5 Key Things to Know Before Wednesday’s Market Open

SpaceX shares experienced a notable 3% surge yesterday, breaking a seven-day losing streak. This uptick precedes a pivotal moment for the Elon Musk-led rocket company: its debut earnings report, scheduled for August 4th, which will also unlock a significant portion of its previously restricted shares.

Here’s a breakdown of what investors and market observers should be watching:

• Shareholder Liquidity Event: On August 6th, two days after the maiden earnings release, SpaceX investors will gain the ability to divest at least 20% of their locked-up shares. This impending liquidity event is a key factor influencing current trading dynamics.
• Short Interest Remains High: Bets against SpaceX have escalated, now representing nearly a third of its publicly tradable shares. This high level of short interest suggests considerable skepticism from certain market participants, despite the company’s ambitious ventures.
• Performance Against Benchmarks: Since its public debut, SpaceX shares have seen a decline of over 23%. In contrast, the broader S&P 500 index has experienced a modest gain of approximately 1% over the same period, highlighting SpaceX’s underperformance relative to the overall market.
• Pre-IPO Investment Vehicles: Goldman Sachs has reportedly developed a new platform specifically for its high-net-worth clients and family offices, aiming to facilitate investments in pre-public companies like SpaceX. This move underscores the growing demand for access to promising private market opportunities and the sophisticated financial instruments being developed to meet it.
• Contextual Earnings: The market’s attention will also be keenly focused on earnings reports from Tesla and Alphabet, scheduled for release after market close today. Given Elon Musk’s leadership role at both Tesla and SpaceX, any commentary or performance indicators from Tesla could offer indirect insights into the broader market sentiment surrounding Musk’s ventures.

Brent crude futures surged past $95 per barrel this morning, fueled by an eleventh consecutive night of U.S. military strikes targeting Iran. This escalating geopolitical conflict has sent both the international benchmark and U.S. oil prices up by nearly 4% in early trading.

Speaking to reporters, Secretary of State Marco Rubio expressed the U.S. desire for a diplomatic resolution with Iran, while also noting a perceived lack of seriousness from Tehran regarding a potential deal. The ongoing conflict in the Strait of Hormuz region, a critical chokepoint for global oil supply, remains a significant concern for market stability.

The upward pressure on oil prices is anticipated to weigh on stock markets, with all three major averages showing declines in pre-market trading.

Beyond potential new levies on Canada, the U.S. Trade Representative has signaled that further tariff actions could be imminent. A senior official indicated that “we expect to see some action soon,” suggesting a broadening of the U.S. trade policy landscape.

While specific timelines remain undisclosed, the administration is reportedly exploring mechanisms to maintain existing trade measures following recent Supreme Court rulings that impacted previous tariff implementations. Temporary tariffs imposed after these rulings are set to expire this Friday, prompting speculation about their replacement or extension.

This potential for new tariffs introduces another layer of uncertainty for global trade, potentially impacting supply chains and international business strategies.

The Federal Reserve’s cybersecurity concerns surrounding Anthropic’s AI model, Mythos Preview, have been amplified by a prolonged period without direct access to the advanced system. The central bank’s prior warning to financial institutions about potential risks associated with the AI has been juxtaposed with its own delayed access, creating a potentially vulnerable posture.

As of mid-July, the Fed had yet to gain access to the model, which Anthropic claims is adept at identifying software weaknesses and security vulnerabilities. This situation raises critical questions about the practical implementation of AI risk management by regulatory bodies themselves.

Meanwhile, leading AI firms Anthropic and OpenAI are significantly increasing their lobbying efforts. In the second quarter, their combined federal lobbying expenditures exceeded $3 million, marking a 23% rise from the previous quarter. This surge in advocacy spending reflects the intense competition and the critical juncture at which the AI industry finds itself, as it navigates evolving regulatory scrutiny and seeks to shape future policy.

In response to a growing deficit in skilled trades professionals, a consortium of prominent companies has launched an initiative aimed at bolstering the workforce in sectors such as construction and technical services.

Key players, including Google, BlackRock, Carhartt, and Ford, are participating in the Alliance for America’s Skilled Trades. This collaborative effort, announced recently, will involve partnerships with labor unions and trade associations, alongside investments in apprenticeship programs designed to cultivate new talent. The initiative seeks to build a more robust pipeline of skilled workers essential for the nation’s infrastructure and economic growth.

In related career news, a recent survey indicates a significant trend among healthcare students: over 70% are utilizing betting and prediction markets to supplement their education expenses. While a majority believe these platforms can aid in funding their degrees, less than half reported achieving positive financial returns.

Property taxes are emerging as a significant issue in the lead-up to the midterm elections. Understanding your effective property tax rate in comparison to others is becoming increasingly relevant as this fiscal concern garners political attention.