Last call for Louis’ free replay… MP Materials jumps again… inflation ticks up slightly, but no major red flags… where Eric Fry is looking for his next 10-bagger… a warning shot for the trucking industry
Has one of your stock picks ever doubled in less than a week?
One of Louis Navellier’s picks just did.
As a quick catch-up, we’re in an AI race against China… Beijing controls 80% of the rare earth elements (REEs) that are critical to building out our cutting-edge AI, robotics, and defense systems… so, President Trump has been on a warpath to secure these REEs… a handful of specific REE stocks stand to benefit.
Louis has found five small REE companies that are in the crosshairs of potentially hundreds of millions – even billions – of dollars’ worth of investment capital. And that’s not hyperbole.
During his broadcast last Wednesday, Louis revealed one of his top picks to attendees – MP Materials (MP).
The very next morning, the Pentagon announced a $400 million investment into MP Materials, instantly positioning the company as a strategic national security play – and sending its stock soaring 51% on Thursday.
And just this morning, we’ve learned that Apple is investing $500 million into MP Materials.
Why?
For the same underlying reason Louis mapped out last Wednesday – we’re in a battle for key technological components with China – in Apple’s case, rare earth magnets – so both our government and specific tech leaders are taking bold action steps.
MP Materials is up 24% today as I write. Since Louis’ free giveaway last week, the stock has soared 102%.
You can get the full REE story and investment opportunity – plus more details on the five additional REE stocks that Louis believes have even more firepower than MP Materials – in the free replay of last week’s broadcast right here.
But please take note that the free replay disappears after tonight, so this is the last call.
The June Consumer Price Index (CPI) came in soft
This morning brought the latest CPI report.
The month-to-month reading increased 0.3%, putting the yearly rate at 2.7%. While both readings were in line with expectations, the annual reading was the highest since February.
Core CPI, which strips out volatile food and energy prices, climbed 0.2% on the month, with the annual rate at 2.9%. That 0.2% figure was just below the 0.3% outlook, but the 2.9% yearly rate matched forecasts.
In yesterday’s Digest, we noted how this inflation report had the potential to support Federal Reserve Chairman Jerome Powell’s “wait and see” stance if it was hot, or President Trump’s “cut rates now” demands if it was cool.
Well, both sides got something to support their position.
On one hand, the numbers are slightly hotter than in recent months, and moving in the wrong direction…
On the other hand, the numbers aren’t especially high looked at in isolation, and it’s not apparent that tariffs are having a widespread impact on prices across the economy.
The most obvious price increases came from consumers goods – clothing, footwear, and some furniture and appliances. But none of the increases were enormous.
On the flip side, prices for new and used cars fell, as did hotels and airfare.
So, what’s the takeaway?
First, there will be no rate cut at the July FOMC meeting in two weeks.
With headline inflation posting the highest reading since February, and with the labor market remaining stable, Chair Powell has little reason to cut.
Futures traders agree. We can see this by looking at the CME Group’s FedWatch Tool. It shows us the probability that traders are assigning different target interest rate ranges at various dates in the future.
As I write Tuesday, the odds of the Fed doing nothing at its July meeting have climbed from yesterday’s already-lofty figure of 95.3% to 97.4%.
What’s more interesting is how today’s data has affected the probability for cuts through the end of the year.
Yesterday, traders put a 71.7% likelihood of the Fed cutting rates at least twice by the December meeting. As I write, those odds have fallen to 62.9%.
Yes, two cuts remain the expectation, but that’s a noticeable decline, and a reminder of how quickly things can change.
Overall, today’s reading is a win for this bull market. Consumer prices are up slightly, but not enough to rattle nerves or derail stocks.
The science-fiction days of robotics are over…
The days of “science-fact” are here.
So says our macro expert, Eric Fry, the analyst behind Fry’s Investment Report.
If you’re new to the Digest, Eric is probably the best investor you’ve never heard of. He’s highlighted more investments that have gone on to return 1,000%+ than anyone else we know of in our industry (41, whereas most investors are lucky to get one).
Today, he’s fishing for his next 10-bagger in the robotics sector:
Robotic technologies of various sorts are entering a new era of growth, accelerated by the impact of artificial intelligence. Robots and robotic processes of various types are already gaining widespread adoption in many industries.
According to a new report by the International Federation of Robotics, the global population of industrial robot now totals more than 4 million, and will top more than 6 million within the next three years.
This global “robot rush” is still in the early innings, but the research teams at ABB Robotics and at the International Federation of Robotics have identified a few factors that could accelerate demand for robots and fuel a long-term boom. A short list would feature…
- Onshoring of manufacturing
- Artificial intelligence advancements
- Falling barriers to adoption
- Ease of use
In past Digests, we’ve dug into the robotics tailwinds of onshoring and AI. Borrowing from Eric’s work, let’s look at “Falling barriers to adoption.”
We’re approaching a pivotal moment in robotics as industries worldwide prepare for a surge in deployments
Part of this surge comes from favorable economics. The average cost of an industrial robot has dropped from around $46,000 in 2010 to less than $11,000 projected by the end of the year.
While this has made robots more accessible, there’s still a cost barrier for smaller companies without deep pockets. But now, even that is no longer an issue.
Here’s Eric:
The business model called Robotics-as-a-Service (RaaS) removes a significant barrier to the adoption of robotics technologies. This model enables businesses to “subscribe” to robots, much like we do with a Netflix account.
These RaaS subscriptions not only supply the physical robots to customers, but also provide ongoing predictive maintenance, software upgrades, and operational guarantees.
Because this model provides both predictable costs and ongoing support, it enables businesses to utilize robotics without a significant upfront investment, making automation more accessible.
If you’d like to play this Robotics-as-a-Service trend, here are a few ideas to begin your research:
- Rockwell Automation (ROK): It’s a major player in factory automation and robotics integration, offering automation-as-a-Service platforms
- Tesla (TSLA): Elon Musk has floated the idea of Tesla’s Optimus robot being leased or deployed in a service-based model
- C3.ai (AI): It provides AI platforms for predictive maintenance, robotic workflows, and manufacturing systems. Though not a robot maker, it supports backend AI infrastructure for RaaS providers
However you choose to play it, here’s Eric with perspective on the size of this opportunity:
According to Markets Research Future, the global robotics market will quadruple between now and 2032 – from $74 billion to $287 billion. That is a robust compound annual growth rate of 18.4%.
Looking further down the road, a new Morgan Stanley report predicts the global market for humanoid robots, alone, will hit $5 trillion by 2050…
As robots become more versatile, user-friendly, and cost-effective, demand for them could skyrocket.
If you’re a Fry’s Investment Report subscriber, Eric just unveiled his top robotics stock in the July issue – click here to login and read the details.
Eric calls it a “rare and timely opportunity” – a company with cyclical tailwinds in semiconductor testing and a fast-growing robotics division gaining real-world momentum. His back-of-the-envelope math on earnings, valuation, and growth points to potential gains north of 300%.
Not a subscriber? Click here to learn how to join.
Eric puts it plainly:
Robots are here… and soon they will be everywhere.
We couldn’t agree more – which is why now’s the time to give your portfolio exposure to the future of robotics.
But don’t overlook the disruptive impact of what’s coming
Before we wrap up, I want to share with you one final aspect of the robotics trend from Eric’s issue – labor force disruption.
Here in the Digest, I’ve been profiling the risk of mass layoffs due to AI/robotics for many months. Let’s look at one corner of the economy ripe for disruption that Eric spotlighted in his latest issue of Investment Report.
From Eric:
Once machines can drive a truck across the country, what’s stopping them from delivering your mail? Stocking grocery shelves? Repairing roads? Cleaning buildings? Managing inventory?
This isn’t some far-off scenario. It’s already happening.
Aurora Innovation Inc. (AUR), for example, has launched a freight service that completed the first-ever autonomous truck route on public roads without a safety driver.
So, what happens when some 3.5 million truck drivers suddenly find themselves out of work?
Truck driving is the most common job in 29 states and is one of the best-paying jobs for people with high school diplomas. The median trucker makes $57,000 per year, and the most experienced ones can make six figures.
Where do these workers go once autonomous trucks begin taking over long-haul routes?
Disclaimer: I own Aurora stock – and for many of the reasons Eric highlighted in his issue. If the “robotics replacing humans” trend continues as it appears destined to do, Aurora and similar leading robotics plays have lifechanging investment return potential.
But forgetting investing and returning to the labor force issue, let’s examine the subsequent tipping dominos…
What happens to the trucking-adjacent jobs if companies like Aurora are successful?
Back to Eric:
Consider the other 5.2 million workers who operate the truck stops, diners, motels, and other services the trucking industry requires.
All of a sudden, we have a terrible labor surplus problem that’s been years in the making.
Let’s revisit Eric’s bottom line from above…
Robots are here… and soon they will be everywhere.
Make sure your portfolio is ready.
Have a good evening,
Jeff Remsburg
