May 28, 2025

(THE BIG PUSH INTO NUCLEAR)

May 28, 2025

Hello everyone

WEEK AHEAD CALENDAR

MONDAY MAY 26

9:20 a.m. Euro Area ECB Lagarde Speech

NYSE closed for Memorial Day holiday

TUESDAY MAY 27

8:30 a.m. Durable Orders preliminary (April)

9:00 a.m. FHFA Home Price Index (March)

9:00 a.m. S&P/Case Shiller comp. 20 HPI (March)

10:00 a.m. Consumer Confidence (May)

10:30 a.m. Dallas Fed Index (May)

Earnings: Auto-Zone

WEDNESDAY MAY 28

10:00 a.m. Richmond Fed Index (May)

2:00 p.m. FOMC Minutes

Earnings: Nvidia, HP, Snopsys, Agilent Technologies, Salesforce

THURSDAY MAY 29

8:30 a.m. GDP second preliminary (Q1)

8:30 a.m. Initial Claims (05/24)

10:00 a.m. Pending Home Sales Index (April)

Earnings: Costco Wholesale, Ulta Beauty, Dell Technologies, NetApp, Hormel Foods

FRIDAY MAY 30

8:30 a.m. Core PCE Deflator (April)

8:30 a.m. PCE Deflator (April)

8:30 a.m. Personal Consumption Expenditure (April)

8:30 a.m. Personal Income (April)

8:30 a.m. Wholesale Inventories preliminary (April)

9:45 a.m. Chicago PMI (April)

10:00 a.m. Michigan Sentiment final (May)

THE NUCLEAR INVESTMENT THEME IS GAINING MOMENTUM

Nuclear power is set to play a key role in the transition to energy that emits less carbon, according to Goldman Sachs.

The bank argues that over the past four years, we have seen significant growth in nuclear investment, with a compound growth rate of 14% compared to 1% before 2020.

With the election of Donald Trump as President of the U.S., the policy environment has also become favourable, and with several executive orders already signed, we should see an escalation in nuclear deployment.

The investment bank points to these stocks as ways to gain exposure to the trend.

Cameco Corp – is one of the largest uranium mining companies in the world with a $25 billion market capitalization. It owns stakes in two mines in Canada and one in Kazakhstan. Goldman rates Cameco as buy with a price target of $65, suggesting 11% upside.

I first recommended Cameco on March 1, 2024, when it was priced at $ 43.32.

It remains in our portfolio.

Vistra – The independent power producer owns a generation portfolio of 41 gigawatts, including 6.5 gigawatts of nuclear. Vistra is considered a candidate to strike a power agreement with a data centre or other large customer for nuclear. Goldman is neutral on Vistra with a price target of $134, implying 15% downside. I first recommended Vistra on January 6, 2025, when it was priced at $163.95. It will stay in our portfolio.

++++++++++++++++++++++++++++++++++++++++++++++++

The yo-yo decision-making of Mr Trump has continued, much to the frustration of investors and traders alike.

Last week, Mr Trump called for a 50% tariff on EU goods to begin on June 1. Not too long after this, he backtracked and indicated that this rollout would only begin to take place on July 9.

Everyone is looking for some continuity in policy – an even path – instead of navigating an unknowable maze.

Nvidia (NVDA) is set to report on Wednesday after the bell. Investors are hoping that strong results and a positive outlook from Nvidia could boost the recent outperformance in tech. Nvidia has rallied 20% this month. Higher bond yields have kept the market in check; however, a good earnings report may return some positivity to the market.

On the geopolitical front, Australia is considering joining the UK, France, and Canada as these countries contemplate imposing sanctions on Israel due to the country’s restricting food aid into the country.

MARKET UPDATE

S&P500

The index has weakened from the May 19 high at 5969. As the market is overbought, we could see this top in place for a few weeks. A range-bound market looks likely in the near term, but we cannot rule out sudden moves in either direction. Mass psychology is not controlling this market now. Rather, it is being moved by one person, or a handful of people who are making decisions at random, which is leading to frazzled investors and weary and wary traders. Uncertainty and volatility in the markets may be a theme for the foreseeable future.

Resistance: 5860/75, 5960/75

Support: 5760/75, 5685/20 area, 5530/45

GOLD

Gold remains controlled by quite tight and erratic market moves, and this is part of the formation of a larger topping pattern. Expect more uneven market moves as gold unwinds momentum.

Resistance: $3362/70, 3430 area

Support: $3270, $3195/05, $3130

BITCOIN

Bitcoin finally broke the Jan peak at 109.4k, recently reaching a new all-time high at 112k. There will probably be some digestion of this recent move now, and we could see some consolidation and/or some retracement price action. Look for signs of slowing momentum, tight ranges.

Resistance: 112.7/113.2k

Support: 105.2/105.7/99.2/93

QI CORNER