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Table of Contents
🔥 Here’s What’s Happening Now
I should write a doom and gloom newsletter more often. Friday’s sell off did feel like more than a one day wonder, but that’s why we don’t try to time the market.
Seems like we are back in a bad news (slowing economy) is good news (Fed cutting rates) phase. I would suppose this is fine as long as the bad news isn’t that bad.
SPY is now back above the 20 day EMA and is poised to try to retake the 10 day MA. As I always say, trade based on what you see, not what you think. This market is still in an uptrend until proven otherwise.
Keep your head on a swivel, you can explain away the weak jobs number as it was mostly the government sector, not sure how you explain away PCE though.
🧠 Strategic Signal: China’s Critical Minerals Chokehold = Economic Warfare
We did a podcast on rare earths a few weeks ago…..
I saw this article in the WSJ on Monday….
This article makes one thing clear: Beijing is weaponizing control of rare earths and critical minerals, not just as leverage in trade negotiations but as real-time throttles on Western defense readiness.
This is not a theoretical threat — delays are already rippling through drone parts, night vision sensors, and missile systems.
Top-Level Takeaways:
China controls ~90% of rare earth production globally
Export controls now discriminate between civilian and defense end use
Pricing for key minerals (e.g., samarium) is up 5x–60x due to artificial scarcity
China now demands product images and supply chain disclosures before allowing exports — effectively making military supply chains nonfunctional
🛡️ U.S. Defense Supply Chain: Strategic Vulnerability
Key materials affected:
Rare earths (neodymium, samarium, dysprosium) → permanent magnets
Germanium → infrared optics, missile seekers
Antimony → hardening for munitions
Gallium → radar, night vision, satellite communications
Systems impacted:
F-35 fighter jets (magnets, sensors)
Drones & UAVs (motors, targeting)
Night vision optics
Missile guidance systems
Advanced defense semiconductors
The Pentagon reportedly tracks 80,000+ parts that rely on Chinese-controlled materials. The exposure is real, deep, and systemic.
🔥 Implications for U.S. Markets
🟢 1. Massive U.S. Onshoring Catalyst
The Pentagon’s investment in MP Materials ($MP) — $400M stake with options to increase — is a clear signal of U.S. willingness to intervene directly in commodity supply chains.
Other public/private partnerships and grants are coming:
Department of Defense’s Critical Minerals Forum
Incentives for alternative refining, smelting, and extraction
Strategic stockpiling, defense contractor upstream integration
Investors should view this as a 10+ year capital formation cycle in critical materials, magnets, and domestic mining tech.
🟢 2. U.S. Public Companies That Win
✅ Miners & Materials Processors
Ticker | Company | Theme |
|---|---|---|
$MP | MP Materials | Largest U.S. rare earth miner (DoD-backed) |
$UAMY | U.S. Antimony Corp | Only North American antimony supplier (high risk, high reward) |
$LTHM | Livent | Lithium, but increasingly positioned in metals tech |
$ALB | Albemarle | Broader critical mineral exposure |
$PLL | Piedmont Lithium | U.S. extraction credibility growing |
$TMRC | Texas Mineral Resources | Microcap, direct rare earths story |
$REEMF | Rare Element Resources | Pre-revenue, but strategic relevance growing |
✅ Defense & Supply Chain Integrators
Ticker | Company | Why It Matters |
|---|---|---|
$LMT | Lockheed Martin | F-35 program, praised MP deal |
$RTX | RTX Corp | Night vision, missile guidance |
$LHX | L3Harris | Electronic warfare systems heavily exposed |
$DRS | Leonardo DRS | Critical Germanium user (on safety stock) |
✅ Next-Gen Refiners & Recycling
Company | Note |
|---|---|
Phoenix Tailings (private) | Rare-earth metals refining in MA |
USA Rare Earth (private, Oklahoma) | Targeting magnet supply chain |
Vulcan Elements (private, NC) | U.S. startup aligned with drone suppliers |
Takeaway : These names don’t just benefit from rare earth tailwinds — they are increasingly defense-critical national security plays.
🔴 3. Chinese ADRs at Risk
⚠️ Targets of U.S. decoupling, export bans, or supply chain exits
Ticker | Company | Risk Factor |
|---|---|---|
$GURE | Gulf Resources | Chinese bromine/chemical producer — likely watched |
$BYDDY | BYD Company | EVs dependent on rare earths — faces both import and export pressure |
$XPEV / $LI | XPeng, Li Auto | EV platforms potentially hit by magnet restrictions |
Many of these may become non-investable in Western portfolios if restrictions tighten.
🎯 Tactical Recommendations
✅ Near-Term:
Buy $MP, LMT, UAMY on dips — structural beneficiaries
Monitor defense contractors’ 10-K language for raw material mentions
Model backlog fragility for smaller contractors with long lead time gear (UAVs, optics)
Add thematic exposure to critical minerals via options and swaps where liquidity allows
⚠️ Watch for:
Pullbacks in rare earth names on “deal news” with China — those are buy-the-dip setups
Capitol Hill legislation focused on critical minerals and magnets (bills likely coming 2H25)
U.S.-Japan or U.S.-Australia strategic mineral deals
🧠 Final Strategic View
China isn’t just using tariffs — it’s squeezing magnetism, visibility, and firepower at the atomic level.
This is economic warfare by commodity control, and the West is scrambling to respond.
This creates a rare intersection of:
National security alpha
Resource scarcity tailwinds
DoD-backed capital flows
Defensive growth themes with secular duration
This is a multiyear, thematic trade.
I love the asymmetric nature of pre merger SPACs, and I like it even more when SPACs hit on a major theme. There is no better theme than the President’s inner circle, so keep an eye on this one….
🚨 SPACs are back! 🚨
With rates stabilizing and risk appetite returning, special purpose acquisition companies are front and center once again.
Gain exposure with SPCX: The SPAC and New Issue ETF.
$SPCX
spcxetf.com
For a Prospectus and other important— #Matthew Tuttle (#@TuttleCapital)
2:10 PM • May 28, 2025
📈 Stock Corner
Last night’s big earnings name was PLTR, below the radar was BWX Technologies (BWXT)….
It’s already at all time highs and will have a potential buyable gap up on the open.
I am a big believer that the future of AI energy production has to include nuclear, but nuclear is a ways away and small companies like SMR and OKLO don’t have a lot else going for them. In contrast, BWTX is a “real” business. From GPT…..
BWX Technologies (BWXT) is the backbone of America’s nuclear naval fleet and a rising star in the commercialization of advanced nuclear power. As the sole supplier of nuclear reactors and fuel for U.S. Navy submarines and aircraft carriers, BWXT offers unmatched government revenue stability with long-cycle contracts. But the real upside is in its expansion into small modular reactors (SMRs), space-based nuclear propulsion, and medical isotopes—critical themes in defense, energy security, and AI-powered data center cooling, all of which require dense, dispatchable power. With geopolitical tensions rising and Western governments racing to onshore critical infrastructure, BWXT is a pure-play on nuclear resurgence, defense tailwinds, and next-gen energy tech. This is a stock to own for both stability and optionality.
📬 In Case You Missed It
🤝 Before You Go Some Ways I Can Help
ETFs: The Antidote to Wall Street
Inside HEAT: Our Monthly Live Call on What Wall Street Doesn’t Want You To Know
Financial HEAT Podcast https://www.youtube.com/@TuttleCap Freedom from the Wall Street Hypocrisy
Tuttle Wealth Management: Your Wealth Unshackled
Advanced HEAT Insights: Matt’s Inner Circle, Your Financial Edge
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