SpaceX Reports Tomorrow | Manufacturing at 4-Year High | Williams Holds the Line

Markets rallied today.

Oil pulled back on Hormuz diplomacy hopes after Trump said the US would engage in talks. The Situational Awareness forced sale cleared and stocks breathed.

Chip stocks didn't get the memo. Micron, Sandisk (SNDK), Intel (INTC), and Western Digital (WDC) all fell anyway. Amazon (AMZN) crossed $3 trillion. The market is running in different lanes simultaneously.

SpaceX (SPCX) reports tomorrow. The stock is down 50% from its post-IPO high. What the earnings say matters far beyond one company's quarterly results.

• Amazon crossed $3 trillion in market cap this morning.
• AstraZeneca and Bristol Myers Squibb (BMY) are in merger talks at roughly $400 billion.
• Short sellers are up $8.3 billion in paper profits on SpaceX since IPO.
• SpaceX's connectivity business is its only profitable segment.

SpaceX Reports Tomorrow. The Stock Is Down 50%. Alphabet's Mark Hasn't Moved.

SpaceX has lost over $500 billion in market cap since its June 12 IPO. The stock is down more than 50% from its intraday high. Not since Facebook's IPO in 2012 has a high-profile offering fallen this far this fast. Facebook's total market cap on day one was roughly one-fifth what SpaceX has shed.

The rolling lockup expires in the coming days. Early investors can start selling. Short sellers are already up $8.3 billion in paper profits since the IPO. One analyst called it among the most aggressive bearish builds ever seen in a megacap heading into its first earnings report.

The Starship question sits at the center of the valuation case. The rocket's 13th test flight on July 24 had a "hard splashdown." Its booster attempted to relight engines for the landing burn. Only some of them fired. SpaceX's own prospectus said failure to achieve full reusability would mean higher costs, slower deployment, and increased capital requirements. Analysts say Starship is the most important issue for SpaceX in justifying its current price tag.

The cloud revenue is the counter-argument. Google agreed to pay $920 million a month for AI compute capacity. Anthropic signed a deal to use SpaceX's entire Memphis data center. Reflection AI is a third named customer. Those contracts are real. The question is whether they clear the valuation at 70-plus times trailing revenue while the business burns cash and carries twice as much debt as cash.

Here is the part that matters beyond SpaceX itself. Alphabet used SpaceX's June 30 closing price of $170.86 to mark its stake. Friday's close was $108.37. The stock has fallen further since. That mark is sitting on Alphabet's books unchanged. Tomorrow's earnings print is the first moment the market can price both the news and the mark simultaneously.

The Signal to Watch

Whether the print addresses Starship's July test and the compute capacity questions determines whether the mark holds or forces a restatement. Thursday's lockup expiration and any named insider Form 4 filings are the first documented sale signal from early holders.

SIGNAL 1: Manufacturing Hit a Four-Year High. Prices Paid Stayed Hot.

The ISM manufacturing PMI jumped to 55.6 in July, the highest since May 2022. New orders climbed. Factory employment rebounded to its best level since August 2022. The prices-paid gauge stayed elevated at 71.1.

The demand side and the price side both point the same direction. Businesses are front-loading orders ahead of higher costs tied to Iran. The AI buildout is pulling through technology sector activity. Factory inventories have fallen five quarters in a row.

Both sides of this print, demand and price, directly support what the three Fed dissenters said last Friday. Real-economy data is moving in the direction of the Kashkari "series" framing, not away from it.

The Signal to Watch

Friday's July payrolls print is the next data test. A strong number with wage growth above 4% converts the manufacturing signal from one strong month into a documented case for September.

SIGNAL 2: John Williams Expects Inflation to Ease. He Said the Fed Will Hike If It Doesn't.

New York Fed President Williams told reporters Friday he remains optimistic inflation is heading lower. He strongly supported the Wednesday hold. He said current policy is "well positioned."

He also left the door open. If the economy is not on a trajectory back to 2%, he said it would "absolutely be appropriate to act." He does not see financial stability risks from AI investment, noting that most of the companies involved have high earnings.

Williams is the vice chair of the FOMC. He is the closest thing to a swing vote between the three dissenters and the Washington-based governors. He did not join the dissenting case on Friday. That gap, three regional presidents for hiking, the vice chair saying well positioned, is what July payrolls will narrow or widen.

The Signal to Watch

Any Washington-based governor echoing Williams's "well positioned" framing before August 15 widens the gap. Any governor moving toward the dissenting case narrows it. Jackson Hole is August 27.

SIGNAL 3: Marriott's Middle East Revenue Fell 43%. The Travel Bifurcation Has a Number.

Marriott (MAR) forecast Q3 profit below expectations today. Shares fell in premarket. Middle East RevPAR dropped 43% in Q2 as airlines scaled back regional operations. The CEO named the Iran war directly as the cause.

US room revenue grew 5% in the same quarter, lifted by the World Cup and summer travel. Luxury segments including Ritz-Carlton and Sheraton were up more than 9%. The hotel industry is running in two directions at once. The same split the AmEx-vs-Albertsons framework named on the consumer side.

Hilton and Hyatt raised their full-year forecasts last week while flagging the same Middle East headwind. Premium travel at home is strong. Regional travel near the conflict is effectively stopped.

The Signal to Watch

Any Hormuz reopening announcement in the next 72 hours would reverse the Middle East decline directly. No deal means the 43% figure is the Q3 operational anchor for every US-listed hospitality name with Middle East exposure.

SpaceX reports tomorrow with the stock down 50% since IPO. Alphabet's paper mark on the same ticker is still on its books at the June 30 close. Manufacturing hit a four-year high with prices still running hot. Williams held the swing-vote position at 'well positioned.' The three dissenters wrote the case for a series of hikes. Every one of those anchors sits between now and Jackson Hole. Tomorrow's earnings print is the first specific test on whether the largest single paper mark in this month's earnings season holds when the ticker trades below the mark.

SpaceX reports tomorrow. Manufacturing and prices both point toward September. Williams held the line. Marriott named the number.

Tomorrow's SpaceX print, Friday's payrolls, and any Washington governor moving before August 15 are the three signals that define whether the paper mark holds, whether the Kashkari case gets real-economy backing, and whether the credibility gap closes or widens before Jackson Hole.