SpaceX IPO to drive ETF performance divergence
The upcoming SpaceX IPO is expected to create a performance divergence between Nasdaq-100 and S&P 500 tracking ETFs due to differing index inclusion timelines.
The argument
The guest noted that the Nasdaq-100 plans to include SpaceX just 15 trading days post-IPO, whereas the S&P 500 will wait 12 months. This exposes Nasdaq passive investors to early volatility while S&P investors sidestep it.
The thesis, stress-tested
✓ What validates it
- ✓Official confirmation of SpaceX's inclusion dates by Nasdaq and S&P index committees
- ✓Measurable performance and volatility divergence between QQQ and SPY post-listing
▸ Risks discussed
- ▸High initial volatility of SpaceX stock post-IPO could negatively impact short-term ETF performance
- ▸Potential overvaluation of the IPO as suggested by some academic analysts
Hear it yourself
"The reason why inflation's, been the focus is because we've been running above target for a while. There's only so many times you can say, well, this is a function of this idiosyncratic factor. This upward pressure is a function of tariffs, and that'll go away. You know, if everything is as idiosyncratic, then nothing is. We've seen durable goods inflation go up and remain up over the course of the last year, and that could be another area where we're seeing this stickiness in inflation. If inflation goes up and remains up, certainly, we don't have that priced into yields, and, certainly, we don't have that priced into the equity market."
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