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☕️ GM Munchers! Messi scored twice yesterday and now holds the all-time World Cup scoring record. I told my wife the greatest of all time just made history. She asked if he could also fix the leaking faucet she has been asking me about since March. Different kind of goat, honey.

On today’s menu:

• 🚀 SpaceX Just Had Its Worst Day Ever

• 🏦 What The Fed Might Do Changes Everything

• 🚜 This Stock Just Hit $1,000/Share

• 🧘 Michael Burry Keeps Losing Money With This Stock

• 😬 Is This Stock Going To Drop 99%?

Yesterday’s numbers:

BREAKING NEWS

🚀 SpaceX Just Had Its Worst Day Ever As A Public Company

Turns out gravity does still exist. $SPCX dropped 16.4% Monday, erasing $400 billion in market value in one session. The stock is now barely 14% above its IPO price after touching gains of 67% just six days ago.

What Triggered The Crash

SpaceX confirmed its first ever bond sale Monday, announcing plans to raise $20 billion in debt just ten days after raising $75 billion in the biggest IPO in history. A company that just raised $75 billion, announced a $60 billion acquisition, then said it needs to borrow another $20 billion raises one very obvious question. How much money does this business actually need?

The answer is a lot. SpaceX lost $4.9 billion in 2025 and another $4.28 billion in Q1 2026 alone, driven almost entirely by the xAI division burning through cash.

The Valuation Was Always The Problem

At its peak SPCX traded at over 90 times trailing sales. That means paying $90 for every $1 the business makes in revenue before it turns a profit. Morningstar's fair value estimate is $62 per share. The stock peaked at $225. That gap was never sustainable.

What Comes Next: Insiders could sell 44% of SpaceX shares by early September, increasing the current float by roughly 900%. When that supply hits the market, the same thin float dynamic that sent this stock vertical will work in reverse.

The Munch Take: At over 90 times revenue for a company losing billions every quarter, the only thing holding the price up was a tiny float and enormous enthusiasm. Both are now working against it. This stock will be volatile for a long time. That volatility is not a problem. It’s eventually going to be the opportunity, but not right now.

🏦 The Fed May Hike Rates Three Times This Year. This Changes Everything.

At the start of 2026, Wall Street was almost certain the Fed would cut rates this year. That story is now completely dead. Bank of America now expects the Fed to raise rates three times before December, lifting the benchmark rate from 3.5% to 4.25% to 4.5%. That is not a small move. That is a full reversal of everything markets had been betting on.

How We Got Here

New Fed Chair Kevin Warsh came out of his first press conference sounding far more hawkish than anyone expected. He repeated the phrase "price stability" about a dozen times. He made no mention of rate cuts. The Fed's own projections now show half of policymakers leaning toward hikes before the year ends.

Inflation is currently running at 4.2% annually. The Fed's target is 2%. They have now missed that target for five straight years. Warsh inherited a problem nobody fully solved, and he is signaling he plans to take it seriously.

Why This Hurts More Than People Realize

Yes, hiher rates are bad for stocks. But the damage goes well beyond your brokerage account:

• 💸 The US government will spend $1 trillion on interest payments this year alone. That is already more than the entire defense budget of $947 billion, and more than Medicaid, veterans benefits, education, and transportation combined.

• 📈 Interest is now the second largest expense the government has, behind only Social Security. Every rate hike makes that bill bigger.

• 🔺 Interest payments are projected to grow 106% over the next decade, faster than any other category in the entire federal budget.

In plain English: the government is already paying $88 billion a month just in interest on its debt. Three rate hikes would make that number climb even faster.

The Munch Take: If rate hikes become reality, yes, stocks are going to feel it. They are already at record all-time highs. The Buffett indicator, which measures total stock market value against the size of the entire US economy, is at an all-time high. That is not the setup where you want to be chasing stocks aggressively. Right now the smartest thing most people can do is build their cash position and be patient. That does not mean hiding forever. Software stocks have been decimated. There will be pockets of opportunity. But for most of the market sitting at all-time highs, cash is not a bad place to be. Rate hikes will not last forever. There will eventually be a catalyst that brings rates back down. Could it be two or three years from now? Absolutely. But when it comes, those who built their cash position while everyone else was chasing highs will be the ones with the ammunition to buy.

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MARKET OVERVIEW

🍿 Tasty Movers & Shakers

🚜 $CAT Caterpillar quietly crossed $1,000 a share while everyone was busy arguing about AI stocks. The stock is up 70% this year and Wall Street is just now catching on that Caterpillar's power generation business is basically an AI infrastructure play in disguise. Their last stock split was a 2-for-1 back in 2005. Since then they’ve done preferred buybacks, deploying $5.7 billion on repurchases and dividends in the first quarter of 2026 alone. Truly impressive stuff.

🔍 $GOOGL Alphabet shed 6% after losing two top AI researchers to OpenAI and Anthropic. In the AI talent war, every defection sends a message. That message hit the stock price immediately.

🔋 $LCID EV maker Lucid announced it’s cutting 18% of its US workforce. The stock dropped 3.73% on the news, which is almost polite considering it’s already down more than 50% this year and 76% over the past twelve months. It’s ugly stuff.

💊 $DFTX Definium Therapeutics surged 49.8% after reporting positive Phase 3 trial results for its depression treatment. A successful Phase 3 in biotech is the equivalent of a starting gun. Watch for what comes next.

☁️ $CRM Salesforce fell another 1.09%, extending its losing streak to 14 straight sessions. The stock is down 40% this year as investors keep asking whether AI kills the kind of software Salesforce sells. At 14 sessions of consecutive losses, it’s starting to look like either a value trap or a genuine buying opportunity. We’ll do a deep dive soon.

STOCK OF THE DAY

🧘 Lululemon Just Hit Its Lowest Price In 8 Years. Michael Burry Is Still Holding.

We’ve written about Lululemon before but story keeps developing. By developing we mean getting uglier and uglier.

Michael Burry (famous investor from The Big Short) first bought Lululemon in Q2 2025 at an average price of roughly $238 per share. The stock is now trading around $185. That puts him down an estimated 51% on the position, a loss of about $12 million. Yes, the man who called the 2008 housing crash is currently getting humbled by yoga pants.

Burry has called it a "patience trade" and says he may add more. That is either the most disciplined contrarian investing you have ever seen or a very expensive way to spend a year being patient. Only time tells which one.

Here’s the part that goes beyond the stock chart. Lululemon built its entire identity around health, wellness, and premium living. But nearly all of its clothing is made from polyester, which is essentially fabric made from oil. Consumers are waking up to that. The same customer who pays $150 for leggings because they care about their body is now reading about microplastics shedding into their skin from synthetic fabric. That is a brand contradiction that is very hard to quietly fix without drawing attention to it.

Only 2 of 32 Wall Street analysts covering Lululemon currently have buy ratings. That is the most bearish analyst consensus Burry himself said he has ever seen for a company without major legal or regulatory problems. The brand is not broken in a legal sense. It is broken in a cultural one. The allure that made Lululemon feel special a decade ago has quietly faded, and $185 a share is the market's verdict on how hard that is to get back.

The Munch Take: Burry is betting this is a valuation story. The market is betting this is a brand story. Those are very different trades with very different timelines. A new CEO from Nike arrives in September. That is the next real catalyst to watch. Until then this stock keeps doing what it has done all year, which is make Michael Burry practice patience in the most expensive way possible.

TRADING SUCCESS

🤑 Monday Motivation

🚀 Pre-Market Fuel

1. 🤑 10 Stocks for Income and Triple-Digit Potential (Ad)

2. 😬 Is this stock going to drop 99%?

3. 🥈 Silver is down almost 50%.

4. ❗️ The Japanese Yen is almost at a 40-year low.

5. 🇨🇦 Canada’s inflation just hit a 3 year high.

🍪 Munchy Memes

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