Free Weekly Email 9.30.24
URANIUM: $200 Incentive, Bearish Takes, Big News, SMRs, and Major Setbacks
The uranium market is buzzing with long-term bullish developments, yet uranium stocks have been underperforming. So, what’s really going on? In this video (almost) nuclear engineer Malcolm Rawlingson breaks down the latest news and its impact on the sector:
Microsoft and Amazon's Nuclear Energy Moves: How these tech giants are signing massive nuclear energy contracts, yet the spot uranium market remains quiet. Microsoft just signed a historic 20-year nuclear energy deal to power its growing data centers, marking a major shift in how tech giants view their energy needs.
This deal involves the restart of Three Mile Island’s Unit 1, a nuclear plant that was decommissioned in 2019. But with the plant set to power up again by 2028 under the new name "Crane Clean Energy Center," what does this mean for the nuclear industry, energy markets, and Microsoft’s massive AI operations?
Palm Valley Capital: The Great Pumpkin
Our belief in full market cycles, including a bull and bear market, is beginning to feel more and more like Linus’s belief in the Great Pumpkin. However, instead of pumpkins, we sit in a patch of T-bills waiting for the return of sensible equity valuations. And rather than bringing a bag of toys, we expect this cycle’s Great Pumpkin (bear market) will bring patient investors the gift of lower prices and opportunity.
From the outside looking in, believing in full market cycles, bear markets, and even recessions, probably looks foolish. To some, we might even look like blockheads! Nevertheless, we continue to believe equity valuations are very expensive, exposing investors to considerable risk. In fact, we consider this stage of the market cycle to be an asset bubble—the third stock market bubble of our careers. The first two bubbles were verified by significant losses, with the S&P 500 losing half of its value during both bear markets (2000-2002 -49% and 2007-2009 -56%).
While valuations support our view that stocks are in another bubble, rarely is today's market labeled as one. This is the case even as equity valuations are near or above past bubble peaks.
I like and respect the guys at Palm Valley Capital. I agree that valuations are at bubble levels. However, the flow of liquidity is now expanding worldwide. Is it possible that we have an expansion of this bubble as liquidity moves higher? Do we get a super bubble and then a supernova bear market? With so much government and central bank interference in the economy, applying previous historical norms to current market conditions is difficult.
Emerging markets poised to outperform?
Since 1988, EM equities have delivered positive performance 24 months after the last Fed rate hike in four of the past five Fed rate cycles. As I have stated, I am very bullish on various emerging markets, particularly Latin America, the Republic of Georgia, and certain Central Asian countries. There are ways to invest in these countries. Subscribe to the Actionable Intelligence Alert to learn how I access these opportunities.
Global rate cuts are happening
I have discussed this for a year. Rate cuts are not the only thing driving equities higher, but they certainly are a tailwind instead of a headwind to higher stock prices.
Gold’s cup and handle breakout?
I am not a big user of technical analysis, although I like to use it to confirm breakouts from an asset’s bottoming process. The cup and handle are a classic technical setup, and when they occur, they are usually quite accurate and indicate a continuation of the uptrend. There are always interpretation issues in technical analysis, so keep that in mind, but this looks like a multi-year breakout.
Man Identifying As 6-Year-Old Breaks All Records In T-Ball League
Meet Paul Cornell, Jr. - this grown man identifies as a 6-year-old, and he's broken literally every record in the Cedar Valley Little League 6U T-ball division. His story is one of bravery, courage, and 450-foot moonshots over the left field wall.
I like baseball, so I found this amusing.
Interesting new channel
I found this new channel on Substack and have been watching many of its videos. The name of the channel is “Notes From the Past.” It is a history-themed channel with very high production values, on par with television—think History Channel. What I like about the channel is that it looks at history from a non-mainstream perspective. I have always assumed the narrative we are being fed is mostly skewed, if not outright lies. Prepare to have your assumptions challenged.
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John Polomny
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Did you not say in an earlier video that equities fall when rate cutting begins?