Will SpaceX Skyrocket on Trading Debut?

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0:32We're counting down to the biggest IPO of the year, with SpaceX due to begin trading later today. Plus, the UK's defence secretary quits. We'll look at what it says about Europe's military readiness. For Europe to get defence sovereignty, it really needs its traditional military powers, which is really Britain and France, to step up the plate. At the moment, it's only really Germany. And Barclays forecasts that Harry's will outspend Swifties. Confused? I promise you won't be in just a few minutes. It's Friday, June 12th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today.

1:16We are just hours away from SpaceX's trading debut, the largest IPO ever. Its size and value is set just shy of$1.8 trillion, and big firms and retail investors alike have their orders all lined up. But what'll happen when shares finally hit the market later today? After all, Tesla saw its stock jump 40 % in its debut, and even much smaller moves from SpaceX could trigger a pause in trading, as our Caitlin McCabe explains. I think everyone right now is really interested, obviously, in how the stock will perform today, but also just the mechanics and the plumbing around it. For most newly listed companies, a 10 % swing in either direction prompts a five-minute pause in the stock.

2:01This has been used recently. Companies including the software company Figma, which debuted last year, and Cerebra Systems, which went public earlier this year, they both had their shares halted. So a very volatile launch could definitely see a repeat of that. But there are some options to help stabilize the stock if things start trading really erratically. There is this thing that's known as the green shoe option. It essentially gives the so-called stabilization agent, which in this case is Morgan Stanley, a secret weapon to calm things down. So if the stock starts to fall severely, the bank will buy the shares in the open market, which will help buoy the stock price.

2:43And finally, we'll be watching to see how this listing affects the broader market. SpaceX won't be included in any major index funds for several days, but there was some interesting data out from Vander Research the other day. It showed that retail investors have been selling shares of some of the really buzziest, most popular stocks in the market in the last few days, you know, companies like Marvel Technology, Micron Technology, even Apple. And the thinking is that they're trying to amass dry powder in order to buy shares of SpaceX. So if the IPO is going really well, it's possible that retail investors and, frankly, other types of investors in the market will want to sell those shares.

3:24And that could stoke more volatility throughout the market. And for much more on what to expect on SpaceX's first trading day, from whether the stock is worth the hype or just how quickly today's IPO will make Elon Musk a trillionaire, check out the links we've left in our show notes. Oil prices have fallen below$90 a barrel today after President Trump called off planned strikes on Iran and said that a peace deal could be reached within days. Crude is on track to end the week 8 % lower. But as Dow Jones energy reporter Julia Petroni explains, any significant drop in oil prices could still be a long way off.

3:59Oil prices have been on a bit of a wild ride in recent months. Brent crude was trading in the low 70s before this war started. and we've seen it reach to nearly 120 at some point during the conflict. The ultimate impact on oil prices depend on how quickly flows can be restored through the Strait of Wormuz, which could take months. We're facing a number of challenges from the clearing of sea mines to the repositioning of the global tanker fleet, damage to infrastructure and production facilities in the Gulf, and also shut-in oil wells, which do not simply resume production at the turn of evolve.

4:33So forecasts are highly uncertain and volatile. Most analysts have spoken to say Brent is unlikely to drop below 80 a barrel until round trips through Ormuz can resume. But markets will likely to continue to price in some geopolitical risk premium, at least until a final deal is reached between the U.S. and Iran. And especially because Iran has shown it has substantial leverage over the Strait of Ormuz. We turn out to Peru, where Kiko Fujimori, the daughter of a former dictator in the country, has narrowly won the presidency, marking the latest shift toward right-wing leadership in Latin America.

5:13Aligned with the Trump administration's regional approach, Fujimori has pledged a severe crackdown on the country's rising violent crime. Her promises include building maximum security prisons, expelling illegal migrants, and allowing judges to wear hoods to conceal their identities. Canada has delayed the opening of a new bridge which would connect Detroit with Windsor, Ontario and translate into billions of dollars in economic savings for truckers. The move was downplayed by Prime Minister Mark Carney, who said it was unrelated to ongoing trade tensions between the two countries. Well, at the request of the United States, we agreed to delay the opening and take the necessary time to resolve outstanding issues.

5:59There's a few issues that have been raised, and this is a collaborative approach. As I said yesterday, there's not great drama here. We're going to work through some issues that have come up. The bridge opening was put in doubt after Trump in February said he would hold up its launch, demanding an ownership stake in the project. Earlier this week, a White House official said the president's position hadn't changed, that he was seeking the best possible deal for Americans. And we're exclusively reporting that President Trump and his allies are discussing a push for lawmakers to pass a resolution voiding his first-term impeachments.

6:35Trump told the Journal that the move is justified because he, quote, did nothing wrong. The resolution would allow Trump to claim a symbolic victory on a matter that's followed him since his first term and is part of an effort to burnish his presidential legacy. Coming up, the U.K.'s Keir Starmer grapples with the surprise resignation of his defense secretary. The latest headache for European leaders balancing tough trade-offs as they try to ramp up defense spending. We've got that story and more after the break.

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7:38The UK Defense Secretary quit his job yesterday. We don't normally cover personnel shakeups in Whitehall here, but read John Healy's resignation letter, and it's clear that it speaks to a larger trend that's playing out across Europe. In it, addressing Prime Minister Keir Starmer, he wrote that, quote, You have been unable, and the Treasury has been unwilling, to commit the resources that the nation needs to defend the country at this time of rising threats. The journal's Alistair MacDonald covers the defense industry for us. Alistair, this surprise resignation came on the same day that some officials have been expecting the UK to unveil its so-called defense investment plan.

8:17This is a sort of decade-long blueprint for making the UK armed forces battle-ready. Evidently, Healy didn't think it went far enough or actually accomplished that. That's right, Luke. It was presented to him earlier this week, and in it, it promised only to increase military spending to 2.68 % GDP by 2030. Of course, the UK has agreed with NATO that it will increase its dispense spending to 3.5%. Healy's argument is very much that these are very uncertain times. And he would point to what's been happening in Ukraine and broader security threats, as you've seen in the Middle East, where Europe's been a complete bystander.

8:56And so Europe's looking for this defense sovereignty. The idea is that for Europe to get defense sovereignty, it really needs its traditional military powers, which is really Britain and France, to step up to the plate. At the moment, it's only really Germany, which is obviously a very large economy, the Nordics and Scandinavians and Poland. But the Nordics and the Baltics are really increasing by a lot, but they're obviously much smaller economies. Well, how much does this conundrum being faced in Britain mirror the situation across Europe? I mean, I note in your reporting, the UK military is facing this 28 billion pound hole in its military equipment budget.

9:32I'm curious if that is kind of the same. Yeah, well, Europe is raising its defense spending quite considerably. Last year alone, Europe's defense spending increased by 16%. These come from figures from CIPRI, which is a thick tank that outpaced the 3 % increase in spending globally and an 8 % real term decline in the US. The problem for Europe, of course, is that it's not really the sum of its parts. It's not one whole wallet as the US's is. It's fragmented. So that's sort of why you do need the traditional European big military spenders, which is, as I say, mainly France and the United Kingdom.

10:07Got it. And that fragmentation you're talking about there leads to all sorts of interoperability issues, does it not? It does. And that's something Europe's trying to address by buying the same equipment. So to some degree, it succeeded. I mean, most European nations, really with the exception of the UK and France, use, for instance, Germany's leopard tank. A lot of European nations are coalescing around Rhein-Mittal propelled howitzers, for instance. So there is some coming together. And there's some notable kind of instances, though, where these attempts to cooperate kind of fall flat on their face.

10:40As we saw this week, Germany pulling out of a stealth fighter project that had been in the works for years and sort of had been meant to symbolize how European countries could work together to rebuild their militaries. That's right, the FCAS. So that was Germany, France, and Spain, and that collapsed in Ackermann this week, as you've said, although it came as no surprise to absolutely anyone. You've had drone projects that have fallen apart. There was a sort of a European grand tank plan that's taken a long, long time, might happen eventually. And then you have a situation where most large European nations build their own naval gear in terms of ships, and for those that have submarines, submarines.

11:16So you have huge fragmentation. Of course, the British, the Italians, and the Japanese have their own stealth fighter, which is supposed to come online in 2035. That's called the GCAP. But then if you have the French one, the F-CAS, nobody knows where Spain's going to go. And then the Germans are talking about doing their own one. And then you still have Sweden with its gripping. Then you've got a lot of different planes, basically, and that's sort of sucking up spending. Just going back to the UK very briefly, You seem to be painting a bit more of an optimistic note about kind of how the continent is rising to the moment.

11:51What's the deal with the UK? In fairness, the UK has been above the required NATO spending of 2 % of GDP. It's kept above that. I mean, your listeners will know the UK was once, you know, a global military superpower. That's no longer so, of course, but it's still considered a very, very valuable ally for somebody like the US. It has excellent special forces. Its troops are considered very well-trained. It still has some very gear. It's, of course, a nuclear power. It can project force because it has aircraft carriers and it has nuclear submarines. But the trouble is, is that that's not really enough.

12:24Especially, Alistair, if some of that really expensive kit doesn't operate or can't be out in the field, I mean, which we saw at the beginning of the Iran war. Yeah, that was right. It only really had one frigate it could send out there. And this is a country that wants boasters of ruling the waves. So it's sort of come a long way since then. The Journal's Alistair MacDonald covers the defense industry for us. Alistair, thank you so much for stopping by. Thank you, Luke.

12:49And finally, as soccer stadiums across North America welcome millions of fans from around the world for the World Cup, across the pond, the UK's largest venue is readying itself for Harry Styles, who's kicking off a 12-show residency at Wembley Stadium tonight before heading to New York's Madison Square Garden for a whopping 30 gigs.

13:11I decided to try and get tickets to his London show when I saw that he wasn't coming to California. I knew London would be such a cool experience. And if I'm going to be making an expense that big, might as well just go big or go home. That's Brisa, a 25-year-old public relations graduate student from the University of California, one of around a million fans flocking to the UK capital. For my tickets, I spent£725. £25. I wanted to have the best tickets that's possible, so I've just been saving up for that. Fan spending for the former One Direction stars, concerts in London is set to amount to more than a billion pounds.

13:45And for fans like Brisa coming from overseas, spending on the shows will run much higher than the average£981 spent by the average attendee. Beyond just the ticket itself, all my flights, hotels, other accommodations and experiences, is I've spent over$3 ,900, and I'm anticipating spending over$4 ,000 out there. So kind of almost towards the$8 ,000 that I've been saving up for for quite a minute. And yeah, I'm just super excited. According to Barclays Consumer Spend Data, self-titled Styles fans known as Harry's are expected to spend more than fans who attended recent Taylor Swift and Oasis tours, which is honestly the first time that being a Swifty has ever felt cheap.

14:28And that's it for What's News for this Friday morning. Today's show was produced by Hattie Moyer. Our supervising producer is Sandra Killhoff. And I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. Otherwise, have a great weekend. And thanks for listening.

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