A September Rate Cut Is a Lock, Unless

Economic Indicators - The Producer Price Index (PPI) fell by 0.1%, significantly below the expected 0.3% increase, indicating a reversal from a 0.7% rise in July [5][6] - Year-over-year PPI rate decreased to 2.6% from 3.1% in July, while core PPI also fell by 0.1% against expectations of a 0.3% rise, with a 12-month increase of 2.8% [5][6] Interest Rate Outlook - The softer inflation data suggests a high likelihood of an interest rate cut at the upcoming September FOMC meeting, with expectations shifting from three to potentially four rate cuts [6][8] - The CME Group's FedWatch Tool indicates an 88% probability of a quarter-point cut and 12% for a half-point cut [8] AI and Nuclear Energy - The demand for nuclear energy is expected to surge due to the energy-intensive nature of AI technologies, with major tech companies like Microsoft, Amazon, and Google investing in nuclear projects [12][13] - China is projected to consume one-third of the global uranium supply by 2030, with imports expected to rise to approximately 55 million pounds per year by 2026 [15][16] Uranium Market Dynamics - Operational issues at major uranium mines, such as Cameco's McArthur River and Kazakhstan's Kazatomprom, may lead to a 20-million-pound decline in uranium supply forecasts [16] - The uranium sector is viewed as a sound investment opportunity, with Cameco Corp. highlighted for its high-grade assets and strategic partnerships in the nuclear space [24][25] Investment Recommendations - Companies like Constellation Energy, Vistra, and NextEra Energy are positioned to benefit from rising electricity demands driven by AI data centers and the growing nuclear energy sector [26]