Good morning from the runway.
I’m headed to London for a quick day trip of meetings… then to NYC next week.
The S&P 500 has traded sideways over the past two weeks.
The more interesting trend is what’s happening underneath the surface.
Big tech stocks carried the market higher in 2023. Now, sectors like healthcare are picking up the slack. This is what the pros call “rotation.” It’s the sign of a healthy market.
Meanwhile, the leaders keep on leading.
Artificial intelligence (AI) chip kingpin Nvidia (NVDA) hit a new all-time high yesterday.
Let’s get after it…
The race to replace the iPhone is heating up.
We need something new to interact with AI. Tapping a six-inch glass screen won’t cut it.
I showed you Humane’s ChatGPT-powered pin that clips to your shirt a few weeks ago. Facebook’s (META) AR glasses continue to impress me.
And a new contender just entered the race.
Check out the R1 from startup Rabbit. It’s an AI-powered device that’s about half the size of your iPhone:
This handheld device is basically a super all-in-one app.
Instead of having to open the Uber app and type in where you want to go, you just tell the R1, “Order me a taxi to the Empire State building”… and it automatically does it for you.
You can play music, buy groceries, and send messages… all on one screen.
One of my big expectations is that AI will make interacting with technology more natural.
Instead of awkwardly tapping and swiping, we can just talk to the machine, and it’ll understand us.
I doubt Rabbit’s R1 is the iPhone killer, but it’s a step in the right direction. And it’s great to see hardware innovation after 16 years of iPhone dominance.
Time to try out weird new products again.
And, of course, Nvidia will win no matter what.
Here’s a great chart showing the relationship between a country’s wealth and its electricity consumption.
As the chart states, there’s “no such thing as a low-energy rich country.”
Energy is life. Without it, there’s only darkness, cold, and death.
Everything wonderful—from your refrigerator to your HVAC system to your car and AI—requires energy. More energy = more prosperity.
So it makes sense to adopt the cleanest, safest, and most abundant energy source.
America made a horrible decision turning its back on nuclear energy in the 1970s, which is indisputably the cleanest, safest, most reliable form of electricity known to man.
Thankfully, the bureaucrats have gotten some sense and are reembracing nuclear power.
At the UN’s Climate Change Conference last month, two dozen countries—including America—committed to tripling nuclear energy by 2050. To meet these goals, the world must build roughly 50 large nuclear reactors per year over the next 25 years. That’s a huge deal.
The US Nuclear Regulatory Commission recently approved the first new reactor design in over 50 years. More—and better—nuclear plants coming soon.
California has been the most anti-nuclear US state. Yet Governor Newsom signed a law keeping California’s Diablo Canyon plant open until at least 2030.
Meanwhile, Japan just restarted the world's biggest nuclear plant, which has been offline since 2012 following the Fukushima disaster.
In my “WTF happened in 2023?” series, I showed you how expensive energy suppresses real innovation.
Nuclear gives us clean, cheap, abundant energy, which is the precursor to achieving that “Jetsons” sci-fi future we’ve all been waiting for.
This renaissance is causing demand in uranium to spike. Uranium prices are breaking out to 15-year highs as I type.
I’ve been recommending the “Exxon Mobil” of uranium, Cameco (CCJ), to RiskHedge readers since 2018. It’s up over 350% since then, and there’s plenty of juice left.
Ignoring the news is my New Year’s resolution.
It’s a never-ending feed of the worst things happening on a given day. And a recent study from Wharton and London Business School showed it’s getting even worse.
The researchers used AI to sift through 1 billion newspaper articles from the past 170 years. They found “sentiment” (how positive or negative the news is) is crashing to new lows:
A few thoughts…
There’s an old saying, “If it bleeds, it leads.” Bad news gets more attention than good news, which is why the media is mostly negative.
Funny story: In 2014, a local Russian newspaper decided to report only positive news. It lost two-thirds of its readers.
Notice how sentiment falls off a cliff in the early 1970s and never recovers? I’d argue—as I did in my “WTF happened in 2023?” series—this is due to energy getting more expensive and stifling innovation.
I hope the nuclear renaissance can reverse that.
But there’s no hope for the Negative Nancies in news rooms across America.
TURN OFF THE NEWS!
I’ll talk with you Monday.
Stephen McBride
Chief Analyst, RiskHedge
PS: My good friend and colleague Ed D’Agostino, Publisher and COO of Mauldin Economics, recently recorded a 2024 Macro Outlook briefing you might find interesting. Ed is one of the best “big picture” thinkers I know. You might remember him from my recent AI Summit…
Right now, Ed believes we’re at an inflection point—in the markets, the country, and the world as a whole—because he thinks we’re heading into a new investing environment. And it’s nothing like what most investors are used to.
So what can you do to prepare? That’s what Ed discusses. Including the key details about three themes he and his team are tracking (hint: AI is one of the big ones). Click here to watch now.