May 27, 2024

 

(ARE WE ON THE VERGE OF A RENAISSANCE IN NUCLEAR ENERGY?)

May 27, 2024

 

Hello everyone,

Week Ahead Calendar

Monday, May 27

Australian Retail Sales

Previous:  -0.4%

Time: 9:30 p.m. ET

 

Tuesday, May 28

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

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

10 a.m. Consumer Confidence (May)

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

Australia CPI Indicator

Previous: 3.5%

Time: 9:30 p.m. ET

 

Wednesday, May 29

10 a.m. Richmond Fed Index (May)

2 p.m. Fed Beige Book

Germany Inflation Rate

Previous: 2.2%

Time: 8:00 a.m. ET

Earnings:  HP, Salesforce, Afilent Technologies

 

Thursday, May 30

8:30 a.m. Continuing Jobless Claims (05/18)

8:30 a.m. GDP (Q1)

Previous: 3.4%

8:30 a.m. Initial Claims (05/25)

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

10 a.m. Pending Home Sales (April)

Earnings: Costco Wholesale, Ulta Beauty, NetApp, BestBuy, Dollar General, Hormel Foods

 

Friday, May 31

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

Previous: 2.8%

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

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

 

Strong US PMI data last week brought back uncertainty about rate cut possibilities this year.  Markets are now predicting only one 25 bps rate cut by the end of the year, with that cut likely delayed until November.  US GDP data and the closely monitored PCE inflation rate coming this week could shift the odds further in either direction, possibly affecting USD prices as well.

Are we at the beginning of a resurgence in nuclear energy?

Fifteen years ago, the notion of a nuclear renaissance got shelved due to the political emphasis on renewables and competitively priced alternatives.

The 2011 Fukushima nuclear disaster in Japan also heightened scrutiny on safety.

Now, there are rumblings afoot that there is a resurgence on the horizon.

Electricity demand is forecast to surge due in part to the growth of data centres and artificial intelligence.  Demand is growing at the same time that countries are in search of reliable carbon-free energy to address climate change.

After a spate of nuclear plant closures over the past decade, reactors are now being modernized to extend their service life and communities are showing interest in new plants as they phase out coal, according to Morgan Stanley analysts.

Various nations throughout Europe are endeavouring to shore up their energy independence in the wake of Russia’s full-scale invasion of Ukraine. Morgan Stanley analysts expect that 20-25 new third-generation nuclear power plant builds will eventually take place in Europe alone over the next decade.

Curtiss-Wright is one stock poised to benefit from the increasing number of power plants and the modernization of current plants, which is designed to extend their service life. 

The company supplies equipment, technical talent and advanced technology and innovative solutions in operating reactors to ensure their safe and reliable operation.

The company supplies all 94 reactors in the U.S. and all nineteen in Canada as well as plants in South Korea.  According to management at Curtiss-Wright, modernization of current nuclear plants in the U.S. is a $7 billion opportunity through 2050.

Morgan Stanley estimates that Curtiss-Wright could realize $4.9 billion in revenue through 2050 on AP1000 builds.  With this scenario, the company’s valuation rises to $488 per share, implying nearly 74% upside from Friday’s close.

I am not recommending you buy this company now.  I wanted to inform you of the interesting developments in this space and the potential of significant investment in this area and be aware of opportunities that will exist going forward.

Market Update:

S&P500 – Advance in progress. 

Gold – has succumbed to a short-term correction.  We see chart support at around $2270. In the “Bigger Picture” the outlook remains bullish with the next target situated at around $2,530.

Bitcoin -Advance in progress.  The next key targets are $71,957, $73,794 and $80,628.  Support lies at a max. position of $63,000.  (As I said last week, I would not be surprised to see a drop to around $50k in bitcoin at some stage in the future before strong upside rally takes hold).

 

 

 

 

Wishing you all a great week.

Cheers,

Jacquie