The Nuclear Option

Hey Influence Traders,

It’s the weekend … or the end of it!

Also, did everyone pick-up my report on Bitcoin 2021, the big crypto event in Miami last week?

If not, grab it here!

The Highlights

      • The G7 meeting has come and gone with little to show for it
      • Some bipartisan movement on infrastructure
      • Medical hackers
      • Hacked mosquitoes

DC Action

      • G7 Meeting – G7 “mutual adoration society” seems to have produced a big bunch of nothing besides promises to do stuff:
        • The G7 will offer a more attractive alternative to the model that China is proposing for the world, including “action against forced labor practices in the agricultural, solar, and garment sectors” and shoring up “supply chain resilience and technology standards.”
        • The group plans to share at least 1 billion coronavirus shots with struggling countries around the world.
        • The group did not reach agreement on a timeline to eliminate the use of coal for generating electric power, to the deep disappointment of climate activists.
        • The leaders’ endorsed a global minimum tax, which will most likely be 15%.
      • Russian Summit – President Biden meets with Russian President Vladimir Putin this week in an attempt to “seek a more stable, predictable relationship with Russia.”
      • Antitrust Legislation – the House lawmakers on Friday introduced sweeping antitrust legislation aimed at restraining the power of Big Tech and staving off corporate consolidation.
      • Buy America – the Biden administration issued guidance to federal agencies to supplement Biden’s “Made in America" executive order by reducing waivers and increasing transparency.

The guidance outlines processes that agencies must follow if they wish to submit waivers to work around the Made in America order in an effort to cut down on the need for exemptions.

Government agencies are able to obtain exemptions for Buy American requirements in certain circumstances, including if the materials they are seeking aren't available domestically, if the cost is deemed unreasonable or if it would violate trade agreements or deals with foreign governments.

      • Infrastructure Spending – in a rare show of bipartisan cooperation, a group of 10 senators agreed to pitch a $1.2 trillion eight-year infrastructure package to Biden, which calls for $579 billion in net new spending, but is still well below the $1.7 trillion Biden proposed.
      • Air Quality – the Environmental Protection Agency (EPA) is reconsidering tightening air quality standards for soot.

Power Moves Portfolio Roundup

Just a little bragging – we made a great call on Cleveland Cliffs (Ticker: CLF).

That American steel producer has been slaying it.

It was announced this week that iron ore prices climbed to almost $220 a ton, close to their all-time highs, as global crude steel demand exceeded 2 billion tons for the first time ever and Beijing’s exports are anticipated to be significantly lower.

To celebrate, we sold some put spreads.

See our trades and track record here.

Power Mover of the Week

The nominees are …

      • Underdog Women – Barbora Krejcikova, unseeded and barely ranked in the top 100, won the French Open. (Top-seeded Novak Djokovic won on the men’s side, FYI.)
      • Hackers (still) – Ryuk, a gang of Eastern European cybercriminals with alleged ties 
      • to Russian government security services, collected over $100 million in ransom last year from hits on over 235 hospitals, inpatient psychiatric facilities and other healthcare facilities in the U.S.

 

      • Nuclear Mosquitos – Ok, not really nuclear, but an Indonesian trial using mosquitoes infected with bacteria that provide a natural defense against dengue fever (responsible for 400 million infections and thousands of deaths each year) has shown to cut virus transmission by more than 77%. (Hollywood is looking at it as the start of their next zombie script).fds

But my Power Mover of the Week isNuclear Energy.

There are numerous bills and executive orders circulating around DC that promote green energy spending and reduced emission standards.

Neither of those things can occur without a serious look at nuclear.

Power Loser of the Week

      • IRS – the agency that we pay to take money from us … oversaw an unauthorized disclosure of tax data to ProPublica of wealthy taxpayers’ information.

Republicans, already critical of President Biden’s proposal to give the IRS significantly more resources, went on the warpath arguing that it undermines taxpayers’ ability to have confidence in the agency.

      • Democratic Cohesiveness – cracks are beginning to show in the party’s post-Trump unity over infrastructure spending, the climate, the middle-east, the filibuster rule and the border crisis, among other issues.

For example, many Biden allies (under conditions of anonymity, of course) condemned Vice President Harris’s trip to Guatemala and Mexico as a “disaster.”

With a stalling agenda, and midterm elections looming, Dem lawmakers are getting nervous as they seem to be giving a lot of fuel for Republicans to throw on fires.

But my Power Loser of the week has to be … Big Tech.

Five bipartisan antitrust bills introduced by the House are aimed squarely at Amazon (Ticker: AMZN), Apple (Ticker: AAPL), Facebook (Ticker: FB) and Google (Ticker: GOOG) and their grip on online commerce, information and entertainment.

If passed, the bills would make it easier to break up businesses and create hurdles for acquisitions of rivals by raising the bar on the proof required to show that mergers aren’t anticompetitive.

In addition, a company like AMZN would face more scrutiny when selling its own branded products and AAPL would have a harder time entering new lines of business that are promoted on its App Store.

(1)  Co-sponsored by Reps. David Cicilline (D-R.I.) and Lance Gooden (R-Texas) would prohibit tech giants from self-preferencing their own products on their platforms. 

(2)  Co-sponsored by Reps. Pramila Jayapal (D-Wash.) and Gooden would eliminate the ability of platforms to self-preference or disadvantage competitors in ways that undermine free and fair competition. 

(3)  Co-sponsored by Reps. Hakeem Jeffries (D-N.Y.) and Ken Buck (R-Colo.) would prohibit platforms from acquiring competitive threats, such as FB’s acquisition of WhatsApp and Instagram.

(4)  Co-sponsored by Reps. Mary Scanlon (D-Pa.) and Burgess Owens (R-Utah) would require online platforms to lower barriers for users and businesses to switch data to other services. 

(5)  Co-sponsored by Reps. Joe Neguse (D-Colo.) and Victoria Spartz (R-Ind.) would increase the filing fees paid to antitrust agencies for merger reviews.

The bipartisan nature of these bills will mean wide support as they move through the voting process, although not all will be viewed with equal vigor, and are almost certainly going to be attacked in court by some of the platforms.

Either way, tech giants have been put on notice. Litigation budgets are probably going up! 

Does that mean you shouldn’t own them? Not necessarily – it could make growth prospects more difficult but owning multiple broken up companies is a #powermove.

Nuclear Power

The push for green energy is going into high gear, from executive orders to the EPA’s push for tighter air quality standards.

If the U.S. is going to cut emissions and truly create a green energy infrastructure, it can’t ignore nuclear options.

I love firms like Nuclear Fuel Services, Inc., a subsidiary of Lynchburg, Va.-headquartered BWX Technologies, Inc. (Ticker: BWXT), which was awarded a $57.5 million contract from the National Nuclear Security Administration to convert natural or depleted uranium to purified highly enriched uranium metal.

But volume on BWXT has been low and that has made trading it tough.

Another play is Denison Mines Corp. (Ticker: DNN), which is going into the Power Moves Portfolio starting line-up.

DNN is a Canadian uranium exploration, development and production company. It is a top uranium miner, with a focus on its low-cost Phoenix In-Situ Recovery uranium development project.

While the stock touched an all-time high in February, the uranium market is showing signs of upward movement.

The company is focused on both internal and external expansion. It recently appointed a new board chairman and director, and has made a number of strategic acquisitions.

This is not a quick play. There is enough controversy in the nuclear area to cause concern, and DNN did record losses last quarter.

But there is money to be made in this trade. Stay tuned to the Power Moves Portfolio and drop questions/comments below.

Cutting Through the Noise for You.

Frank

 

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