The Nuclear Era
US President Donald Trump has signed a series of executive orders titled Reinvigorating the Nuclear Industrial Base, Reforming Nuclear Reactor Testing at the Department of Energy and Ordering the Reform of the Nuclear Regulatory Commission with the goal of “re-establishing the United States as the global leader in nuclear energy”.
Nuclear energy is clean, safe, and not so expensive if done right. These executive orders have some questionable provisions, but overall, they are a huge positive for the uranium companies.
A White House statement summarizing the impact of the orders said: “Today’s executive orders allow for reactor design testing at DOE labs, clear the way for construction on federal lands to protect national and economic security, and remove regulatory barriers by requiring the Nuclear Regulatory Commission to issue timely licensing decisions.”
“We’ve got enough electricity to win the AI arms race with China,” Interior Secretary Doug Burgum said. “What we do in the next five years related to electricity will determine the next 50”.
We are long URA (Global Uranium ETF). It is up 50% over the last 7 weeks, culminating with a 12% gain on Friday following the news. This ETF is going to 40. We are not selling it. Here is the chart:
So, what are the side effects? Safety. Reducing the role of the oversight government agency may cause safety concerns. Deregulations in any industry always involve a compromise between profits and the environment…. In this particular case, we believe the positives by far outweigh the potential negatives.
Considering that AI companies like Google, Microsoft, Apple, and Amazon (not to mention thousands of smaller ones) … are starving for energy, which is required for their AI research and development, this is an enormous step forward towards electricity generation efficiency, cleaner energy, and opportunities for further innovation.
Meanwhile, after a decade of ultra-low interest rates, the 30-year U.S. Treasury yield has surged above 5%—a level not seen since the 2008 financial crisis. This is already affecting the real estate market as well as several other sectors. The stock market is always the last one to notice. Algorithms are set to take it to the all-time highs first. Think second. In our case, think first and sell it short second (right after the new all-time highs).
S&P is close to all-time highs, but look at the VIX—22+. Why? The market is nervous. The unpredictability of our government policies creates a sense of nervousness and uncertainty. Volatility is here to stay.
