The Cro Capital Report

Happy Monday! Hope you had a great Fourth of July weekend. We paused last Friday’s edition for the holiday, so today we’re bringing you a special Monday release of The Cro Capital Report. This one-off mid-year outlook shares our personal views on how the second half of 2025 might play out. We’ve been closely tracking the data, policy shifts, and macro trends, and wanted to share how we’re thinking about what’s ahead. We’ll be back to our regular biweekly Friday schedule next week. Thanks for reading and being part of the Cro Capital community.

Portfolio Performance Update

As of Thursday’s close, the Cro Capital portfolio is up +7.09% YTD, slightly ahead of the S&P 500’s +7% gain. The S&P has closed the gap in recent weeks, partly due to underperformance from some of our defensive and alternative positions (SPXS, IYK, IEUR, and VNQ) during the latest rally. With a sizable cash position, we’re actively evaluating our next high-conviction stock or sector opportunity to drive alpha.

Figure 1: Markets at a Glance Month-over-month (June 4th–July 3rd, 2025)

• S&P 500: $6,279.35 — ↑ 5.73%

• VIX (Volatility Index): 17.48 — ↓ 5.41%

• 10-Year Treasury Yield: 4.348% — ↓ 4.7 bps ( ↓ 0.047%)

• U.S. Dollar Index: $96.99 — ↓ 1.77%

• Crude Oil: $65.15/barrel — ↑ 2.81%

• Copper: $5.06 — ↑ 2.69%

• Gold: $3,346.5 — ↑ 0.85%

• Uranium: $77.40 — ↑ 8.40%

Equities

Equities are nearing all-time highs as softening geopolitical tensions and the growing likelihood of rate cuts in the second half of the year continue to support market sentiment. At Cro Capital, we anticipate two rate cuts before year-end, a view we believe is largely priced into current valuations.

While some global risks have eased, new concerns are emerging. We're closely watching the July 9th tariff deadline, as the U.S. has given several countries a 90-day window to renegotiate. Many deals are lowering tariffs from the initial "Liberation Day" levels, but they still introduce new price increases. This could reignite inflation, keeping pressure on the Fed to hold rates higher, and potentially slow consumer spending, increasing the risk of a short-term market correction.

Given this backdrop, we’re cautious about broad-based exposure to the S&P 500 and are instead focused on high-conviction, sector-specific opportunities. We believe select areas of the market still offer meaningful upside and will be positioning our portfolio accordingly to generate alpha in a more nuanced and volatile environment.

Fixed Income

With the stock market near all-time highs and interest rate cuts likely in the second half of the year, we expect some interesting shifts in the bond market. If the Fed starts cutting rates, short-term bonds will likely benefit first. But we’re not sold on long-term bonds just yet, especially with inflation still a threat. Tariffs set to kick in around July 9th could push prices higher again, and if inflation heats back up, the Fed may not be able to cut rates as much as people hope.

Corporate bond spreads are still very tight relative to treasuries, meaning investors aren't asking for much extra yield to take on the risk associated with corporate bonds. That shows confidence, but it also leaves little room for error. If inflation surprises or consumer spending slows, bond markets could take a hit.

Overall, we think the bond market is in a strange spot, balancing rate-cut hopes with inflation risks. We’ll be watching how it plays out but are not actively investing in fixed income in our current strategy.

Energy

Historically, building nuclear power plants in the United States takes approximately 10 years. However, many projects face significant delays and cost overruns. For example, Vogtle Units 3 & 4 in Georgia came online in mid-2023 after more than 15 years of construction and exceeded the original budget by approximately $16 billion.

According to the U.S. Department of Energy, the national goal is to expand nuclear capacity from 100 GW to 400 GW by 2050, with 10 large-scale reactors under construction and fully designed by 2030. In light of these ambitious targets, Cro Capital is encouraged by the newly announced partnership between Palantir and The Nuclear Company to deploy AI-assisted infrastructure for large nuclear reactor construction.

Without AI-driven systems, we believe the U.S. is unlikely to meet its 2030 nuclear goals. Palantir’s Nuclear Operating System (NOS) tackles key challenges with real-time data, dynamic scheduling, predictive analytics, and automated compliance, while streamlining supply chains to cut delays and costs. Our confidence in Palantir is backed by its success with Airbus, where its Foundry platform integrated 1,200 suppliers and boosted A350 production by 33%.

With this latest partnership, we are optimistic that the U.S. can begin to deploy nuclear reactors at a pace comparable to China, where construction averages under 7 years and in some cases, as little as 5.

If the U.S. adds 300 GW of nuclear capacity by 2050, that implies 12 GW per year, requiring roughly 2,268 tonnes of uranium annually. With current global demand at 67,000 tonnes, this represents a ~3.4% increase. However, with Palantir’s NOS accelerating reactor deployment, much of this demand would shift forward into the late 2020s, creating near-term supply pressure. While we see giving  a mid-year outlook for energy as premature, we see the potential for a 5–10% increase in uranium spot prices by 2030, even before the full buildout unfolds.

Thanks for reading our mid-year outlook! We’re looking forward to tracking the second half of the year together. As always, please share any feedback with us by responding to this email or emailing us at [email protected]. See you next Friday.

— The Cro Capital Team

*The information provided in The Cro Capital Report is for informational and educational purposes only and should not be construed as investment advice, a recommendation, or an offer to buy or sell any securities. The views expressed are those of Cro Capital and are subject to change at any time without notice. While we strive to ensure accuracy, we make no representations or warranties as to the completeness or reliability of the content. Always do your own research and consult with a licensed financial advisor before making any investment decisions. Investing involves risk, including the potential loss of principal.