Guy Keller

Erik:      Joining me now is Tribeca Investment Partners fund manager, Guy Keller. Guy, it's great to get you back in the show. I can't believe it's been, wow, almost five years. I want to start with a chart that I know you're familiar with. Listeners, you'll find it in this week's uranium section of the postgame chart deck. That is Ocean Wall’s chart comparing the price appreciation of yellow cake uranium versus UF6 versus enriched uranium products. Guy, what this shows us is that the bull market in uranium that you and I, and a lot of other people predicted is on. It's on in spades. It's a raging bull market in enriched uranium nuclear reactor fuel, which is up 506% in the last three years. The price of it more than doubled in calendar year 2024 alone. The thing is, we can't invest in enriched uranium. We can only invest in the uranium feed stock that it's made from that's down on the year in 2024, despite the fact that I think there's an argument to be made that 2024 might just be the biggest bowl year ever in terms of news flow for the nuclear industry. Guy, what's going on? How is this possible?

Guy:      Yeah, thanks, Erik, and great to be back on your show again. Been very excited about this. It is a head scratcher, and I think it comes down to just simple capacity. The end user for uranium and nuclear utilities, most of them are not just nuclear. They live in companies that are also producing electricity from a number of other sources. The nuclear fuel buyer is also the same team, or sometimes individual, that is responsible for refueling and maintenance and a whole bunch of other things. And so, I just think it's just, they just lack the capacity to look across the whole fuel cycle. You've seen some very, obviously, changes from the US government, with the Russian import ban of enriched product, and then the Russian retaliation in restricting exports of enriched product to the US. There's lots of back and forth as to further sanctions from Europe and other parts of the world on enriched product from Russia. And as you know, and your listeners know, a large part of the enriched uranium that's required to make nuclear fuel rods comes from Russia. It's one part of the nuclear fuel cycle. And so, I think, because you've had all of that uncertainty, and you've had, especially US utilities having to scramble to ensure that they can replace that Russian material. They've kind of just been forced to ignore the uranium upstream side of the equation, because the EUP, the enrich uranium product, is much more near term for them. We used to take sort of two years from mine mouth to reactor core for the yellow cake to move through the fuel cycle with the Russian sanctions, that can now be closer to three years. So, the uranium required for tomorrow's enriched uranium product is three years away. So, as I said, I think it's just that they've been forced to focus further downstream to solve a near term problem, and assuming that they'll eventually have to come back to the uranium, and I think they will. I mean, last year was surprising in how little uranium was contracted, given that the term price of uranium appreciated throughout the year and held at that $82, $83 level, despite the volatility and in the much less traded spot price.

Rory Johnston

Erik:    Joining me now is Commodity Context founder, Rory Johnston. Rory, it's great to get you back on the show. Let's start with the big picture for oil markets, inventory fundamentals, where do we stand?

Rory:  Thanks for having me, Erik. I'm so happy to be back. Entering into 2025, we're in a really interesting point in this market, because 2024 itself was kind of a funny year after really everything between 2020, even 2019 through to 2022, 2023, we had just absolutely outrageous levels of volatility. We had every possible kind of tail risk you could imagine hitting the oil market, kind of back and forth, back and forth from literally, COVID, turning the industry upside down. Russia invading Ukraine, Houthis blockading the Red Sea. You had Israel and Iran, all of this stuff happening, but at the same time, then 2024 really just slowed down. You had the prices traded in their tightest range since before COVID, we had the overall supply and demand growth even slowed each of those years. You were accelerating coming out of that COVID slump. And then in 2024, it really just kind of ground to a halt. We saw really slow, both supply and demand growth. Now, I think that entering this year with this really low inventory position, particularly on crude oil, we're beginning to see demand re-accelerate a bit faster than we're seeing supply accelerate. So, I see this as a bullish factor heading into the year, and it's supported by the fact that the futures curve remains relatively backwardated, even after this latest pullback. So, I think the market remains kind of fundamentally undersupplied. I saw last year having a modest under supply annual average. I see this coming year, likely, assuming we don't get, and we're going to talk a lot about various policy risks coming down the line, but assuming those don't completely derail us, I see less likely having another modest supply deficit this year. So, if we have a low inventory position and another modest supply deficit, that means we're going to enter an even lower, or we're going to trend towards an even lower inventory position, and I think that means gradually higher prices from here, probably in the kind of, like low 80s Brent basis. And it's not that much higher than we are right now. I think, we're recording this on January 28 and where I'm looking at my screen right now, crudes that are out, $77.60 for Brent. So, I would say probably about 3, 4, 5, bucks higher is probably where I see fair value right now, that's kind of where I see us trending.

Michael Every

Erik:    Mike Joining me now is Michael Every, global strategist for economy and markets at Rabobank. Michael, it's great to get you on the show as a first time guest. I'd say, normally, if I was talking to somebody after the first year or so of a presidential administration, let's review all of those big moves that happened in the first year. We're recording this early Tuesday morning, Trump's only been in office one day, I think we've got a year's worth of stuff to talk about already. So, let's start with the big picture of, where are we? Obviously, this is the return of President Trump for his second term. How should investors be thinking about this? What is the big picture, what's the significance? What should we be looking for?

Michael:   Okay, let's start with the really easy thing that I think everyone listening can understand straight away, volatility. Welcome to a world of volatility, and we've had that already underlined just within the first 24 hours, where, prior to actually assuming office, we started to have the flood of insider news releases saying, well, don't worry, Trump's not going to bring in tariffs on day one. And you've got this flood of relief from the market, which, as we will discuss later I hope, is very wrongly placed. And yet, within hours already, then we had Trump just off the cuff while signing some executive orders saying he's thinking of putting 25% tariffs on Canada and Mexico starting February 1. And also, off hand, suggesting 100% tariffs on BRICS countries if they do certain things involving a BRICS currency, et cetera, et cetera. So, it's been a wild swing, just on that front already. And we've really just started to get warmed up.

Izabella Kaminska

Erik:    Joining me now is Izabella Kaminska, who is the editor and publisher of The Blind Spot. Most of you know her back from her FT Alphaville days when Izzy used to do, boy, just some of the best writing. Izzy, I think, in the industry, at least in terms of journalists, a lot of what you wrote, I thought, was much more on par with what I would expect in the quarterly letter from, let's say, a world class hedge fund manager, because you were really deep into the trades at a level that most financial journalists don't really ever go to. Then something happened. I'm not sure what, you defected to the dark side of the force and became a political journalist. You're running The Blind Spot. Now you're also the senior financial editor for Politico. Tell us a little bit about how you got there, but particularly, I really think it's timely, this is part of why I wanted to get you on the show this week. I think you've made this journey for whatever reasons of your own, into political reporting, but I think that finance is being carried much more into politics. If you want to understand macro investing, you better understand politics pretty darn well, at least that's my thought in this environment. Is that what led you to this? Or what's going on? And what do investors need to know about the increasing politicization of finance?

Izabella:   It's a great question, because the truth is that most of my life, I've tried to dodge politics. I've always found it incredibly insufferable. Hence, I ended up doing finance, because markets don't lie and I love that you get that sort of immediate feedback, and there isn't any, you know, it's honest. So, I kind of avoided politics. It wasn't something I was very interested in, but increasingly I was being pulled in that direction, because obviously, everything, money and power, all goes together. I left the FT mainly because I felt there was a big transition coming in terms of how mainstream media operates, and I wanted to be part of the sort of independent media, I was always a contrarian at the FT, and I just found towards the end of my time that it was getting harder to be a contrarian, whereas before, that market attitude of like, we must explore all sides of any story, that was being constrained a little bit at the FT, I felt that certainly there wasn't as much tolerance for contrarianism as there used to be. So, I left to start, effectively, a contrarian independent newsletter called The Blind Spot. And whilst I was doing that, I was very happy doing that, I got a call from Politico, from another former FT editor over there, asking me to join Politico because he felt that finance was being politicized now, and he wanted me to come and help Politico tell that story to the finance community, because politics is notoriously, sort of, bubbly. Everything happens on a very bubble level. Then we had the Liz Truss fiasco, and politics merged with finance and in ways that hadn't since the 1980s, really, or 2008, and I agreed. When he pointed it out, I really agreed with that assessment. I was like, wow, that's so true. The era of financialization is now giving way to politicization, and I wanted to be part of that story, so I was persuaded. And luckily, Politico were very nice and allowed me to maintain my little Blind Spot operation. So, I still do that. The day job is Politico, with the newsletter on the side. So that is where I am now. And I think the more I've got to understand how politics works, especially in Europe and in Brussels, I've become utterly persuaded that the financial community is missing a trick, in terms of not knowing or understanding how politics and what's going on at the policy level, and now is the time that you can't afford to miss out on policy developments, because the age of diregisme is back in Europe, at least, and if you're not paying attention, you won't make money. I certainly also echo the sort of thoughts of Russell Napier, another very well-known investment advisor, that this is going to be coupled with an age of financial repression in the West. So that's the overview I would say.

Luke Gromen

Erik:    Luke Joining me now is Forest For The Trees founder, Luke Gromen. Luke, we've got a new year, you're the first voice on MacroVoices for 2025. We chose you intentionally because you have such an excellent, high level macro perspective on so many different markets. So, holy cow, we've got a new year, rapidly changing geopolitics, an incoming presidential administration that couldn't be much different from the outgoing one. Where should we start? How should investors think about the big picture of what 2025 looks like? How's it going to be different from 2024?

Luke:  Thanks for me on, Erik. It's great to be here. Happy New Year to you. I think this year, we're exiting ‘24 and entering ‘25 with the US dollar, as measured by DXY, both that and the 10-Y Treasury Yield, basically on knife's edge of a, won't say a crisis, but I'll say a bumpy period. The dollar has borderline too strong, it's causing Treasury Yields to go up with the dollar. And so, it leads to me to an outlook, as I listen to what the incoming administration and its representatives are saying, they're talking about a lot of things that all else equal would further strengthen the dollar, tariffs, DOGE, the Fed may be trying to be a bit more hawkish, geopolitical tensions, all these things, all else equal are good for the dollar. And anything it's good for the dollar is going to be bad for 10-Y Treasuries, long term Treasury market, and anything that, you know, I think we're at about 4.7% on 10-Y Treasury Yield today, as we record this, I think 4.8%, 5% then there or beyond. I think things are going to start to get really sloppy in risk markets and in the economy, etc., and then we'll see where we go from there. And so it leads to this, I think, sort of two discrete periods of time, as I look out to 2025. For me, it's the next two to three months where I have very little visibility and very little conviction in what's about to happen, because I have very little visibility or conviction in, you know, the 16 cooks that are in the kitchen of the Trump administration, seemingly, but it seems like a lot of them are wanting policies that all else equal would send the dollar up, which is going to send everything else down from here for a period of time. And so, I think we're in for a period of bumpiness the next 2, 3 months. And then I think ultimately, 12 months from now, 6 months from now, later this year, whatever. I think we're going to get policies that weaken the dollar in order to kind of smooth things over and to boost nominal GDP growth. Because in the end, the only way out of this debts issue that we have is with higher nominal GDP growth. So those are kind of the two discrete periods of time, next 2 to 3 months, I have no idea, but I think it's going to be bumpy. And then after that, I think bullish for stocks. It's bullish especially industrials. I think it's bullish for gold. I think it's bullish for Bitcoin, as I think the dollar is going to get weak in one way or another.

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MACRO VOICES is presented for informational and entertainment purposes only. The information presented in MACRO VOICES should NOT be construed as investment advice. Always consult a licensed investment professional before making important investment decisions. The opinions expressed on MACRO VOICES are those of the participants. MACRO VOICES, its producers, and hosts Erik Townsend and Patrick Ceresna shall NOT be liable for losses resulting from investment decisions based on information or viewpoints presented on MACRO VOICES.

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