down energy stocks as an opportunity if the broad rally materializes, as fundamentals may not be as weak as oil prices suggest.
- TSMC viewed as undervalued with strong AI tailwind, while storage names like Western Digital surged on AI-driven demand and analyst upgrades.
- Tesla Q2 delivery estimates raised by Goldman Sachs; Mobileye announced a US-wide robotaxi launch by 2027, boosting physical AI narrative.
- Curator warned SpaceX now worth more than all defense and space stocks combined, with lock-up expirations ahead and FOMC uncertainty, making it a risky 'man's test'.
Ideas
Everything rally broadening beyond semiconductors
Easing geopolitical tensions from Iran-US negotiations, lower oil, and massive money market funds rotating into equities will drive a broad 'everything rally', broadening gains beyond semiconductors. Wells Fargo raised its S&P 500 target to 7,950 and the soft landing narrative is strengthening.
Beaten-down energy stocks poised for rally
If an everything rally materializes, beaten-down energy stocks present an opportunity because the sell-off driven by lower oil prices may be overdone relative to their fundamentals, as noted by Morgan Stanley.
TSMC undervalued with strong AI tailwind
TSMC is undervalued relative to its AI positioning and steady growth. Goldman Sachs sees further upside, Altheia Capital set a $700 target, and its US partnership with M-Co for advanced packaging strengthens its long-term outlook.
AI drives storage demand, Western Digital surges
AI-driven demand for storage is boosting SSD companies, with analysts upgrading targets and Western Digital surging over 10% intraday. The trend supports continued strength in storage stocks.
CoreWeave EBITDA improvement alleviates debt fears
CoreWeave's EBITDA is expected to improve, which will reduce debt concerns for the AI neocloud sector and help the AI sector shed debt fears, supporting CoreWeave's stock.
SpaceX rally driven by low float, risky
SpaceX's rally is fueled by low float and retail FOMO, but upcoming lock-up expirations will increase supply, valuation exceeds the broader defense/space sector, and post-FOMC uncertainty could trigger a selloff; best avoided.
EchoStar benefits from SpaceX-driven space hype
As SpaceX drives excitement in the space sector, New Street Research highlights EchoStar as a relative winner; it rose while other space stocks fell, making it an attractive play.
Tesla deliveries expected to beat consensus
Goldman Sachs raised Q2 delivery estimates for Tesla, European EV demand has rebounded, and high oil prices are pushing consumers toward electric vehicles, creating positive momentum for Tesla stock.
Mobileye robotaxi launch positive catalyst
Mobileye announced a US-wide robotaxi launch by 2027, marking significant progress in autonomous driving. The market views this as a positive catalyst, reinforcing the physical AI narrative.
