Uranium futures were down not only significantly but massively in the first day of trading after explosions took place at the nuclear facility Fukushima in Okuma, Japan following the earthquake late last week. Global X Uranium ETF (NYSEARCA:URA) is down nearly 20% and is trading at an all-time low while Market Vectors Uranium+Nuclear Energy ETF (NYSEARCA:NLR) is down over 13%. Uranium producers such as Cameco (NYSE:CCJ) and Uranium Resources Inc are down 12-25% for the day. It appears that this is more than just a knee-jerk reaction and it seems likely that the market believes that there will be serious reconsideration and regulatory action regarding the process of mining uranium and the usage of nuclear energy as thousands have died already from the incident last week.
The stock market has been scared away by uranium more than once in the past and after today’s trading activity, it seems certain that the market is most definitely not sold on uranium as a safe investment due to the certainty of new regulations that will come from governments and may set back progress of nuclear power.
I do believe however that this incident is a great buying opportunity for the patient long term investor though it is clear that there will be continued bearishness towards nuclear energy from Wall St. for some time.
Listen in on a podcast between myself and Co-Founder of Wall Street For Main Street, LLC Jason Burack as we discuss the supply/macro fundamentals of the uranium and nuclear energy market.