💰 5 Fact Friday: Is Nuclear The New AI Trade?

MARKETS
1. Q3 In Review, Q4 In Focus 🔍

As we kick off Q4, let’s take a quick look back at what shaped the markets last quarter.

The “Great Rotation” we first flagged in mid-July only gained momentum throughout Q3. By the end of September, 67% of S&P 500 companies had outperformed the index—a dramatic shift from the tech-dominance of early 2024.

This broadening is a healthy sign, as it signals more widespread growth. Index investors saw strong returns and now have less reliance on mega-cap giants like Apple, Microsoft, and Nvidia.

Utilities led the charge, surging almost 20%, while Real Estate and Industrials clocked in double-digit gains. Even the Equal Weight S&P 500 index outpaced the main index—proof that small and mid-sized companies are finding favor again.

With more diversification and performance spreading across sectors, investor sentiment is improving.

Last week’s poll showed that nearly 90% of us maniacs expect stocks to sustain or build on this year’s momentum. And Mr. Market seems to agree.

Valuations are looking stretched though. The forward price-to-earnings (P/E) ratio—a key measure of how ‘expensive’ stocks are—is at its highest level at the start of an interest rate cutting cycle in over 60 years.

UBS, a prominent $40 billion Swiss bank, doesn’t seem concerned. They’re already throwing around comparisons to the “roaring 20s”—a period defined by:

• Strong GDP growth of 2.5% or more

• Inflation under control at 2-3%

• 3.5-4% yields on 10-year Treasuries

But that bullish view comes with a caveat: If earnings miss the mark, valuations could collapse, setting us up for a painful correction.

It’s a classic tug-of-war between optimism and risk.

Personally, I’m in the ‘glass half-full’ camp. With AI’s impact growing, companies trimming the fat, and a potential consumer comeback, we could be in for a strong Q4.

OUR PARTNER: VANTAGEPOINT

Electionomics: Harris vs. Trump and How to Trade It

This election is unlike any other, and I want to help you discover what to trade using Electionomics.

It’s easier than it sounds...

You’ll learn, for FREE, how to uncover hidden connections in the stock market with the world’s leading forecasting tool—founded by my father back when Ronald Reagan was president.

For over 30 years, and with more than $10 million invested in the past decade alone, we’ve relentlessly refined this tool to give traders like you the best edge in the markets.

Now, in 2024, we’re still at the forefront of the industry. You don’t want to miss live class because we’ll be showing the top 3 trades we’re finding right now.

Click here to learn exactly how to use it (for FREE).

ENERGY
2. Is Nuclear The New AI Trade? ⚡

With tech giants like Microsoft, Amazon, and even OpenAI founder Sam Altman jumping into the sector, it just might be.

Why the sudden glow-up for nuclear power? It all comes down to demand.

Data centers, which power AI models like ChatGPT, are expected to consume up to 9% of U.S. electricity by 2030—double today’s levels. That’s a huge strain on the grid, and nuclear’s carbon-free, always-on energy is looking more attractive than ever.

Several major deals are already in the works:

Microsoft partnered with Constellation Energy to restart the dormant Unit 1 reactor at Three Mile Island. (Not Unit 2—the one that suffered a partial meltdown in 1979.)

Meanwhile, Amazon acquired Talen Energy’s nuclear-powered data center.

But why the shift to nuclear?

For years, it was priced out by cheap natural gas.

Now, thanks to new tax credits from the Inflation Reduction Act, nuclear has become more financially competitive. Plus, it’s reliable in a way that wind and solar just aren’t—making it ideal for power-hungry data centers.

The challenge? Upfront costs.

Building new reactors is extremely capital-intensive, with about 60% of the lifetime energy costs coming upfront. That’s why restarting old capacity and retrofitting shuttered coal plants (which already have transmission lines) is the move.

Stock investors are catching on.

Constellation Energy ($CEG) has surged 141% YTD, Vistra ($VST) has jumped 248%, and Talen Energy ($TLN) is up 179%. But these gains aren’t just about the announced deals—it’s about what they signal.

If the U.S. is serious about embracing nuclear, these companies could see tremendous growth in the years ahead.

Some estimates suggest that to meet future energy demand, the U.S. may need to triple its nuclear capacity, potentially requiring 200 new plants.

Community Check-In 💬

Let’s tap into the wisdom of our community! Over the next few weeks, I’ll be gathering your thoughts on the markets and where things might be headed.

Please tap your answer below! 👇

ECONOMY
3. Automakers Hit A Speed Bump 🚗

New car sales are grinding to a halt.

U.S. vehicle sales dropped 1.9% year-over-year (YoY) in Q3—even as dealers pulled out every trick in the book: 0% financing, cash-back, and free premium add-ons.

Analysts now expect domestic sales of just 15.7 million vehicles this year—well below the 17 million pace from 2015 to 2019.

Blame it on sticker shock and sky-high insurance premiums.

Sure, the average new car price is down 3% from last year, but it’s still sitting at a gut-wrenching $44,467—almost $10K more than pre-pandemic levels. Then add the 51% surge in auto insurance rates over the past three years, and suddenly holding onto your old ride doesn’t seem like a bad idea.

No wonder automakers are struggling to hit the gas:

• Stellantis (think Jeep, Dodge, Ram) reported a brutal 20% drop in U.S. sales—one of the worst showings among major brands.

• Toyota stumbled too, with sales down 6%.

• GM managed only a 2% sales dip, driven by weaker pickup sales.

Even luxury names like Aston Martin, BMW, and Mercedes have slashed their forecasts, signaling that the global auto market is stuck in the mud.

Dealers are responding the only way they know how: more incentives! Over-MSRP days are long gone, with brands now offering an average 7.2% (~$3,400) off sticker prices just to clear out their 2024 inventory.

The one bright spot? Electric vehicles.

EV sales are expected to grow 8% YoY, thanks to government credits and even fatter incentives, which now make up 13.3% of the average purchase price.

• Tesla’s Q3 deliveries rose 6% from last year but narrowly missed Wall Street expectations.

• Ford saw a 1% sales increase, due to a 12% rise in EVs.

• GM clocked a 60% leap in EV sales.

Until affordability returns, U.S. consumers are holding out. That’s why the push from new entrants like China’s BYD is so scary. As they expand into Western markets and squeeze margins, the entire industry is stuck in the slow lane.

The Takeaway

It’s a buyer’s market. If you’re hunting for a new ride, your best bet is to shop at the end of the month or, even better, during December’s year-end sales push.

Dealers will be more willing to negotiate to hit their quotas, which could mean scoring that new car for way below sticker price.

OUR PARTNER: ELF LABS
The Biggest Breakthrough In Next-Gen Tech Since iPhone

History is being made in the $2T global entertainment & media industry, and you can get a piece by investing in Elf Labs—but only for a limited time.

With over 100 historic trademark victories, Elf Labs owns rights to top-grossing characters like Cinderella, Snow White, and the Little Mermaid, generating billions in revenue. Now, they’re revolutionizing these icons with patented AR, VR, and advanced compression technology.

Become an Elf Labs shareholder today and receive 5% bonus shares!

PERSONAL FINANCE
4. Why Hoarding Points Is Costing You 🚫

Credit card points may feel like free money, but sitting on them is not a winning strategy.

Why? One word—pointsflation. Just like regular inflation eats away at your dollars, points are suffering a similar fate.

Since 2019, the dollar’s purchasing power has dropped about 21%. Meanwhile, the cost of an economy flight booked with points has jumped 28%, exceeding even inflation’s impact.

Banks are onto this. But instead of adjusting valuations, they’ve simply sweetened sign-up bonuses to make it look like you’re getting more. Don’t be fooled.

Plus, there’s always the risk of losing points.

Most credit card programs say your points are safe as long as your card remains open—but other programs are more susceptible. I’ve personally had both United and American Airlines points vanish due to inactivity.

The Takeaway

Don’t treat points like a savings account—they’re closer to a perishable good. Instead of holding out for the perfect redemption, use them early and often.

That way, you can keep your savings in productive accounts (like high-yield savings or the stock market) where it’ll actually grow. Your wallet will thank you!

MANIAC PICKS

🛒 Whole Foods Hacks: Think you know how to score a deal? Learn 36 tricks—like chatting up the butcher, buying a half portion, and getting strategic with the salad bar—that can save you time and money.

🚢 Back To Business: 50,000 longshoremen from Maine to Texas are heading back to work this morning. A tentative agreement reached last night will give them a $4/hr annual raise for each of the next six years.

💸 Tipping Overboard: Tired of tipping on everything from coffee to oil changes? You’re not alone—90% of Americans say it’s gone too far. Find out where people draw the line and why the pushback is growing.

🪙 Membership Metals: Costco’s platinum bars are the newest “members only” deal, joining their lineup of gold and silver collectibles. Just $1,089.99 gets you Lady Fortuna’s blessing.

🤖 AI On The Rise: OpenAI, creator of ChatGPT, just closed a fresh $6.6 billion funding round. The AI giant now boasts a $157 billion valuation—on par with Uber—despite projections for a $5 billion loss this year.

STOCKS
5. Guess Today’s Mystery Stock 🕵️‍♂️

Up for a challenge? This athletic brand is struggling to keep pace with new rivals. Here are 5 clues about a company that’s trying to outrun its recent stumbles.

1. The sportswear giant saw revenue slip 10% last quarter, falling to $11.6 billion. With more pain expected, the stock is now down 23% for the year.

2. Once the king of its category, the brand now finds itself losing market share to hungry competitors like On Running and Deckers.

3. Oversaturating the market with certain styles (like its once-iconic Dunks) has drained the brand’s “cool” factor, making it harder to justify premium price tags.

4. During the pandemic, the company cut ties with wholesalers like Foot Locker to push its direct-to-consumer strategy. But the pivot wasn’t as successful as hoped, and now the brand is retracing its steps.

5. To right the ship, a CEO shake-up is in the works. A longtime company insider—who got his start as a sales intern—will be taking over the top spot later this month.

Got a guess? Tap here to reveal the answer → 

Thanks For Reading!

Spread The Wealth 💸

Like what you read? Do me a favor and don’t keep it a secret! Send this newsletter to a friend and help them level up their financial game—one fact at a time.

Click the button above -or- copy and paste this link: https://read.themoneymaniac.com/subscribe?ref=PLACEHOLDER