June 5, 2026 • 22 mins
On this week's markets wrap, John Stepek and Sam Unsted, editor of the Markets Today blog, explore the implications of SpaceX’s anticipated $75 billion IPO, debating whether its massive size could reshape market structure, passive investing, and investor appetite for AI-related assets. They also highlight Bitcoin’s sharp decline this year and the UK’s long-running challenge of encouraging retail investors to move cash savings into investments.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:18):
Welcome to the Merton Talks Money Market Wrap, where we
talk about the biggest moves and markets this week and
watch driving them. I'm joined Stepic, senior reporter and author
of the Moneyed Still newsletter, in for Merden this week
because she's away this week. Join me in studio is
Sam Unstead, who is the editor of the Markets Today blog,
which you should all be following religiously. Can access it
from the Bloomberg homepage. Are also from our new Bloomberg
(00:40):
Money page, which launched this week. Sam, thank you once
again for joining this. And Oh, there are so many
things that we could talk about, but I think we
will start off with SpaceX.
Speaker 3 (00:55):
Yeah, yeah, I think that's right.
Speaker 2 (00:56):
So we got a price now, haven't we. Well, what
they want to is what they hope they will get.
Speaker 3 (01:02):
We know what they want to raise, which is seventy
five billion dollars, so the biggest IPO ever. You know,
there is so much writing going on about SpaceX right
now because this is and it is an enormous story.
Speaker 1 (01:17):
It's an it's sort.
Speaker 3 (01:18):
Of a both incredible and incredibly weird company. You know,
they they do chatbots, they do rockets, they do satellites.
They want to put data centers, yeah fatally, yeah, yeah,
they want to have data centers orbiting the Earth. And
I mean I was, you know, building a data center
on Earth is quite hard, so then getting it up
into space is going to be difficult too. But enormous
(01:42):
you know, potential addressable market. All these kind of huge
numbers being thrown around. Also though a huge amount of
it is going to retail investors being offered potentially up
to a third of it. Yeah, we retail invests. That
is an enormous amount of money, you know, getting on
for nearly what twenty close to twenty five billion dollars
retail investors. So it's going to be a huge test
(02:03):
of the momentum in markets.
Speaker 2 (02:05):
Because one of the things that everyone's been talking about
and I think makes an awful lot of sense in
Martin Levine obviously for Bloomberg, is very good on this
sort of thing, is the I guess the amount of
artificial potential to mind for these shares, because I'm right
in saying that the big in disease, a lot of them,
(02:28):
not all of them, but at the big indsees have
largely been relaxing the entry rules for IPOs of the
same size as space. Yeah, so we got to get
into in the IPOs and things like Anthropic that coming
down the pipe will basically be able to go into
big in disease almost straight away or within a few
weeks or even a few days of trading.
Speaker 1 (02:50):
Yeah.
Speaker 3 (02:51):
Well, may it may actually be a bit more complicated
than that once we get round to it, because we
are talking about an enormous amount of extra capital going
into the market, and so you know, the SMP or
the NASDAQ one hundred, you know, in the US may
have to sort of really rethink the whole way that
it's weighted, not not just because of space expec you
just mentioned Open AI, Anthropic. You know, between those three companies,
(03:14):
you're talking three and a half four trillion dollars worth
of company. You know, that's that's a lot. You know,
it's more than the entire size of the foot see
one hundred. So it is unfortunately, but it is you know,
it is a it's not just a test really of
investors and their appetite to keep buying these kind of things.
You know, these kind of you know, particularly the AI story.
(03:36):
You know, when it comes to SpaceX and the data
center side of things, as well as the kind of
space aspect to it. It's a test of how the
market can handle it, literally, how the structure of the
market can handle this sort of size of company coming on,
whether it starts to impact trading in other things. You know,
I don't know, you know, because we don't know because
we haven't seen it happen yet. You may well get
(03:58):
more money coming in from wealthier investors that can that
can eat up a lot of the extra capital that
that's coming onto the market. But it's going to be
a really complicated thing for for all of the index
providers to to put these companies on there.
Speaker 2 (04:09):
Oh yeah, I suppose one thing I've been thinking, and
I know again I'm not unique in suggesting this, but
if anything might for one of a bit about break
passive investing, this could be the thing that does it. Yeah,
in terms of tilting, I guess tilting them. But you've
already got huge sector concentration. I mean, so if you
(04:33):
just lump another massively eye company and on top of
the rest of them, yeah, then you know you're kind
of turning the end of seas at one big concentrated
bit or in a very specific sector. And then also
that's where a huge chunker, not just the US but
the world's pension money is setting as well.
Speaker 3 (04:50):
Yeah, that's that's a really good point actually, And actually
when you look at the the S and P five
hundred over the course of sort of this year and
actually it's going back sort of a year or so,
almost all of the gains are AI stocks. If you
take out the AI stocks, almost basically everything else is
just sat there, you know. And so you're right that
it's not just a concentration in big technology companies, which
is which already exists.
Speaker 1 (05:11):
Right.
Speaker 3 (05:12):
So the kind of like the trillion trillion plus cohort
in the US, you know, is already making up about
nearly a third of the S and P five hundred,
So that's still a lot of concentration risking is kind
of what ten to fifteen stocks, So already you have
that if you then concentrate it even further to just
one industry and SpaceX. You know, one of the things
(05:32):
that's going to be debated very strongly with SpaceX is
that they're looking for evaluation, which is just by any standard,
absolutely enormous, right, and they make I think it's about
in their last filing it was eighteen point seven billion
dollars of revenue, so their revenue multiple would be absolutely enormous.
So to deliver on that, you know, is going to
(05:54):
be very complicated. But then, I mean you and I
have actually spoken about this previously. Valuing a company where
Elon Musk is is really hard because there is a
kind of intangible thing that he brings to it, you know,
you know, that is a bit beyond kind of traditional
metrics on how to has value. At Tesla, for example,
their share price is just completely divorced from their earnings.
(06:17):
You know, so what SpaceX does you know, when you're
looking at funded against the fundamentals, may ultimately not really
be the question.
Speaker 1 (06:24):
I mean, you're right.
Speaker 2 (06:25):
I mean it's interesting because I do think the Musk
then he clearly has an extraordinary talent, and he has
built some extraordinary companies. And then you know, for all
that he's got his critiques, he's also not just you know,
he's not a chiant in terms of now there's a
lot of concrete stuff behind them. And I suppose the
(06:46):
other interesting thing with Tesla is that you know, law no, no,
I mean I think it's fairly see it is the
company that put the electric car on the mark, and
without him, the electric cars would almost certainly not have
taken off. And that's you know that there's a kind
of historic counterfactor there, and anyone that cares about the
(07:07):
environment should probably be very grateful to them. In fact,
But now Tesla has competition from lots of other electric
car manufacturers. It also is competition from lots of other
self drive manufacturers, and yet it still manages to not
succumb to any kind of fundamental I suppose. Yeah, And
I mean, as you say, it's one thing to think,
(07:30):
I mean, you might have faith in SpaceX because of
Tesla defying gravity all the time, but you are kind
of like, also, well, look, Tesla by now should really
is at least there is a context, there's a world
in which you can say, well, this is where the
valuation should be. You know, this is you know, he's
got competition from everywhere else, and it's not as if
he's doing it and else with Tesla. That yeah, adds
(07:52):
that kind of you know gennes qua. So I just
I just wonder where it is exactly he's got going
for them, apart from people just think, oh well, look,
if he's in it, then there must be yeah something.
Speaker 3 (08:05):
Now, I think the big difference you have to remember,
I suppose with Tesla. I mean that Tesla make cars, right, Yeah,
we are a car one yeah, so like and they
just made it electric, right, so they it's I agree
with you, it's I don't. I don't think we'd be
anywhere near where we are on EVS without without Tesla
having kind of boomed and kind of pulled everyone in
that direction. But you know, SpaceX that the AI part
of the business, you know, is already extremely competitive with
(08:29):
companies that are enormous and incredibly you know powerful, will
probably list later in the years, we said, anthropic, open AI,
et cetera, backed by a lot of the biggest companies
in the world as well, so'd be hard for them
to compete there. And then the other side of it
is space, and like I said, it is it is
involving things like taking a data center, and look, data
centers are really big, you know, they are massive, and
(08:50):
so getting that up into space is it's an incredible
idea and if he pulls it off, it would be
astonishing though whether he can pull that off in his
lifetime even is you know, debatable. So it's a very
different type of story, but there is across both this
just intangible kind of musk premium that's on the valuation
and whether that holds for SpaceX as it does for Tesla,
(09:13):
we'll find out next week.
Speaker 2 (09:15):
Yes, we're looking forward to it. Speaking of tangible orders
and fallibility and questions about how do you value these things?
Bat coins that are terrible and as they said, the terrible, Yeah,
it is. Basically I was looking down mark kin a
Bloomberg list of you know, prices to watch and yet
(09:38):
today is down about thirty percent and that kind of
basically makes it like, well within the bottom ten what's
performing major assets on the planet this year?
Speaker 3 (09:47):
Yeah, and you know there there are potentially kind of
quite a few reasons as to why that is. You know,
I think, particularly the most recent kind of shift, I
think a bit of momentum has gone out of it. Right, so,
you know, to Donald Trump got in and as it
sort of hit some highs, it was a sort of
one hundred and twenty one hundred and twenty four five
thousand dollars. You know, a lot of that was this
institutional money coming in. You know, sort of giving credibility
(10:11):
to a market that previously had really struggled with credibility
that's now there. And so you could argue that there's
an element of it where just the air has gone
out of it, and maybe a bitcoin is.
Speaker 1 (10:19):
Sort of a bit boring.
Speaker 3 (10:20):
It's not as interesting as it used to be and
not as exciting. And some of that may also be
because of AAI. You know, the amount of money that's
being spent on AI is so astronomically enormous, you know,
I mean to the point where you know, it's another
big story. Over this week, Alphabet is raising eighty billion
(10:41):
dollars in a stop offering in order to back their
AI spending. That that is just so out of the
realms of what Alphabet do. It's just not something that
normally happens.
Speaker 2 (10:52):
Well, it's interesting that they sneaked it before space. It's
hard well because they're basically sitting They're going, yeah, moved,
he's going to have any money or left?
Speaker 1 (11:00):
Yeah, a bit bit on.
Speaker 3 (11:02):
But that's just one stock offering by one company. This
enormous amount of debt that that you know, next year,
there's a blue Bug Intelligence forecast that next year that
capex spending by the hyperscalers will hit a trillion dollars
for the year, you know, not total, that's just for
next year. That is pulling so much attention and so
much capital, so much money that places like Bitcoin that
(11:24):
used to be this kind of like this is the
new way to do finance, This is going to change everything.
Just that excitement maybe has gone out of it a
little bit. And then it's it's maybe also acting in
a way that it wasn't at the beginning of the
year as a risk asset again. You know, they had
this little moment last year, this question of you know,
do we still buy the dollar, which it turns out
(11:46):
you do, and you know where bitcoin benefited from that
bit Bitcoin and gold of course at the time, and
maybe that's gone out of it too. You know, maybe
again people have thought are actually gold and bitcoin aren't
the same, you know.
Speaker 1 (11:59):
So yeah.
Speaker 2 (12:12):
The other thing that so this week was Michael Saylor
of well I used to be call my micro strategy
micro strategy and now it's called strategy. And so he
sold I mean, compared to his bitcoin stash, it was
a handful of bitcoins, but it was thirty two bitcoin
and he's meant to be mister diamond hands buying Hoddle forever.
Speaker 3 (12:34):
Yeah, four years.
Speaker 2 (12:38):
Yeah, I mean that's got the knock up a bit
of the window of people's sales with the thought. But yes,
I guess we shall see what happens with that one
and then turn into oh god, there's a great There
was a great quote in one of our colleagues kind
of columns this week, Lionel Laurent who walks out of Bryan,
(13:00):
and he'd written a piece about basically who Europe doesn't
create big companies. They sort of you know, it's something
we all complain about a bit. And there was talking
about risk a version and he quoted this anonymous banker saying, yeah,
in the US, if he asked to buy a risky
I said, they will sort of give you something amazing,
like in the video or something. And he said, if
(13:21):
you're do in Europe, they'll give you guilts. Okay, so
have a high risk as Yeah. So, speaking of which again,
we saw there was a story out today kind of
like the EI Top Points saying, yeah, the government should
be persuading the likes of you and I to stick
more of our savings into guilts. Yeah, so what's the
(13:41):
story here.
Speaker 3 (13:42):
Well, kind of this is kind of an eternal debate.
It feels like it's an internal debate in the UK,
which is trying to get people in the UK at
the moment just sort of keep their money in their
current accounts, sometimes not even in ices or savings accounts,
just sat there earning a pretty pretty small amount of
interest to get them to invest, you know, in the market.
This there's a big push to do stocks previously. This
(14:04):
isn't a government push. This is the government being urged
to do something. And gilts have become quite a bit
more popular with retail investors over the course of the
list because yields are pretty high, you know, and so
they have got more popular, but certainly nowhere near the
kind of investment kind of depth that you would see
see in the US. So there's a push yet because
there's about two trillion pounds deposits that could be put
(14:26):
to work in the guilt market. And you know, the
argument is perfectly sensible, right, you will get a much
better return from buying gilts than you will from leaving
your money into posits, no question, That is no question.
Even if gilts have the best year they've had in
well maybe ever you'll still get a better return from
buying Gilts. But one of the things that puts I
(14:47):
think in a lot of investors off buying stocks is volatility.
You know, and UK investors in general are just enormously
risk averse. They are just very frightened of this idea
of stocks going up and down, which I can tell
you they do every single day. And Gilts, particularly in
the last couple of months, have been much more volatile
because of the you know, the war in Iran and
the inflationary effects and the shift in the in the
(15:09):
Bank of England curve that's happened. So the daily moves
are much more significant. They I mean, if anything, they
sort of backed, you know, they look a little bit
like stocks know them at the moment. So getting people
to do that is just so hard, you know. And
you know, John, you've writ about this extensively your career, probably,
but it is. It is really complex because I was
(15:31):
I was saying on the desk earlier today that I
think in order to actually get this behavioral change to happen,
you sort of need kind of everything to all go
in a kind of positive direction all at once. For
an extended period of time, and that has not happened
in this country for a long time.
Speaker 2 (15:48):
I mean, I do want it. I think sim in
French over at time, your liberalm who comes on and
fairly often said recently sort of like suggested that one
thing the government could do if they basically made gilts
h T Yeah, and I think that would work really well.
I agree, yeah, And actually I almost think that politically
(16:11):
it's one of those things that you could because obviously
one reason that they don't cut high HD apart from
you know, they need the money. But obviously it's very
easy to paint that as a tax cut for the
ultra wealthy. But if you say, well this demonstrates patriotism
and on therefore you should be rewarded for it, then
(16:33):
you know, I think it's actually an easy political self,
particularly because if you actually got two trillions worth of
cash going into the gilt market, then you know, you
could probly turn and say, well, the amount of money
that's going to knock off the interest right that we pay, yeah,
he's going to save us more and become we make
from IHD. So I mean, maybe, you know, I think
(16:54):
if you just dangle the right carrot for the people.
Speaker 3 (16:58):
I actually I don't disagree with that. I think that,
but but I think the problem, unfortunately, this is just
an eternal problem here. It certainly has been for a
for a for an extended period of time now is
that getting the government to make a move like that
is just incredibly difficult because they they almost feel hamstrung
on just almost on every measure they possibly could. So
(17:18):
when they're launching this new you know, this new campaign
to get people to invest, they've got.
Speaker 1 (17:22):
This savvy the squirrel, you.
Speaker 3 (17:24):
Know, which is the kind of thing that in the UK,
I think investors just think is really silly and and
they don't you know, they therefore don't really take it
very seriously. And I think there must be a kind
of better way to communicate these things. The slight optimism
I would have that maybe it's going to start to shift.
Return investing has grown here, you know, not you know,
(17:45):
it has you know, quite a reasonable pace.
Speaker 2 (17:48):
You know, it's not it's not as much the we
stand though it has been ultra risks stands having a
very ag key to highly involved population. They have to
do the tax.
Speaker 1 (18:01):
Yeah, no, that's true.
Speaker 3 (18:02):
I mean across Europe it's a pretty similar picture. And actually,
you know, we do have a really strong financial services
sector here, so there are lots of providers and there
is good, you know, decent competition in it and it
is increasing. I think what may start to help a
little bit is there's another really good story that was
on the terminal this this week about the housing market.
(18:23):
You know that that you know, millennial home buyers, you know,
you bought some sort of ten years ago. The entire
dynamic that they brought into I'm going to buy this
house and this is going to be my this is
going to help me to build my wealth over the
course of my lifetime has been you know, totally upended.
And if that is the case, because for such a
long time, that's how you built wealth in the UK
is you bought a house. If that stops being the
(18:45):
being the case and doesn't certainly in the short term,
doesn't look like it's going to turn round, then that
may well prompt people to start thinking, oh, okay, well
what else can I do? And there are lots of
options to do that, and if you do start to
then see a bit more appetite, that might push you know,
the government order on the stock exchange of various different
stakeholders to maybe make some slightly more radical moves.
Speaker 2 (19:09):
I think that's a really good point actually, because something
if something wrote recently based on some research from Schroeders
that Dunk and La want over there just going to
like pull together number the numbers that show that buying
large investment in the stock market would be investing in
property in the UK. And what I was a guest
surprised about was there just wasn't that much pushback. And
(19:32):
that's not something like I mean if you've written that
even even ten years ago, let alone twenty years ago.
In fact, I remember writing something like that about twenty
years ago and the amount of you know, venom and
how could you possibly say this? Yeah so yeah, so
I mean that is you're right. I think that's if
people start to realize that, well, you know, your house
is not going to be your pension and it hasn't
(19:55):
been for a long time. Yeah, well what you left
wy you know, you're going to have to take a
shot of stocks.
Speaker 3 (19:59):
Yeah, and as you've written about this week as well,
this Pension's UK report that came out about what you
would you know, the estimate you would need for this moderate.
You know, it's a comfortable amount of money for retirement.
I mean if assuming that people are indeed reading that,
I think some eyes will be opened. Yeah, you know,
it's I would I would argue that it is still
it's not a disaster like you know, as I think
(20:22):
you've argued as well, John, it would it's okay, like yeah, yeah, yeah, exactly,
don't panic about it. But I would hope that would
prompt some people to think about these and I wonder
whether that is the thing that will start this behavioral change.
But you know, in the end as well, in the UK,
to be blunt, we're often just really cynical and miserable
(20:43):
about all these things, and we we are not. We
just feel as though if I put my money there,
I'm probably gonna lose it, and so I'll just keep
it in an account. So it's such a complex behavioral
change that's required, but I'm optimistic. I think it could happen.
Speaker 1 (20:57):
Exactly.
Speaker 2 (20:57):
I don't know. We other get in that center as
in form women, there's none ever on this podcast. Thanks
very much, Sam, really appreciate your time again and where
can people find you? Markets Today?
Speaker 3 (21:08):
Markets Today Live Blog, which, as he's mentioned. You can
get to you from the homepage and from the New
Money vertical on.
Speaker 2 (21:13):
The website smoothly down. Thanks for listening to this week's
Men and Talks Money Debrief. If you like a show,
rate review, and subscribe wherever you listen to podcasts, be
sure to follow me on X or Twitter at joint
(21:35):
Underscores topic. This episode isroduced by Summer, Sadi and Mosses
and questions and comments on the show and all the
shows always welcome. Our show email is Melon Money at
bloomberb dot and het and a very special thanks again
to Sam Unstead. Sam, where can we follow you on X?
Speaker 3 (21:52):
On the well most of these days on LinkedIn LinkedIn
of course, but on the Markets Today livelog, which is
on the UK website
Speaker 1 (22:10):
M
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:18):
Welcome to the Merton Talks Money Market Wrap, where we
talk about the biggest moves and markets this week and
watch driving them. I'm joined Stepic, senior reporter and author
of the Moneyed Still newsletter, in for Merden this week
because she's away this week. Join me in studio is
Sam Unstead, who is the editor of the Markets Today blog,
which you should all be following religiously. Can access it
from the Bloomberg homepage. Are also from our new Bloomberg
(00:40):
Money page, which launched this week. Sam, thank you once
again for joining this. And Oh, there are so many
things that we could talk about, but I think we
will start off with SpaceX.
Speaker 3 (00:55):
Yeah, yeah, I think that's right.
Speaker 2 (00:56):
So we got a price now, haven't we. Well, what
they want to is what they hope they will get.
Speaker 3 (01:02):
We know what they want to raise, which is seventy
five billion dollars, so the biggest IPO ever. You know,
there is so much writing going on about SpaceX right
now because this is and it is an enormous story.
Speaker 1 (01:17):
It's an it's sort.
Speaker 3 (01:18):
Of a both incredible and incredibly weird company. You know,
they they do chatbots, they do rockets, they do satellites.
They want to put data centers, yeah fatally, yeah, yeah,
they want to have data centers orbiting the Earth. And
I mean I was, you know, building a data center
on Earth is quite hard, so then getting it up
into space is going to be difficult too. But enormous
(01:42):
you know, potential addressable market. All these kind of huge
numbers being thrown around. Also though a huge amount of
it is going to retail investors being offered potentially up
to a third of it. Yeah, we retail invests. That
is an enormous amount of money, you know, getting on
for nearly what twenty close to twenty five billion dollars
retail investors. So it's going to be a huge test
(02:03):
of the momentum in markets.
Speaker 2 (02:05):
Because one of the things that everyone's been talking about
and I think makes an awful lot of sense in
Martin Levine obviously for Bloomberg, is very good on this
sort of thing, is the I guess the amount of
artificial potential to mind for these shares, because I'm right
in saying that the big in disease, a lot of them,
(02:28):
not all of them, but at the big indsees have
largely been relaxing the entry rules for IPOs of the
same size as space. Yeah, so we got to get
into in the IPOs and things like Anthropic that coming
down the pipe will basically be able to go into
big in disease almost straight away or within a few
weeks or even a few days of trading.
Speaker 1 (02:50):
Yeah.
Speaker 3 (02:51):
Well, may it may actually be a bit more complicated
than that once we get round to it, because we
are talking about an enormous amount of extra capital going
into the market, and so you know, the SMP or
the NASDAQ one hundred, you know, in the US may
have to sort of really rethink the whole way that
it's weighted, not not just because of space expec you
just mentioned Open AI, Anthropic. You know, between those three companies,
(03:14):
you're talking three and a half four trillion dollars worth
of company. You know, that's that's a lot. You know,
it's more than the entire size of the foot see
one hundred. So it is unfortunately, but it is you know,
it is a it's not just a test really of
investors and their appetite to keep buying these kind of things.
You know, these kind of you know, particularly the AI story.
(03:36):
You know, when it comes to SpaceX and the data
center side of things, as well as the kind of
space aspect to it. It's a test of how the
market can handle it, literally, how the structure of the
market can handle this sort of size of company coming on,
whether it starts to impact trading in other things. You know,
I don't know, you know, because we don't know because
we haven't seen it happen yet. You may well get
(03:58):
more money coming in from wealthier investors that can that
can eat up a lot of the extra capital that
that's coming onto the market. But it's going to be
a really complicated thing for for all of the index
providers to to put these companies on there.
Speaker 2 (04:09):
Oh yeah, I suppose one thing I've been thinking, and
I know again I'm not unique in suggesting this, but
if anything might for one of a bit about break
passive investing, this could be the thing that does it. Yeah,
in terms of tilting, I guess tilting them. But you've
already got huge sector concentration. I mean, so if you
(04:33):
just lump another massively eye company and on top of
the rest of them, yeah, then you know you're kind
of turning the end of seas at one big concentrated
bit or in a very specific sector. And then also
that's where a huge chunker, not just the US but
the world's pension money is setting as well.
Speaker 3 (04:50):
Yeah, that's that's a really good point actually, And actually
when you look at the the S and P five
hundred over the course of sort of this year and
actually it's going back sort of a year or so,
almost all of the gains are AI stocks. If you
take out the AI stocks, almost basically everything else is
just sat there, you know. And so you're right that
it's not just a concentration in big technology companies, which
is which already exists.
Speaker 1 (05:11):
Right.
Speaker 3 (05:12):
So the kind of like the trillion trillion plus cohort
in the US, you know, is already making up about
nearly a third of the S and P five hundred,
So that's still a lot of concentration risking is kind
of what ten to fifteen stocks, So already you have
that if you then concentrate it even further to just
one industry and SpaceX. You know, one of the things
(05:32):
that's going to be debated very strongly with SpaceX is
that they're looking for evaluation, which is just by any standard,
absolutely enormous, right, and they make I think it's about
in their last filing it was eighteen point seven billion
dollars of revenue, so their revenue multiple would be absolutely enormous.
So to deliver on that, you know, is going to
(05:54):
be very complicated. But then, I mean you and I
have actually spoken about this previously. Valuing a company where
Elon Musk is is really hard because there is a
kind of intangible thing that he brings to it, you know,
you know, that is a bit beyond kind of traditional
metrics on how to has value. At Tesla, for example,
their share price is just completely divorced from their earnings.
(06:17):
You know, so what SpaceX does you know, when you're
looking at funded against the fundamentals, may ultimately not really
be the question.
Speaker 1 (06:24):
I mean, you're right.
Speaker 2 (06:25):
I mean it's interesting because I do think the Musk
then he clearly has an extraordinary talent, and he has
built some extraordinary companies. And then you know, for all
that he's got his critiques, he's also not just you know,
he's not a chiant in terms of now there's a
lot of concrete stuff behind them. And I suppose the
(06:46):
other interesting thing with Tesla is that you know, law no, no,
I mean I think it's fairly see it is the
company that put the electric car on the mark, and
without him, the electric cars would almost certainly not have
taken off. And that's you know that there's a kind
of historic counterfactor there, and anyone that cares about the
(07:07):
environment should probably be very grateful to them. In fact,
But now Tesla has competition from lots of other electric
car manufacturers. It also is competition from lots of other
self drive manufacturers, and yet it still manages to not
succumb to any kind of fundamental I suppose. Yeah, And
I mean, as you say, it's one thing to think,
(07:30):
I mean, you might have faith in SpaceX because of
Tesla defying gravity all the time, but you are kind
of like, also, well, look, Tesla by now should really
is at least there is a context, there's a world
in which you can say, well, this is where the
valuation should be. You know, this is you know, he's
got competition from everywhere else, and it's not as if
he's doing it and else with Tesla. That yeah, adds
(07:52):
that kind of you know gennes qua. So I just
I just wonder where it is exactly he's got going
for them, apart from people just think, oh well, look,
if he's in it, then there must be yeah something.
Speaker 3 (08:05):
Now, I think the big difference you have to remember,
I suppose with Tesla. I mean that Tesla make cars, right, Yeah,
we are a car one yeah, so like and they
just made it electric, right, so they it's I agree
with you, it's I don't. I don't think we'd be
anywhere near where we are on EVS without without Tesla
having kind of boomed and kind of pulled everyone in
that direction. But you know, SpaceX that the AI part
of the business, you know, is already extremely competitive with
(08:29):
companies that are enormous and incredibly you know powerful, will
probably list later in the years, we said, anthropic, open AI,
et cetera, backed by a lot of the biggest companies
in the world as well, so'd be hard for them
to compete there. And then the other side of it
is space, and like I said, it is it is
involving things like taking a data center, and look, data
centers are really big, you know, they are massive, and
(08:50):
so getting that up into space is it's an incredible
idea and if he pulls it off, it would be
astonishing though whether he can pull that off in his
lifetime even is you know, debatable. So it's a very
different type of story, but there is across both this
just intangible kind of musk premium that's on the valuation
and whether that holds for SpaceX as it does for Tesla,
(09:13):
we'll find out next week.
Speaker 2 (09:15):
Yes, we're looking forward to it. Speaking of tangible orders
and fallibility and questions about how do you value these things?
Bat coins that are terrible and as they said, the terrible, Yeah,
it is. Basically I was looking down mark kin a
Bloomberg list of you know, prices to watch and yet
(09:38):
today is down about thirty percent and that kind of
basically makes it like, well within the bottom ten what's
performing major assets on the planet this year?
Speaker 3 (09:47):
Yeah, and you know there there are potentially kind of
quite a few reasons as to why that is. You know,
I think, particularly the most recent kind of shift, I
think a bit of momentum has gone out of it. Right, so,
you know, to Donald Trump got in and as it
sort of hit some highs, it was a sort of
one hundred and twenty one hundred and twenty four five
thousand dollars. You know, a lot of that was this
institutional money coming in. You know, sort of giving credibility
(10:11):
to a market that previously had really struggled with credibility
that's now there. And so you could argue that there's
an element of it where just the air has gone
out of it, and maybe a bitcoin is.
Speaker 1 (10:19):
Sort of a bit boring.
Speaker 3 (10:20):
It's not as interesting as it used to be and
not as exciting. And some of that may also be
because of AAI. You know, the amount of money that's
being spent on AI is so astronomically enormous, you know,
I mean to the point where you know, it's another
big story. Over this week, Alphabet is raising eighty billion
(10:41):
dollars in a stop offering in order to back their
AI spending. That that is just so out of the
realms of what Alphabet do. It's just not something that
normally happens.
Speaker 2 (10:52):
Well, it's interesting that they sneaked it before space. It's
hard well because they're basically sitting They're going, yeah, moved,
he's going to have any money or left?
Speaker 1 (11:00):
Yeah, a bit bit on.
Speaker 3 (11:02):
But that's just one stock offering by one company. This
enormous amount of debt that that you know, next year,
there's a blue Bug Intelligence forecast that next year that
capex spending by the hyperscalers will hit a trillion dollars
for the year, you know, not total, that's just for
next year. That is pulling so much attention and so
much capital, so much money that places like Bitcoin that
(11:24):
used to be this kind of like this is the
new way to do finance, This is going to change everything.
Just that excitement maybe has gone out of it a
little bit. And then it's it's maybe also acting in
a way that it wasn't at the beginning of the
year as a risk asset again. You know, they had
this little moment last year, this question of you know,
do we still buy the dollar, which it turns out
(11:46):
you do, and you know where bitcoin benefited from that
bit Bitcoin and gold of course at the time, and
maybe that's gone out of it too. You know, maybe
again people have thought are actually gold and bitcoin aren't
the same, you know.
Speaker 1 (11:59):
So yeah.
Speaker 2 (12:12):
The other thing that so this week was Michael Saylor
of well I used to be call my micro strategy
micro strategy and now it's called strategy. And so he
sold I mean, compared to his bitcoin stash, it was
a handful of bitcoins, but it was thirty two bitcoin
and he's meant to be mister diamond hands buying Hoddle forever.
Speaker 3 (12:34):
Yeah, four years.
Speaker 2 (12:38):
Yeah, I mean that's got the knock up a bit
of the window of people's sales with the thought. But yes,
I guess we shall see what happens with that one
and then turn into oh god, there's a great There
was a great quote in one of our colleagues kind
of columns this week, Lionel Laurent who walks out of Bryan,
(13:00):
and he'd written a piece about basically who Europe doesn't
create big companies. They sort of you know, it's something
we all complain about a bit. And there was talking
about risk a version and he quoted this anonymous banker saying, yeah,
in the US, if he asked to buy a risky
I said, they will sort of give you something amazing,
like in the video or something. And he said, if
(13:21):
you're do in Europe, they'll give you guilts. Okay, so
have a high risk as Yeah. So, speaking of which again,
we saw there was a story out today kind of
like the EI Top Points saying, yeah, the government should
be persuading the likes of you and I to stick
more of our savings into guilts. Yeah, so what's the
(13:41):
story here.
Speaker 3 (13:42):
Well, kind of this is kind of an eternal debate.
It feels like it's an internal debate in the UK,
which is trying to get people in the UK at
the moment just sort of keep their money in their
current accounts, sometimes not even in ices or savings accounts,
just sat there earning a pretty pretty small amount of
interest to get them to invest, you know, in the market.
This there's a big push to do stocks previously. This
(14:04):
isn't a government push. This is the government being urged
to do something. And gilts have become quite a bit
more popular with retail investors over the course of the
list because yields are pretty high, you know, and so
they have got more popular, but certainly nowhere near the
kind of investment kind of depth that you would see
see in the US. So there's a push yet because
there's about two trillion pounds deposits that could be put
(14:26):
to work in the guilt market. And you know, the
argument is perfectly sensible, right, you will get a much
better return from buying gilts than you will from leaving
your money into posits, no question, That is no question.
Even if gilts have the best year they've had in
well maybe ever you'll still get a better return from
buying Gilts. But one of the things that puts I
(14:47):
think in a lot of investors off buying stocks is volatility.
You know, and UK investors in general are just enormously
risk averse. They are just very frightened of this idea
of stocks going up and down, which I can tell
you they do every single day. And Gilts, particularly in
the last couple of months, have been much more volatile
because of the you know, the war in Iran and
the inflationary effects and the shift in the in the
(15:09):
Bank of England curve that's happened. So the daily moves
are much more significant. They I mean, if anything, they
sort of backed, you know, they look a little bit
like stocks know them at the moment. So getting people
to do that is just so hard, you know. And
you know, John, you've writ about this extensively your career, probably,
but it is. It is really complex because I was
(15:31):
I was saying on the desk earlier today that I
think in order to actually get this behavioral change to happen,
you sort of need kind of everything to all go
in a kind of positive direction all at once. For
an extended period of time, and that has not happened
in this country for a long time.
Speaker 2 (15:48):
I mean, I do want it. I think sim in
French over at time, your liberalm who comes on and
fairly often said recently sort of like suggested that one
thing the government could do if they basically made gilts
h T Yeah, and I think that would work really well.
I agree, yeah, And actually I almost think that politically
(16:11):
it's one of those things that you could because obviously
one reason that they don't cut high HD apart from
you know, they need the money. But obviously it's very
easy to paint that as a tax cut for the
ultra wealthy. But if you say, well this demonstrates patriotism
and on therefore you should be rewarded for it, then
(16:33):
you know, I think it's actually an easy political self,
particularly because if you actually got two trillions worth of
cash going into the gilt market, then you know, you
could probly turn and say, well, the amount of money
that's going to knock off the interest right that we pay, yeah,
he's going to save us more and become we make
from IHD. So I mean, maybe, you know, I think
(16:54):
if you just dangle the right carrot for the people.
Speaker 3 (16:58):
I actually I don't disagree with that. I think that,
but but I think the problem, unfortunately, this is just
an eternal problem here. It certainly has been for a
for a for an extended period of time now is
that getting the government to make a move like that
is just incredibly difficult because they they almost feel hamstrung
on just almost on every measure they possibly could. So
(17:18):
when they're launching this new you know, this new campaign
to get people to invest, they've got.
Speaker 1 (17:22):
This savvy the squirrel, you.
Speaker 3 (17:24):
Know, which is the kind of thing that in the UK,
I think investors just think is really silly and and
they don't you know, they therefore don't really take it
very seriously. And I think there must be a kind
of better way to communicate these things. The slight optimism
I would have that maybe it's going to start to shift.
Return investing has grown here, you know, not you know,
(17:45):
it has you know, quite a reasonable pace.
Speaker 2 (17:48):
You know, it's not it's not as much the we
stand though it has been ultra risks stands having a
very ag key to highly involved population. They have to
do the tax.
Speaker 1 (18:01):
Yeah, no, that's true.
Speaker 3 (18:02):
I mean across Europe it's a pretty similar picture. And actually,
you know, we do have a really strong financial services
sector here, so there are lots of providers and there
is good, you know, decent competition in it and it
is increasing. I think what may start to help a
little bit is there's another really good story that was
on the terminal this this week about the housing market.
(18:23):
You know that that you know, millennial home buyers, you know,
you bought some sort of ten years ago. The entire
dynamic that they brought into I'm going to buy this
house and this is going to be my this is
going to help me to build my wealth over the
course of my lifetime has been you know, totally upended.
And if that is the case, because for such a
long time, that's how you built wealth in the UK
is you bought a house. If that stops being the
(18:45):
being the case and doesn't certainly in the short term,
doesn't look like it's going to turn round, then that
may well prompt people to start thinking, oh, okay, well
what else can I do? And there are lots of
options to do that, and if you do start to
then see a bit more appetite, that might push you know,
the government order on the stock exchange of various different
stakeholders to maybe make some slightly more radical moves.
Speaker 2 (19:09):
I think that's a really good point actually, because something
if something wrote recently based on some research from Schroeders
that Dunk and La want over there just going to
like pull together number the numbers that show that buying
large investment in the stock market would be investing in
property in the UK. And what I was a guest
surprised about was there just wasn't that much pushback. And
(19:32):
that's not something like I mean if you've written that
even even ten years ago, let alone twenty years ago.
In fact, I remember writing something like that about twenty
years ago and the amount of you know, venom and
how could you possibly say this? Yeah so yeah, so
I mean that is you're right. I think that's if
people start to realize that, well, you know, your house
is not going to be your pension and it hasn't
(19:55):
been for a long time. Yeah, well what you left
wy you know, you're going to have to take a
shot of stocks.
Speaker 3 (19:59):
Yeah, and as you've written about this week as well,
this Pension's UK report that came out about what you
would you know, the estimate you would need for this moderate.
You know, it's a comfortable amount of money for retirement.
I mean if assuming that people are indeed reading that,
I think some eyes will be opened. Yeah, you know,
it's I would I would argue that it is still
it's not a disaster like you know, as I think
(20:22):
you've argued as well, John, it would it's okay, like yeah, yeah, yeah, exactly,
don't panic about it. But I would hope that would
prompt some people to think about these and I wonder
whether that is the thing that will start this behavioral change.
But you know, in the end as well, in the UK,
to be blunt, we're often just really cynical and miserable
(20:43):
about all these things, and we we are not. We
just feel as though if I put my money there,
I'm probably gonna lose it, and so I'll just keep
it in an account. So it's such a complex behavioral
change that's required, but I'm optimistic. I think it could happen.
Speaker 1 (20:57):
Exactly.
Speaker 2 (20:57):
I don't know. We other get in that center as
in form women, there's none ever on this podcast. Thanks
very much, Sam, really appreciate your time again and where
can people find you? Markets Today?
Speaker 3 (21:08):
Markets Today Live Blog, which, as he's mentioned. You can
get to you from the homepage and from the New
Money vertical on.
Speaker 2 (21:13):
The website smoothly down. Thanks for listening to this week's
Men and Talks Money Debrief. If you like a show,
rate review, and subscribe wherever you listen to podcasts, be
sure to follow me on X or Twitter at joint
(21:35):
Underscores topic. This episode isroduced by Summer, Sadi and Mosses
and questions and comments on the show and all the
shows always welcome. Our show email is Melon Money at
bloomberb dot and het and a very special thanks again
to Sam Unstead. Sam, where can we follow you on X?
Speaker 3 (21:52):
On the well most of these days on LinkedIn LinkedIn
of course, but on the Markets Today livelog, which is
on the UK website
Speaker 1 (22:10):
M
Host
Merryn Somerset Webb
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