Edition 357: 3 things investors need to know from last week!
This week, we examine growing market caution as bear signals flash on Wall Street, the debate surrounding SpaceX’s blockbuster IPO and AI revenue deals, and encouraging signs of resilience in the U.S. housing market despite elevated mortgage rates.
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Bear Market Warning Signs Flashing: Bank of America strategists report that 7 of their 10 key bear market indicators are now signaling caution, suggesting stocks may be approaching a market top. The team points to elevated valuations, speculative behavior in high-growth stocks, and widening performance gaps within the tech sector as signs of increasing market vulnerability. While selective stock opportunities remain, the bank advises investors to consider taking profits as the broader market faces heightened downside risk.
Source: Yahoo Finance
SpaceX IPO Under the Microscope: Ahead of its IPO, SpaceX has secured multibillion-dollar AI compute agreements with Google and Anthropic, significantly boosting projected revenue and strengthening its valuation story. Critics question the timing and structure of these deals—particularly given short cancellation windows and Google's ownership stake—while supporters argue they reflect genuine demand for AI infrastructure. Despite the controversy, many investors remain bullish on SpaceX's long-term prospects in AI, space, and defense.
Source: Yahoo Finance
Housing Market Showing Signs of Life: Existing home sales rose 3.2% in May compared to both the prior month and a year earlier, marking one of the strongest performances for the housing market in the past three years. Increased inventory, resilient buyer demand, and lower mortgage rates than last year have helped drive activity, though affordability challenges and rates hovering around 6.5% continue to weigh on a full recovery. Market experts say further improvement could depend on mortgage rates moving closer to 6%.
Source: Yahoo Finance
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