Analysis: SpaceX is still entering the bond market at a favorable time

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Deep Tide TechFlow news: On June 23, although the stock market started this week slowly, SpaceX (SPCX.O) is still entering the bond market at a favorable time for corporate borrowers. Measured against recent historical standards, the benchmark 10-year U.S. Treasury yield remains high: it closed at 4.507% on Monday, up from 4.450% last Thursday. However, the extra yield investors demand for holding high-grade corporate bonds relative to U.S. Treasuries (i.e., the yield spread) is hovering near multi-decade lows, suggesting strong investor demand. “SpaceX is not trading based on fundamentals,” said Gill Luria, head of technical research at D.A. Davidson. “What people are willing to pay is more determined by their optimism, hopes, and dreams. So we’re likely to see a lot of volatility. The past few trading days have simply been a first taste of that volatility.” (Jin10)
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