SpaceX Debuts on then NASDAQ and Oil Moves

Summary

Bloomberg Surveillance – "SpaceX Debuts on the NASDAQ and Oil Moves"

Date: June 12, 2026
Hosts: Tom Keene, Paul Sweeney (with contributions from Lisa Abramowicz and Annmarie Hordern)
Featured Guests: Sarah Wolf (Morgan Stanley), Ed Hirs (University of Houston), Campbell Harvey (Duke University), Jake Schneider (Atlas Analytics)

---

Episode Overview

This episode delivers a fast-paced breakdown of three major areas currently captivating markets and investors:

• SpaceX's momentous IPO debut on the NASDAQ and its implications.
• Ongoing volatility and structural shifts in global oil and energy markets.
• Emerging roles for AI and satellite data in economic forecasting and the inflation debate.

With expert interviews and sharp analyst perspectives, the show explores how technology, geopolitics, and monetary policy are shaping the landscape for investors into the latter half of 2026.

---

Key Discussion Points & Insights

1. The Rise of Multipolar Competition and the SpaceX IPO

[01:47–04:17]

• Sarah Wolf (Morgan Stanley) contextualizes SpaceX’s IPO within the theme of a "multipolar world." She argues that SpaceX reflects broader trends of supply chain diversification and new technological frontiers like space, amid intensifying international competition.
• Wolf ties the IPO to both global innovation and a fragmented economic environment, suggesting that "we're entering new frontiers such as space where we're competing with the rest of the world on technological innovation and dominating the space atmosphere with satellites."
• The episode repeatedly notes the unprecedented size and hype surrounding SpaceX’s entry, making it "the number seven largest stock in the US by total market capitalization" (Campbell Harvey, [24:20]).

2. AI, Supply, and Inflation – Navigating the Investment Climate

[02:40–07:45]

• AI-driven demand is sharply driving up prices for essential build-out components (chips, GPUs, semiconductors), leading to supply shocks and potentially pushing consumer and producer prices higher.
  • Sarah Wolf:
    “Over the last four or five months, we've been seeing this AI story push up producer prices and start to bleed into consumer prices as well... This build-out story—$800 billion of CapEx this year, over a trillion next year—that's likely to be inflationary.” ([02:51])
• While AI’s long-term effect is seen as disinflationary via productivity, the near-term is dominated by inflationary infrastructure spending and delayed gains at the company level.
  • “Over the long run, AI is likely to be deflationary… But our theme is that adoption and real productivity gains are really hard… Over the next 18 months, it's really going to be inflation driven by the infrastructure capex story...” – Sarah Wolf ([04:17])
• Discussion of monetary policy, expectations for the Fed under new Chair Kevin Warsh, uncertainty/volatility due to lack of FOMC consensus, and a shift toward "higher for longer" rates.
  • “We're going to be entering this world of higher for longer. The last thing I'll say is that we do think that Chair Warsh is going to be focused more on… trimmed inflation mean measures.” – Sarah Wolf ([05:17])

3. Oil Market Realities – Structural Shocks and Scarcity

[10:30–17:05]

• Ed Hirs (University of Houston) details the critical state of U.S. oil storage (“we’re down to about 25 million barrels in storage” at Cushing), forecasts potential for price spikes by mid-to-late July, and underscores the difficulty of rapidly restoring flows even if geopolitical tensions ease.
  • “Remember, when it was 70 million barrels in storage… the price went to zero. So 25 million is kind of at the bottom of the operating range.” ([10:59])
• Hirs describes logistical and infrastructural bottlenecks, from mines in the Strait of Hormuz to LNG supply holes and fields needing pressure and time to return to service, predicting at minimum “three months to clear the strait” and up to “eight months...to get back to pre-war types of levels.”
• The episode offers color on the gritty realities of oil trading, highlighting dubious accounting, the pitfalls of AI overlays in royalty management, and recent missteps by oil majors like Exxon.
  • “Everyone who teaches options trading says never give away the volatility. And for some reason, Exxon did that… So it's really astonishing to see Exxon take this huge hit.” – Ed Hirs ([15:58])
• Light banter about Houston oil business culture and legendary local diners (Avalon Diner).

4. Revisiting Value vs. Growth and the SpaceX Play

[19:54–26:47]

• Campbell Harvey (Duke University), referencing new research with Rob Arnott, challenges the outdated value–growth paradigm, pressing for exclusion of “expensive low growth” stocks:
  • “What’s dead is investing in expensive low-growth stocks. In my opinion, those stocks are losers historically and they should not be in your portfolio.” ([21:44])
  • “Growth should be measured by growth metrics—sales growth, profitability growth, R&D growth—not just the stock is expensive.” ([22:14])
• SpaceX's IPO is named as a quintessential “expensive high growth” stock—potentially deserving allocation but with clear warnings:
  • “By the time it gets to IPO, these stocks are often fully priced and all the explosive growth happened before the IPO. The retail or average investor is left with the residual, the dregs.” – Campbell Harvey ([23:07])
  • IPO retail demand: “Retail nonetheless is going to participate in a big way... the problem is they’re getting in at a very high price.” ([24:20])
  • Questions about Musk’s vision and potential future consolidation with Tesla.

5. New Frontiers in Economic Data: Satellites and AI

[30:12–35:27]

• Jake Schneider (Atlas Analytics) showcases the power of satellite imagery and AI for near real-time GDP forecasting—contrasting government data’s backward-looking nature:
  • “Satellite imagery can be... the macroeconomic data comes out with a lag, it was medieval, we're Renaissance.” ([30:40])
  • Describes their methodology: combining historical imagery archives with machine learning and computer vision to predict headline GDP ahead of official releases. Example: “We predicted on our YouTube... 2% [for Q1 GDP] two weeks before. And it's live timestamped… We are accurate and we are timely… so that traders and policymakers can have insights ahead of the competition.” ([33:47])
• Explains using tangible measures—“the expansion of the built environment, land use, vegetation and port activity”—to forecast economic performance live.
• Key finding: current (Q2) GDP tracking at 2.5–2.7% annualized, with core GDP (“consumption, government expenditure and fixed investment”) slightly higher ([35:00]).

---

Notable Quotes & Memorable Moments

• Sarah Wolf on inflation and capex:
  “This build-out story—$800 billion of CapEx this year, over a trillion next year—that's likely to be inflationary.” ([02:51])

• Ed Hirs on oil shortages:
  “Remember, when it was 70 million barrels in storage… the price went to zero. So 25 million is kind of at the bottom of the operating range.” ([10:59])

• Campbell Harvey on value/growth:
  “What’s dead is investing in expensive low-growth stocks. In my opinion, those stocks are losers historically and they should not be in your portfolio.” ([21:44])

• Campbell Harvey on SpaceX's IPO:
  “The retail or average investor is left with the residual, the dregs. They could not buy the stock earlier on because they are not accredited or qualified.” ([23:07])

• Jake Schneider on new data frontiers:
  “Satellite imagery can be... the macroeconomic data comes out with a lag, it was medieval, we're Renaissance.” ([30:40])

---

Timestamps for Essential Segments

• 01:47 — Macro themes for 2026, multipolar world, SpaceX IPO context (Sarah Wolf)
• 02:51 — Inflation dynamics, AI and capex impact (Sarah Wolf)
• 05:03–07:45 — The Fed, new chair, inflation measures, FOMC dissention (Sarah Wolf)
• 10:30–15:49 — Oil scarcity, market impacts, logistics, geopolitics (Ed Hirs)
• 19:54–22:14 — Rethinking value versus growth, "expensive low growth" stocks' downfall (Campbell Harvey)
• 22:18–26:47 — SpaceX IPO valuation, history, market effects, Musk’s vision (Campbell Harvey)
• 30:12–35:27 — Satellite and AI-powered GDP tracking, real-time data, accuracy vs. official government stats (Jake Schneider)

---

Tone and Style

The hosts blend gravitas with informality—serious technical analysis meets market banter and wry asides (“Are you at the Grove three times a week in Houston?”). Guest experts articulate their insights in accessible terms, connecting data to investors’ real-world choices.

---

Summary Table of Key Guest Insights

| Guest | Segment (min) | Core Insight | |-------------------|------------------|-------------------------------------------------------------| | Sarah Wolf | 01:47–07:45 | Multipolar world, SpaceX as a technological turning point, capex-driven inflation, sluggish AI adoption at firm level, Fed uncertainty | | Ed Hirs | 10:30–17:05 | Oil market at critical lows, slow supply recovery, trading pitfalls in energy | | Campbell Harvey | 19:54–26:47 | Death of “expensive low growth” investing, SpaceX as an expensive high-growth case—caveat emptor for retail | | Jake Schneider | 30:12–35:27 | Satellites + AI = real-time economic insight, accurate GDP calls weeks ahead, practical applications for investors and policymakers |

---

For listeners and investors alike, this episode provides both a ‘big picture’ view and practical signals about today’s market drivers—from the ground (and the skies above) to outer space.

Transcript

[CBOE Announcer]

Looking for more investing options? Meet cboe, the exchange that pioneered options trading. With exclusive trading products like VIX and SPX Options, CBO can help you trade in any market environment. There are risks associated with CBOE Company products. Review the disclosures and [e-mail] USDISclaimers so

[IBM AI Representative]

there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a Global workforce of 300,000 can use AI to fill their HR questions. Resolving 94% of common questions, not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business IBM Being a

[Sarah Wolf]

small business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. Manage all your business finances, from banking to payments to credit cards, all in one place with Chase's digital tools. Plus access online resources designed to help your business thrive. Learn [e-mail] business chase for business Make More of what's yours the Chase Mobile app is available for select mobile devices. Message and data rates. May apply JPMorgan Chase Bank NA Member FDIC Copyright 2026 JPMorgan Chase Co.

[Bloomberg Surveillance Host]

Bloomberg Audio Studios Podcasts Radio News. This is the Bloomberg Surveillance Podcast. Catch us live weekdays at 7am Eastern on Apple CarPlay or Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Tom Keene]

Paul and I have been looking this morning for moments to stop and do more traditional prosaic discussions of economics, finance, investment, of international invasion relations. We can do that with Sarah Wolff at Morgan Stanley Thematic Macro Investing as well. Sarah, what's your theme into the rest of 2026?

[Sarah Wolf]

The biggest theme that we're looking at is around multipolar world and I actually think that the Space X IPO fits right into this where we really are entering a new frontier of this globally fragmented economy where we're seeing intense reshor diversification of supply chains. And now we're entering new frontiers such as space where we're competing with the rest of the world on technological innovation and dominating the space atmosphere with satellites.

[Paul Sweeney]

So Sarah, in the context of a broader discussion of a of inflation, how does I fit into that? Is a inflationary at this point?

[Sarah Wolf]

Well, what we're seeing is that amid all this AI driven demand we're seeing increasing supply shocks at the same time. And so there's these very frag choke points that are causing prices to rise for things like gpu, semiconductors, right? Everything that's going into building out empowering AI. The reality is though, all these things that go into these, into these AI models are also a lot of the same things that go into consumer products. So over the last four or five months we've been seeing this AI story push up producer prices and start to bleed into consumer prices as well. So at a time when the Fed is looking at the tariff effects, hoping that they're going to be abating soon, that oil prices are not going to bleed into core inflation. We also need to be watching the effects on consumer prices. And you know this build out story, $800 billion of CapEx this year, over a trillion next year that's likely to be inflationary.

[Tom Keene]

Okay, so when you and Ellen Zentner sit down over tea on this and I'm looking, I'm featuring a 12 noon today, the Citadel essay, folks. Frank Flight that I thought was really a nice sum of this, the price theory. Sarah Wolf of this is basically falling apart. How do you envision the microeconomics, the price discovery, the scarcity dynamic? How will that work out over the next 18 months?

[Sarah Wolf]

Over the long run, AI is likely to be deflationary, disinflationary. We can all agree on that, right? Once we get these productivity benefits, it's going to lower the cost of goods and services, increase welfare for people. But our theme this is that adoption and real productivity gains are really hard, especially when you look at the micro level on a company by company basis. There's a lot of work and what we call intangible capex that needs to be done at the enterprise level to actually see meaningful adoption and see that disinflationary effect. And I still think we're quite a bit away from that. And over the next 18 months it's really going to be inflation driven by the infrastructure capex story before we get those productivity gains at the company level.

[Paul Sweeney]

SARA we're going to get a Federal Reserve meeting next week and we have a new Federal Reserve chair. I know, it just popped up on my screen. So what are you going to be looking for from the new Fed chair? Wash?

[Sarah Wolf]

Well, we know from the new Fed chair that he favors a little bit less communication and there's a lot of concern for markets that it's going to cause more uncertainty and volatility. My view is that it's not necessarily the communication from Kevin Warsh that's going to cause more uncertainty or volatility, but it's really what's happening on the broader fomc. We're seeing a lack of consensus, more dissents on what the future policy path should be and that is going to cause more uncertainty. For the Fed meeting itself, we're going to get a summary of economic projections. The last one we got was in March. A lot has changed in the last few months. Growth is coming in stronger, but at the same time inflation is higher. And what we're seeing among economists and the FOMC is more of a consensus that neutral is higher. And so that cut for this year is going to be taken out of the projections, likely a cut or two for next year as well. And we're going to be entering this world of higher for longer. The last thing I'll say is that we do think that Chair Warsh is going to be focused more on these trimmed inflation mean measures.

[Tom Keene]

Interesting.

[Sarah Wolf]

So we know core PCE is above 3% but if you look at the Dallas trim mean, it's closer to 2%. So that's, that's a little bit more favorable for easier policy.

[Tom Keene]

I want to get you in trouble. There's a huge. You know how many people they have. I know working under Ellen Zentner in Sarah wolf, it's like 42 people or whatever. In your meeting, Sarah Wolf, how disparate is trimming Cleveland and all the rest from PC. What's that research paper look like for Monday?

[Sarah Wolf]

Well when if you look at the trimming, they're basically trying to pull out outliers that are causing one off pushes in inflation. Right. So you have the oil shock, terror shock rate. These are not seen as inflationary pressures but price shocks. And so these trend means are trying to, are trying to push out and clean the data for, for this more these more volatile categories of inflation. Sir.

[Tom Keene]

Gotta leave it in my view, sir.

[Sarah Wolf]

Okay, well the last thing I'll add is that.

[Tom Keene]

Please.

[Bloomberg Surveillance Host]

All right.

[Tom Keene]

No, please.

[Sarah Wolf]

I'll add is that for the, for the, for the FOMC and for the Fed chair, we saw this over the last six years where they like to look at measures of inflation that help reinforce their views. So this could go out of fashion in the next six months if we see the trim mean rise above regular core.

[Tom Keene]

Brilliant, Sarah. Well, thank you. Thank you so much for the brief, Paul. Thanks for bringing up the Fed. How quaint on a Friday before the Fed meeting. Ms. Wolf is with Morgan Stanley. Stay with us. U.S. more from Bloomberg Surveillance coming up after this.

[CBOE Announcer]

When your options are limited, so are your opportunities. At cboe, the global exchange that pioneered options trading, we offer more ways to move with the market, from VIX and SPX options to Global Market Data Solutions. CBOE helps investors diversify, manage risk, and stay ahead of whatever the market does. Next Life is better. With options, your investments could be too. There are risks associated with CBOE Company products. Review the disclosures and disclaimers at cboe.com

[IBM AI Representative]

usdisclaimers the thing about AI for business? It may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.

[Paul Sweeney]

IBM Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific, like biotech companies with high R and D spend, small cap stocks with improving operating margins, or the S&P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on Public you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks, go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market and paid for by Public Holdings Brokerage Services by public investing member FINRA SIPC advisory services by public advisors SEC registered advisor crypto services by ZeroHash. Sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures at public.com/disclosures.

[Bloomberg Surveillance Host]

You're listening to the Bloomberg Surveillance Podcast. Catch us Live weekday afternoons from 7 to 10am Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.

[Tom Keene]

We are advantage here. There's a side story going on today, which is the gamble over what a barrel of oil can do. Ed, her senior fellow, University of Houston Here in our studios in New York, I see the Charts and the graphs that say we're really, really low in our storage of oil. Define what that means. Is that like Cushing, Oklahoma, the barrels are almost empty. What does it actually mean?

[Ed Hirs]

They're getting really worried. In Cushing, we're down to about 25 million barrels in storage. For contrast, when it was 70 million barrels in storage and over, the price went to zero. So 2025 is kind of at the bottom of the operating range. We're well past the five year averages on the downside or outside that band, if you will. And the 20 million we're moving barrels here or there and we're about to get to a point where it's difficult to mix or match the supplies to the refineries we need.

[Tom Keene]

Do you agree with many quotes, mid July, first week of July, last week of July, at some point out there, boom, we get higher oil prices.

[Ed Hirs]

Absolutely. I can't argue with the CEOs of Exxon and Chevron. That's a losing game. They don't ever come out and make public announcements like this. It's the physical market and we've already seen jet fuel at $200 a barrel in northern Europe, we've seen diesel at $150 a barrel here in the U.S. we're really fortunate. We've got plenty. We produce about 14 million barrels a day. We export about four and a half on average. We imported 6.2 last year, four plus from Canada. And that's not going anywhere from the Strait of Hormones. We were only getting about 490,000 barrels a day. You know, we can buy it, but what we're doing is we're selling it. I mean, anyone with a commercial inventory sold it. In the second week. Exxon chartered tankers and started sending gasoline to Asia.

[Tom Keene]

Magic day for us in hydrocarbons. Anne Marie Horton Paul at the Bloomberg Energy Security Executive Briefing in Houston. In Edhurst, Houston, Michael Wirth, Mike Wirth engineer From Colorado, Chevron CEO will be with AnnMarie Horden. Look for that 11 o'. Clock.

[Paul Sweeney]

If peace breaks out today, how long will it take to really get oil flowing? It seems like there's ships on both sides of this strait here. How does that play out logistically?

[Ed Hirs]

It's not just the ships, but it does take time. The US Navy has said it'll take three months to make sure the strait is clear of mines. And probably with the way the US has attacked the Iranian mine layers, Iran doesn't know where the mines are. And you know, the intel sources in Washington are saying that Iran has now let the genie out of the bottle, or the US has left the genie out of the bottle and shown that Iran has control of the strait. The hundreds of miles along the strait. And they've got drones that, you know, we could buy at Target or Walmart that they put some explosives on, can fly into the bridge of a ship. There's no way to defend against that. And it's. Iran has been stating that they're, they're going to maintain the strait, put a toll on it. That's, that's going to be a cost going forward. So at least three months to clear the strait to get back to what may be normal throughput. But Kuwait's got to put its wells back online. Saudi Arabia has had a bunch of wells shut in. Remember, Qatar has, has lost its LNG market for now. Part of it won't be back for at least three to five years as they rebuild. And that's a big, big hit on the diesel market because a lot of nations are using diesel in place of the lng. So the market to get back to pre war types of levels, maybe eight months at best, don't think it's going to get below $70 a barrel.

[Paul Sweeney]

What are the US producers doing? I mean, I feel like I want to run down to Houston, put a hole in the ground and start drilling oil. I can make money at $90 a barrel. I watch Landman. I know how to do this stuff. How's this going?

[Ed Hirs]

Landman is, is, is the real world is just so much worse than Landman. Okay.

[Tom Keene]

Really?

[Ed Hirs]

Absolutely.

[Tom Keene]

Now I'm sitting up. Interesting discuss. Let's stop the show right here. What does Landman's greed and voracious drama get wrong?

[Ed Hirs]

I, you know, go back to the television show Dallas. I mean, that was much more like it. The, the shenanigans, the double dealing, the, the things behind the curtain that no one in the real world ever sees. Right now we're seeing a lot of the smaller independents and especially the royalty funds running for the exits as fast as they can because they played loosey goosey with all of their backroom data stuff. Don't trust AI. The AI overlays that people are putting on royalty payments, payments to owners, those aren't lining up. And the accounting companies, the auditors can't catch it. They aren't going back to the paper trails.

[Tom Keene]

Is this like lunches at the Grove? Like, are you at the Grove three times a week in Houston?

[Ed Hirs]

Oh, gosh.

[Tom Keene]

Doing handshake. Handshake.

[Ed Hirs]

No, no, no.

[Tom Keene]

Guests and drama.

[Ed Hirs]

Thinking of the Avalon Diner. That's where people go. And you know, so a lot of the companies, and we saw this with Exxon, Exxon just dismissed its trader, did what can only be called a bonehead swap at say $70 a barrel and so missed out on all the upside. Everybody who teaches options trading says never give away the volatility. And for some reason Exxon did that. And the irony is Lee Raymond just passed away in a Forbes cover story, his last cover story before he stepped down, he said, I don't do trading. We don't trade and hedge at Exxon. Why would I need to be an oil company? I would just have a couple of traders for the volume, the financial. I wouldn't need geologists, I wouldn't need engineers, I wouldn't need finance guys. And so it's really astonishing to see Exxon take this huge hit because as the price has gone up to 90 and $100 a barrel, Exxon hasn't been able to participate in that. Oh, they're still collecting $70 a barrel.

[Tom Keene]

You know, Paul, you can go to Nuevo's Rancheros at the Avalon Diner or you can get the chicken fried steak, which is, I mean a guy. I love that this is as good uses. This is Editors Recommended yeah, it's, it's quite good. It's quite good. We're going to do a remote Forget about Anne Marie Horden in Houston. We're doing surveillance at the Avalon Diner. Professor Hearst, thank you so much for joining us with serious wisdom here. And a gallon of gasoline, a barrel of oil. Stay with us. More from Bloomberg Surveillance coming up after this.

[Sarah Wolf]

What if you could have even more and more and more help to pursue your goals? At LPL Financial, we offer more ways for advisors and their clients to thrive. So what if you could Paid Advertisement Investing involves risk, including potential loss of principal. LPL Financial LLC Member FINRA SIPC Support

[Paul Sweeney]

for the show comes from public. Public is an investing platform that offers access to stocks, options, bonds and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R and D spend, small cap stocks with improving operating margins or the S&P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on public you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks, go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by Public Investing member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor crypto services by ZeroHash. Sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete [e-mail] disclosures Ryan Reynolds here

[IBM AI Representative]

from Mint Mobile with a message for everyone paying Big wireless way too much. Please, for the love of everything good in this world, stop with Mint. You can get premium wireless for just $15 a month. Of course, if you enjoy overpaying, no judgments. But that's weird. Okay, one judgment anyway. Give it a [e-mail] Switch upfront payment

[Sarah Wolf]

of $45 for three month plan equivalent to $15 per month required Intro rate first three months only, then full price plan options available, taxes and fees extra. See full [e-mail].

[Bloomberg Surveillance Host]

Youm're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10am Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.

[Tom Keene]

Campbell Harvey joins us from Duke University right now. Kim, congratulations on this work with Rob Arnott. You shake to your foundations the core value growth paradigm. If that doesn't work anymore, what does work?

[CBOE Announcer]

Well, I think we need to look at it differently. And traditionally what's not a value stock is a growth stock. And indeed, if you look at for example, the Russell 1000 value and the Russell 1000 growth and you put a portfolio of those two together, then you get the Russell 1000. And that means that if the stock is not in the value portfolio, it's in the growth portfolio. Which means, and this is kind of in a way shocking that people will be holding expensive and expensive. I mean like high PE ratio, low growth stocks. And that doesn't make any sense whatsoever. So there's a good reason potentially to hold in like an expensive high growth stock. It's expensive because growth is high. But to hold an expensive low growth stock, that's baffling. So our paper kind of sketches a new approach where expensive low growth is excluded from any portfolio.

[Tom Keene]

What's extraordinary, I'm one more question and this because Paul's looking at me going, we got to talk to Kim about Space X. But you know, I look, Professor Harvey, at this and it seems to be a complete shift towards the joke of Stephen Colbert. Growth. Is value dead?

[CBOE Announcer]

No, not at all. So what's dead is investing in expensive low growth stocks. In my opinion, those stocks are losers historically and they should not be in your portfolio. So growth should be measured by growth metrics. Sales growth, profitability growth, R and D growth, growth, not the stock is expensive. That's not good enough. We need to look at fundamentals and that's why our paper is called Fundamental Growth.

[Tom Keene]

This is great, Paul. Did he just describe SpaceX?

[Paul Sweeney]

Exactly. So Cam, we do have a pretty notable IPO that's going to begin trading today. SpaceX IPO valuation I think the analysts are telling me, is 95 times revenue. Talk to us about what this kind of deal means to you. And one of the key issues is where does it go to neat in the various stock indices out there.

[Tom Keene]

Yeah.

[CBOE Announcer]

So this is a stock that is high growth and it will be expensive. And you mentioned one metric, it's expensive. And that often means that the expected return going forward is going to be modest. And indeed, if you look historically at IPOs of large firms and you look at the performance over the next three years, it is essentially flat compared to the market. So the ipo, by the time it gets to ipo, these stocks are often fully priced and all of the action, the explosive growth happened before the IPO when those so called accredited investors and insiders were transacting in this stock. So what I'm saying is the big upside has already happened. So those that bought the stock for $10 or $100, they got the explosive growth and the retail or the average investor is left with the residual, the dregs. They could not buy the stock earlier on because they are not accredited or qualified. Yep.

[Paul Sweeney]

Bloomberg had some reporting yesterday Cam, that the demand from retail investors in the pre market trading exceeded $100 billion for $75 billion offering here. It sounds like retail nonetheless is going to participate in a big way.

[CBOE Announcer]

So again there's a good reason for that demand. This will be likely the number seven largest stock in the US by total market capitalization. It is reasonable for retail investors to diversify their portfolio. So they want some of this stock. I understand that. So the problem is that they're getting in at a very high price. So SpaceX looking at the derivatives market is at 177 already. So and, and you're not getting in necessarily at the allocation price of 135. You're getting in at the close.

[Tom Keene]

I just want to point this out. He has a derivative pricing at Duke. They don't have that in Chapel Hill. They don't have the pricing right now.

[Paul Sweeney]

Eventually.

[Tom Keene]

Chapel Hill.

[Paul Sweeney]

Hey, Cam, another part of this deal which is really interesting, I think, is just if you're buying stock today in this company, you've bought off on a vision of Elon Musk, of maybe even the cult of Elon Musk. How does that typically play out over time?

[CBOE Announcer]

So it's difficult to draw historical comparisons. Because this is such a big ipo. Many don't realize that this company is, is not a new company. It's been around for 24 years. So it's got a long track record. People know the company, it's in the news, and it is large. So this IPO is larger than the sum of all the IPOs in 2025. So it's really hard, given that it's so extraordinary in terms of the size, to draw historical comparisons. Many IPOs are small. This is giant. And also there is the possibility that SpaceX will be merged with Tesla to become like a colossal company. So, again, to draw historical comparisons is difficult. Vision is important. And you are correct that a lot of people are buying the vision. They're buying this vision of extreme growth potential. Yep.

[Paul Sweeney]

And that's 95 times revenue. Tom, I'm sure you're getting your allocation this morning.

[Tom Keene]

I'm looking for my allocation. It's just not there. Faro got his 8,000 shares. As always, Professor Harvey, just for all of us at the CFA Institute, congratulations to you and your team on this research report. Stay with us. More from Bloomberg Surveillance coming up after this.

[Paul Sweeney]

Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds, and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific, like biotech companies with high R and D spend, small cap stocks with improving operating margins, or the S&P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on public, you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks, go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market and paid for by Public Holdings Brokered services by Public Investing member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor crypto services by ZeroHash sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete [e-mail] disclosures Ryan Reynolds here

[IBM AI Representative]

from Mint Mobile I don't know if you knew this, but anyone can get the same Premium Wireless for $15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to [e-mail]

[Sarah Wolf]

Switch upfront payment of $45 for 3 month plan equivalent to $15 per month required intro rate first 3 months only then full price plan options available, taxes and fees extra fee full [e-mail] innovation

[Tom Keene]

is what gets your business to market and Wasabi is designed to give every business a shot at competition. How Break free from skyrocketing storage costs and unpredictable egress fees from old and top heavy legacy providers. You know the big guys. Wasabi is the world's hottest cloud storage company and the go to provider for professional and collegiate sports teams and leagues around the world. And here's why. Innovation from Wasabi's AI enabled intelligent media storage, Wasabi Air to the industry's only cloud storage service with triple protection against cybercriminals, data deletion and ransomware. The world's top companies trust Wasabi. Remember, Wasabi is up to 80% less than market competition and doesn't charge a cent for businesses to access their own data. Wasabi Another championship story. Check them out for [e-mail] Wasabi Hot Cloud Storage proud partner of iHeart Podcast Network.

[Bloomberg Surveillance Host]

You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10am Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.

[Tom Keene]

He had the privilege as a youth to work for Alan Greenspan and far more than that with wonderful academics. Jake Schneider with Atlas analytics carried on with Chairman Greenspan the Earth Resource Satellite, which was an act of God coming out of Apollo, mostly coming out of the Dakotas. It was a part of my family heritage and we're thrilled to have Jake in here today. We're still using satellites to look at stuff, right?

[Jake Schneider]

We absolutely are. Well, first let me say I'm delighted to Be here. Thank you for having me. My name is Jake Schneider. I am the founder of Atlas analytics where we use satellite imagery to predict GDP in real time. So as you know, and as probably our viewers know, satellite imagery can be the. I'm sorry, macroeconomic data comes out with a lag. It was medieval where it's Renaissance.

[Tom Keene]

What's it say about our farmers flat on their back this summer?

[Jake Schneider]

Well, let me look into that for you, Tom, when I come back next time. For now, what I'd like to say is that we are forecasting GDP for Q2. That number won't be out for first release until the end of July and final number until the end of September at about 2.5%. It's doing quite strong. We have our own taxonomy where we use the expenditure approach to GDP to break it into three components, private inventories, net exports and core gdp. Core GDP is looking strong.

[Paul Sweeney]

The Federal Reserve, a lot of folks are critical of the Fed, including Cam Harvey from Duke University, who we just spoke to this morning, that the Fed uses, I guess, rear backward looking data as opposed to real time data, which is something that you guys play in. Talk to us about how you think about that. Real time data versus some of the stuff the government relies upon.

[Jake Schneider]

Yeah. So this is the core crux of the issue with macroeconomic forecasting with macroeconomic data today. When Simon Kuznets created the GDP, National Income and Product Accounts in 1934 and presented to the Congress in 1937, it was a great leap forward. We like to believe that we have also created a leap forward by using real time imagery from satellites that orbit Earth every 90 minutes and have revisit on same location of five days, we're able to ingest these satellite images for the last 50 years, take that data and extract a signal that we use in combination with machine learning, computer vision and AI to make a forecast of gdp.

[Tom Keene]

It sounds really spacey. Give us one example of what you do with that. Like where I 80 crosses, whatever the I is out in western Nebraska.

[Paul Sweeney]

Sure.

[Tom Keene]

Give us one concrete example of how you do that.

[Jake Schneider]

Well, I loved the idea that you're using concrete and you said concrete as an example. That is what we're looking at. We are looking at four things. The expansion of a built environment, land use, vegetation and port activity. And it turns out that you can use these real time signals and extract data from it using AI and machine learning to make inferences about what's happening in real time.

[Paul Sweeney]

How is your data different from kind of what we do see out of the government. Are your GDP numbers in line with what the government ultimately reports? Are they different? How does that.

[Jake Schneider]

You're asking about accuracy. So we benchmark against the actual data that comes out. GDP as we know is a quarterly statistic, comes out four times a year. I'm going to see your question and raise you a question which is do you remember what GDP was for Q1 first release?

[Paul Sweeney]

No.

[Jake Schneider]

It was 2.0%.

[Paul Sweeney]

Okay.

[Jake Schneider]

We predicted on our YouTube atlasanalytics.info, our YouTube, our substack and our website, 2% two weeks before. And it's live timestamped on our YouTube so you can see that it was obviously Revised down to 1.6, but I think the story still stands. We are accurate and we are timely and we can give you a real time forecast of what's happening in economic activity so that traders and policymakers can have actual insights ahead of the competition.

[Paul Sweeney]

What's the most predictive? I guess flows or information that you guys track. What's more what's best for you guys. What works best is it just ships and ports and doing that kind of thing.

[Jake Schneider]

So that actually is a great one. We do use our second algorithm, Jack, joint algorithm for containerized knowledge. You don't know. Jack actually uses satellite imagery, is trained with satellites over the ports and we're looking at TEUs 20 foot equivalent units coming in and off of the tankers to measure and map onto what is happening with real time trade flows.

[Paul Sweeney]

So what's your data telling you today? Because it feels like the economy's doing pretty darn well. What's your data telling you?

[Jake Schneider]

That's exactly what we're seeing. So we see core GDP, which in the expenditure approach of GDP is consumption, government expenditure and fixed investment. Core GDP, the core of the economy is at about 3%. We're subtracting off about 0.6 percentage points for net exports and adding another 0.3. So between 2.5 and 2.7 headline is what we're seeing. You might say to me, Tom, go ahead.

[Tom Keene]

Well, I'm going to have to leave it there. We got breaking news happening right now. Jake, thank you so much. Atlas analytics today on satellite technology.

[Bloomberg Surveillance Host]

This is the Bloomberg Surveillance podcast available on Apple, Spotify and and anywhere else you get. Your podcasts listen live each weekday 7 to 10am Eastern on Bloomberg.com, the iHeartRadio app, TuneIn and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg terminal.

[IBM AI Representative]

Ryan Reynolds here from Mint Mobile with a message for everyone paying big Wireless way too much. Please, for the love of everything good in this world, stop with Mint. You can get premium wireless for just 15amonth, of course, if you enjoy overpaying. No judgments. But that's weird. Okay, one judgment anyway. Give it a [e-mail] Switch upfront payment

[Sarah Wolf]

of 45 for 3 month plan equivalent to 15 per month required intro rate first 3 months only, then full price plan options available, taxes and fees extra. See full [e-mail] Paramount plus is now

[Tom Keene]

the home of all your BET favorites.

[Sarah Wolf]

What?

[IBM AI Representative]

Yes, with all new episodes of Tyler Perry's Divorce.

[Tom Keene]

Sisters you've always liked, a little drama. Plus a whole new world of movies

[Jake Schneider]

like Gladiator 2 now World Control and Empire.

[IBM AI Representative]

Original series like the Shy. Just make sure we protect each other. And live sports like ufc.

[Tom Keene]

Welcome to the history books.

[IBM AI Representative]

New home, same family. Your BET favorites are now on Paramount.

[Jake Schneider]

Subscribe now

[Sarah Wolf]

okay. Laundry stinks. Literally. I mean, you could just keep buying new underwear. Not that I've ever done that. Or maybe sort your clothes into piles based on how re wearable or filthy they are. Or just use arm and Hammer Deep Clean. It's made for real life stinks and stains. So even if you don't do laundry, the quote right way Deep Clean will knock it out. I mean it is from the number one liquid detergent brand that tackles more loads than any other. Come clean with Arm and Hammer Deep Clean number one claim based on total wash loads sold.