Cover:
-Constellation Energy, a leading independent power producer, is on the brink of producing more electricity than any company on earth. With 21 nuclear reactors, it accounts for about a quarter of America's nuclear generation. The company also owns wind farms and hydroelectric plants. It is acquiring Calpine, one of the country's largest operators of natural-gas plants, likely before year-end. Despite its size, Constellation is far from a household name, with its logo not even on customer bills. CEO Dominguez has been modest about the company's size, as it was barely on anyone's radar three years ago when it spun out of utility Exelon. Since its debut in 2022, Constellation stock has rocketed more than 750%, giving the company a market value of $125B. Dominguez has signed deals with Meta Platforms and Microsoft to buy power from Constellation's reactors for their artificial intelligence data centers.
Interview:
-Constellation Energy CEO Joe Dominguez aims to turn short-term revenue into long-term growth by focusing on the real power in the industry. He plans to bulk up by buying Calpine for $26.6 billion in stock and cash, which will boost Constellation's potential electricity output by 80%. Calpine owns 61 natural-gas plants, battery-storage installations, and the country's largest geothermal resource, the Geysers. The deal will leave Constellation as the face of modern power generation, providing enough electricity to serve over 40M homes and selling much of it to commercial and industrial companies.
Tech Trader:
-The 2025 Nobel Prize in economics was awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt by the Royal Swedish Academy of Sciences. Their work on the economics of technological innovation is crucial for understanding how AI could change the economic landscape. The Nobel Prize highlights the importance of a balance between government policy and free markets in US innovation. Mokyr, an economic historian, explains that the industrial revolution led to sustained economic growth, with scientists producing knowledge that doesn't impact economic growth. Technologists and capitalists then turn this knowledge into new products, services, and business processes, creating wealth that funds new scientific inquiry through private and public grants. This new culture of openness to science and technology has contributed to the current state of technology.
The Trader:
-Gold has seen a 57% increase in 2025, with new all-time closing highs 21 times over the past 63 trading sessions. The S&P 500 has advanced just 13.2% this year, and Nvidia, the best-performing Mag 7 stock, has risen just 34%. The rally in gold prices didn't come out of nowhere, as central banks have been net buyers of gold following the Russian invasion of Ukraine. Private investors in the US, Europe, and China have also piled into gold. Although the metal is trading at well over $4,000 an ounce, there are still many prominent bulls, including JPMorgan Chase CEO Jamie Dimon, who said it could easily go to $5,000, $10,000 in environments like this. However, gold can't go up forever, and there are signs that the precious metal might be due for a respite. Silver prices hit their first record high since 1980, a sign that investors have found another shiny distraction. Investors are still looking for a catalyst, such as a Federal Reserve tightening cycle, higher oil prices, or a stronger yen or renminbi.
-Walmart is partnering with OpenAI to enable customers to purchase its products through ChatGPT using Instant Checkout. This move goes a step further by allowing customers to shop ChatGPT recommendations directly. OpenAI announced that consumers would be able to buy Etsy merchandise directly from its platform at the end of September. As AI recommendations and chatbots become more prevalent, consumers are turning to the technology to find specific products instead of relying on search engines. Retailers and other consumer-facing companies already have AI-enabled search on their websites. Investors are exploring ways to monetize AI growth, such as in-platform shopping and affiliate links.
Features:
-Colgate-Palmolive, a leading household product company, has experienced a rocky 12 months, with its shares falling over 20% to $79. However, the company's popularity in oral care and its high percentage of sales from higher-growth developing markets make it a potential investment. Colgate is also the global leader in toothpaste, with a 41% market share, and is also No. 1 in manual toothbrushes and liquid hand soap. Oral care accounts for over 40% of Colgate's global sales, and there is little private-label competition in that sector. Colgate's stable business and solid dividend make it an ideal antidote to the AI trade if the AI market goes bad. Evercore analyst Robert Ottenstein has an Outperform rating and $100 price target on the stock.
-Quanta Services, an industrial services provider, is a key player in the US electricity market, maintaining aging power plants and modernizing transmission lines due to the increasing demand for electricity due to artificial intelligence. The company's unique selling point is its skilled and skilled workforce, which makes it an irreplaceable company in terms of scale and quality of labor. Quanta's backlog of $36B and counting provides strong visibility into long-term growth, as tech giants continue to expand their capacity. The company's pricing power is a key factor in its success, as data centers are power-hungry and the grid isn't built for this kind of load. This has led to predictable growth, expanding margins, and rising free cash flow.
Europe:
-Chinese President Xi Jinping is preventing Russian President Vladimir Putin's economy from collapsing in the Ukraine war, making it a proxy conflict between the US and China. Trump, who failed to persuade Putin to end the war, is now supporting Ukraine and starting to embrace its president, Volodymyr Zelensky. Zelensky has expressed hopes that Trump would agree to send long-range Tomahawk missiles to Ukraine, but Trump is reluctant due to the heavily constrained trajectory of Putin's war. Trump's strategy also requires Zelensky and European allies to intensify pressure on Russia, freezing Russian assets and taking broader actions to weaken the Russian economy. Washington would supply some weapons, money, and intelligence but not engage Russia militarily, marking a new and potentially prolonged phase of the conflict. Trump's advisors may also employ the global financial network, Swift, which is essential for international banks to send and receive financial information.
Emerging Markets:
-No update
Commodities:
-MP Materials and other rare earth stocks fell for a third day, dropping 3.6% to $80.79, following a 6.7% drop in the previous session. The stock fell due to tensions between the US and China, as Beijing tightened export controls on certain rare-earth materials. President Trump threatened more tariffs, and MP and other stocks surged earlier this week. China currently dominates the supply chain for rare-earth materials, and the Defense Department invested in MP Materials to ensure future supply. However, shares of the three stocks were up an average of 323%. While MP and Ramaco stocks are back below analysts' average price targets, the recent gains and volatility haven't led to any downgrades. The US is expected to produce more rare earth materials in the future, which is a positive for all three stocks.
Streetwise:
-The chemicals industry is experiencing a downturn, with companies like Dow, LyondellBasell Industries, CF Industries, and specialty chemicals companies underperforming. Dow and Lyondell have lost 42% and 29% respectively, while CF Industries is down 9%. Specialty chemicals companies like PPG Industries and International Flavors & Fragrances have also seen underperformance. The lack of dividends is causing the returns to be worse, as some payments are not covered by profits. Dow cut its dividend in half in late July, leading to a 17% loss and a further 13% drop since. Matthew DeYoe, who covers the chemical industry for BofA, explains that companies face a cluster of challenges that won't be easily fixed but aren't necessarily warning signs. Investors should stay "downstream" with a few specialty product companies.