Analysis: SpaceX Enters Bond Market at a Favorable Time

On June 23, despite a slow start to the stock market this week, SpaceX (SPCX.O) is still entering the bond market at a favorable time for corporate borrowers. By recent historical standards, the benchmark 10-year U.S. Treasury yield remains high, closing at 4.507% on Monday, up from 4.450% last Thursday. However, the extra yield demanded by investors for holding high-rated corporate bonds over U.S. Treasuries (the yield spread) is hovering near decades-low levels, indicating strong investor demand. "SpaceX is not trading based on fundamentals," said Gil Luria, Director of Technical Research at D.A. Davidson. "The price people are willing to pay is more dependent on their optimism, hopes, and dreams. Therefore, we will face significant volatility. The past few trading days are just a preliminary experience of this volatility."