Friday May 30, 2025 - Trade battle with China escalates.
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He's been seen on CNBC, the Fox News Channel, and the Fox Business Channel. His articles can be found on MarketWatch, Seeking Alpha, TheStreet.com, and many other places. He's the author of the weekly Best Stocks Now newsletter and the inventor of the Best Stocks Now app. He's president of Gundersen Capital Management. Here is professional money manager Bill Gundersen.

Good morning and welcome to the Friday, May 30th edition of the Best Docs Now show. This is Barry Kite, planner and analyst here at Gunderson Capital Management. Bill should be popping in here any moment. I had to switch over to the backup system. There we go, Bill.

You got me? Yes, sir. Okay. Yeah, you never know what you're going to start the day with here, but we've got issues in China once again, and that's impacting the markets here.

This morning, I heard an interview last night with Besant, and he said that the China talks are stalled. And we'll get to that in a bit. And in the meantime, you've got the market not liking that news. But it's not down too much. You've got the Dow. We've got a kind of a mixed market going on here today.

Once I get the markets up here, the Dow is basically flat. Yeah, Dow is basically flat, down a whopping two points this morning. We've got the S&P down a quarter percent, down 14 points to 58.97%. NASDAQ down 98 points, about a half a percent, still above that 19,000 number at 19,077%.

And oil down a percent at $60 a barrel. And we've got gold actually down 0.8% to $3,291. And Bitcoin slightly higher, up about $97 at $105,755. Oh, there you go. So welcome to today's Best Stocks Now show with professional money manager Bill Gunderson, president of Gunderson Capital Management in Chicago.

We seem to be having a little technical difficulty there on the line, so I'm going to start the show at least from my cell phone, and we'll see how we do going forward here. But, you know, I was watching last night, Beth was on with Britt Baer being interviewed on the Fox News channel,

And, you know, he's a straight shooter. I think he's got a cool head, and I think he's probably a pretty smart guy to have in our government right now. And, you know, they talked about the various trade negotiations taking place. And when they got to China, he gulped just a little bit and swallowed hard and said, you know, things seem to be stalled right now in China.

So, you know, as far as I know, where we left off was we're at 30 percent tariff on China, which was down from 145. And they were down to a 15 percent tariff on us, down from a much higher one. And it seems to be you got Trump this morning saying that China has violated the trade agreement.

And I'm thinking that maybe that's because of the rare earth. They don't seem to be loosening up on that to rare earth. That's the only thing I could find that would be a violation of that trade agreement. So that puts the markets back in, you know, some kind of a funk until we get a little bit more clarity about,

But right now there's a lot of uncertainty surrounding that China thing. Now let's pick up where we left off yesterday. The Dow was up 117 yesterday, basically gave up all its early gains yesterday.

With the trade confusion, you had a panel, the New York Court, New York Trade Court, which I've never heard of. A lot of people hadn't until yesterday. No, three judges up there that have decided for the rest of us Americans and for the world what the U.S. can and cannot do in the way of tariffs. And so they put a hold on those tariffs.

And then, of course, later in the day, an appeals court put their ruling on hold for now. And then Besson last night said that the trade talks with China were stalled. And now this morning you've got Trump saying that China has already violated the trade agreement that they had. They had a 90-day trade agreement. And, of course, that sent the market soaring a couple of weeks ago.

I wouldn't say we're back to square one, but I would say that there's a big cloud hanging over all of this. Well, we've got some good news. We've got some good news on Europe earlier in the week, and so then you get a little bit of bad news on the China side. But overall, right, at least I guess of the two biggest other economic regions besides us,

You know, you've got some positive on one side and negative on the other. Yes, and I would say that, I mean, China, their economy was crippled badly when they decided to agree to a 90-day extension and drop those tariffs.

I mean, their trade had almost come to a standstill at that point, and they were really hurting. So I would say at this point that we have a lot of leverage. Trump is also saying the same thing. He said he could see how bad China was with their economy, and that was part of the deal to cut those tariffs for 90 days.

But I don't know. Something has paused everything, and China's not coming through with something. And I'm guessing it's the rare earth minerals, which seems to be the card that they hold. You know, the bottom line is we need China. China builds and manufactures a lot of stuff.

That is not going to come back to America. You know, I mean, model trains and whatever else. It's just not coming back to America. It's not profitable for our factories to be manufacturing a lot of the stuff that they're able to manufacture. They have cheaper labor and are able to do things a lot cheaper than we are. So we need them. They need us.

And the two sides, I think, will get together. Now, one other thing that I would add that I got from Besant's interview last night is that it's going to come down to, it sounds like Xi, President Xi of China, wants to talk to Trump directly. And that's basically what he said last night. Besant, that was the first time we've heard of that.

that the two of them, it's going to take the two of them to get together in the next few weeks,

face-to-face or Zoom-to-Zoom. I don't know how that's going to happen, but that's going to be the shoe that's got to drop here to get this thing moving forward again. Have they met in the past? I'm trying to remember in the first... It's been a long time. Yeah, I thought they had met in person at least once. Yes, and they have not met since Trump started his second term. They've talked, apparently.

And that Besson continues to emphasize that they have a good relationship with each other, although I kind of wonder if they're just showing a good face. But the two sides are going to talk here eventually, probably sooner rather than later. The inflation gauge, that's got to be good news. Speaking about meeting face-to-face, did you see who Trump met with in the White House yesterday, Barry? Yes.

Our friend Jerome Powell. Yeah, that was an interesting meeting, I would imagine. A little frosty, you think? I don't know. Yes, and, you know, I mean, I have to say we're the only central bank around the world that's not cutting interest rates right now. I mean, inflation is down at their target price. There's no question about that.

It came in, you know, as expected, and that's the PCE index, which the Fed watches. It only rose 0.1% in April as expected. I think the core came in at 2.5%, and I don't think we've seen that number in over a year or so.

Well, it just seems to me that the Fed is being a bit stubborn here, and I think they've had their feathers ruffled.

by uh trump's rhetoric maybe he was nice spoke nice with uh powell yesterday i don't think that's gonna change powell's stance at all but i i can't i can't figure out why they can't at least do a quarter point rate hike and the rest of the world is doing it and it seems like inflation is under control and progress is being made on the tariffs i gotta say that

that the Fed is anti-tariff and they would like to see Trump back down from those tariffs. I think that's what they're looking at more than anything. More good news, the trade deficit narrowed in April. Now, we said it would.

because of all that front running that you saw. But that's pretty big. Even with the front running, we were expecting a $143 billion trade deficit. You know, we had 162 in March. That was cut in half. The trade deficit came in at just $87.6 billion, which is also going to help our GDP numbers.

which came in at 0.1 yesterday. So that's very encouraging to see that big narrowing of the trade deficit in April. We'll be right back. ♪ music playing ♪

What are you feeling?

In terms of the market, still not too much out there. We've got basically the Dow still essentially flat up in the green now, up 19 points. We've got the S&P 500 down just under...

uh basically eight basis points down five nasdaq uh down uh 53 here 0.28 percent okay i'm back everything else is red here too we got it back here we are yes it's a freaky friday all right you know here's the deal we're talking about there's two sides to this trade dispute there's china on the one which they seem to be the number one target in all of this i mean the the

The fentanyl issue is a very big issue. And that really is why I think one of the main reasons that Trump came down so hard on China. And then, of course, the other things that they do to tilt the balance in their favor. But China really depends on us, and we depend on them. I mean, like I said, there's just a lot of things that they manufacture that aren't coming back to America.

And we rely on those things. There's a lot of businesses out there that rely on goods that come from China that they can't get anywhere else, basically, because they're not manufactured anywhere else. So we do need each other. The Chinese stocks, the Chinese market is down 1.3% right now.

So that's, you know, it's hurting them. It's hurting us. And who knows, maybe something will happen over the weekend. But Trump obviously accusing China of violating the trade agreement has totally surprised, it has totally violated its agreement with us. He says so much for being Mr. Nice Guy.

Well, that was, you know, they had that temporary truce earlier this month with both countries agreeing to roll back tariff hikes till mid-August. And even so, we moved ahead with tech restrictions on China, while Beijing has yet to significantly ease curbs on critical mineral exports. So that's where it stands right now. And, of course, it makes things very hard on China.

Okay, well, let's move on here. With the state of the bond market, I like to give you an update every once in a while when I see a bond offering. You think it's a good year? Would you invest in good year bonds?

Barry, I think I would feel okay. It's not a best stock now. Yield hurdles lately, I mean, they're still attractive, especially comparative to three years ago. So you didn't even buy a bond for three years. And that's one of the good sides of the Fed keeping rates high.

People that live off of fixed income bonds, CDs, etc., are still getting a good return on their money. Pretty good. But I see Goodyear Tire and Rubber, 6 and 5 eighths. So if you've had it and you just want to park your money for the next five years, that's an option you have is buy Goodyear.

Find 8 to 10 good bonds like this. I think Goodyear would be okay. You're taking on a little more risk with the Goodyear than you are with a Microsoft, for instance. And you can see that you're paying a premium against the Treasury. Treasury's at 4.45. You're getting 6.625 on a Goodyear bond. Okay, how about a stock that's up 2,700% this week? Why?

Because they're initiating an Ethereum buying strategy. So here we go. Okay, the model has been set by Michael Saylor at MicroStrategy, who basically his business model now is buying Bitcoin, borrowing money, buying Bitcoin. They do have some kind of software business, too. I'm not quite sure what it is.

And then you had GameStop join in. Nothing else has worked at GameStop. You know what? Next it will be AMC Theaters. Watch. AMC Theaters is going to only take Bitcoin for popcorn, and they're going to invest in Bitcoin and everything like that. But here's a little stock, S-B-E-T. Surprising that it has bet in its name. S-Bet. Oh, good. It's up another 28% today. Wow.

It's called Sharp Link. I've never even heard of the stock. They're out of Minnesota. The pride of Minneapolis, well, it's doing better than UnitedHealthcare. This stock has lost nothing but money since being public.

It started the week out at about $3 a share. Barry, today it's $99.20 per share. From $3 to $99.39. S-B-E-T, it looks like a major short squeeze. I don't know who got them going on that, but all of a sudden...

They were an online performance marketing company, and now they buy Ethereum. That's their business model. Okay, NuScale. Let's talk NuScale. It's been a good week for the nuclear stocks for the most part. We still need nuclear. It doesn't matter all of this trade stuff going back and forth. It sounds to me like judging by NVIDIA's earnings report the day before yesterday,

that AI is still well in play. That was another issue that came up with Besant. He said, he gave a number, Barry, to the, he said that 1% of our GDP is coming from AI right now. Wow. And the other thing he said is, you know, there's been a lot of criticism on the big beautiful bill or the big ugly bill, however you look at it. It didn't make Musk happy.

But, you know, he was talking, on the one hand, they're striving hard to cut expenses where they can. And on the other hand, they're trying to increase revenue. And you increase revenue, obviously, by greasing the skids of the economy and removing a lot of the obstacles in the way of small businesses. So if they can do that, if they can increase revenue on one hand, and he said in that bill...

He thinks they can get another percent of GDP out of easing up on the restrictions and making business a lot easier to conduct here in the United States. And, you know, if we could get then a quarter of a point rate drop, maybe 50 basis points here over the next, between now and the end of the year.

You know, we could really help our GDP. That helps more money come in. That's the sales part of the income statement of the United States of America. Well, and that's what happened, actually, with the last Trump tax cut. Yes. Essentially, the Congressional Budget Office missed scoring it properly, which they're known for missed scoring, but...

They essentially used a growth rate that ended up being 1% below what actually happened. And so that's where it's harder to quantify when you increase those skids, right? What's that going to look like? That's a projection. Exactly. And they're talking about no improvement on the deficit, but if you can increase sales...

limit, you know, decrease the expenses a little bit, get a rate cut. I mean, that's all going to add up. And they're not counting the tariffs we're collecting. We'll be right back. This is Bill Gunderson. Thank you for tuning in to today's Best Stocks Now, Best Inverse Funds Now show.

I put several hours of research in during the wee hours of the morning each day to bring you the very best cutting-edge stories that I can. To get two free weeks of my newsletter, go to GundersenCapital.com. To talk to us about our fee-based only money management services, call us at 855-611-BEST. Now, back to the second half of the show. Instigator, because there's something

We got to get together soon And welcome back here to the final segment Or the second half of today's Best Docs Now show I want to get into this SMR story Which is NuScale And these are the smaller nuclear reactors Okay

And they want to be the first to market with one of these smaller nuclear reactors, which can be built a lot faster and are much more flexible than the big domes that we're used to. Now, NuScale got approval way back in 2020 for a 50-megawatt reactor.

reactor design okay and now they submitted to the u.s nuclear regulatory commission on third or a couple months ago a bigger one 77 megawatts they want to uh they think that the bigger design will improve both the economics and the performance of their planned small modular reactor

Well, they turned that around very, very quickly. And NuScale's bigger reactor design has been approved by the Nuclear Regulatory Commission. And that's part of that, you know, greasing the skids of the economy, Barry, to keep it moving and to get...

regulation and environmental this and that out of the way without obviously harming the environment, but just greasing the skids, getting and moving faster. Keep business moving. Yeah, and without having to, you know, hit a period of time where you have a power crunch where, you know, prices and other things are, you know, essentially, you know,

Not being able to generate power is an impediment to growth as well. 100%, yes. So here's the good news and then there's bad news. The approval came two months earlier than expected. There's the good news. In fact, the CEO, now this is SMR, right? This is out of the Bay Area. This is one of the leading companies. Them and Oklo are probably the two leaders as far as coming up with these smaller reactors.

The CEO, John Hopkins, he has a college too, doesn't he? We now have an American technology that is near-term deployable. Okay. Adding the company could have an SMR in operation by the end of the decade. Well, that doesn't sound as encouraging as I thought. This is 2025. We're not even at the halfway point.

So like I say, you're still looking at five and a half years. And then the other part of this is if a customer moves quickly, in other words, if you buy now and want one, we think we could deliver one by the end of the decade. So that's the downside of all of this. NuScale is in talks to build small nuclear reactors with five Tier 1 hyperscalers that

that they have non-disclosure agreements with. So they have talked to companies. There are companies out there. They're not going to identify them at this point who they've talked with because of the NDAs, which are, you know, you can't disclose that. But you've got to understand that this would be a boom to have this for our hyperscalers that are building data centers needed for artificial intelligence.

So anyways, that's where things stand now. And you just have to understand, I think investing in the nuclear stocks that already have nuclear power that they are selling, such as Constellation Energy and such as Vistra right now, are probably better investments than

than going after these ones that are so out there on the frontier. In the meantime, NVIDIA and Dell are going to provide new supercomputer to the U.S. Department of Energy. The U.S. Secretary of Energy, Chris Wright, who used to be the CEO of Liberty Energy, announced a new contract with Dell to develop

The next flagship supercomputer at the National Energy Research Scientific Computer Center at the Lawrence Berkeley National Laboratory. It's due in 2026. I'll bet that thing sucks a little bit of juice. You think? Maybe the lights will go out in the Silicon Valley when they fire that baby up. Yeah.

I know at least my... A picture of the National Lampoon's Christmas vacation where he plugs in the lights and it sucks all the power out of him. At least my TV will flicker, clear out here in Charleston. Synopsis suspends sales in China to comply with U.S. export curbs. And I think that's one of the reasons why...

I thought NVIDIA's earnings were really, really good. You got a pretty muted response when all is said and done. And I think it's the issue with China that still hangs over their head. You know, is China, they want to be a part of the Chinese market. Just like China makes model train locomotives, O-Gage, HO-Gage, N-Gage, whatever the case may be, more detailed than any other locomotives built anywhere, right?

In fact, they have pretty much a corner on the market. I read that one city in China is basically where all the... But you can talk about so many other things, cities that specialize in this, that specialize in that, and those cities shut down. I mean, they're in trouble.

And, you know, in a communist country, you don't want the people getting too agitated. Idle hands turns into a protest and then into a revolt real quick. So, you know, I think that the pressure is on Xi, and I think that the pressure is on Trump. And it almost sounds to me like Besant has taken as far as he can take it.

And to get it the rest of the way, it's going to require Xi and Trump meeting. And I think probably Xi coming, I think he should come here to the U.S. I think what happened last time is I believe that Trump went there to China. But either way, you know, it's got to happen. Here you've got one of our big semiconductor companies suspending sales today.

in China to comply with the U.S. export curve. So it sounds like we're not giving on that part of the deal, you know, lifting the curve or softening the curve. And it sounds like on the other end of things...

China is not giving on the rare earth stuff. So anyways, that's where that stands. In the meantime, Germany is dreaming up another tax. They're weighing on a 10% tax on Internet giants like Google and Meta. Why? Well, I guess because they can. They're drafting a legislative proposal to impose a 10% tax on Internet giants such as Google and Meta

Because they're monopolies. That justifies another 10% tax on top of all the other taxes they already pay. Costco. We've got to talk about Costco. You know, it's interesting. Costco is getting market share from two big companies. They're getting market share from Walmart. I mean, they have ways of tracking this. And they're getting market share from Target.

And both Walmart and Target will tell you that they're losing market share to Costco. Costco does things better. They have better inventory. They have more interesting inventory. They're changing their inventory. They keep it interesting. And my problem with Costco is the price of the stock changes.

For a retailer, even though it's numero uno, them and Amazon, Costco's up 2.7% right now, even though their sales were up just 8%. It's a single-digit sales grower, but they came in with double-digit earnings growth.

And I think it's because Costco keeps things interesting. They're always changing up the inventory. They're bringing in new things, trying new things, moving things around. They're selling things that probably have higher profit margins. I don't know how much of their stuff comes from China. Probably not as much as Walmart and Target. So anyways, Costco, very good day there. But the problem is Costco's got a 58 PE ratio.

is trading at 51 times forward earnings. You are paying big time for their customer loyalty,

Their brand, you know, it's kind of like Chipotle is in the fast food industry. It's got that little extra pizzazz and loyal buyers of the stock. So you've got to pay up. It's more of a cult. It's been more of a cult stock for years, which has certainly benefited the stock for a long time.

Yeah, you know, I notice when I go to Costco, most people are just getting off the tennis court or off the golf links, you know, to shop at Costco for their weekend meal or whatever.

I see big families in there, you know, this and that. I've been in there a few too many times lately. We're hosting probably about 30 people or so this weekend. Yeah, there you go. I've been in there too many times. Yes, okay. All right. Well, anyways, they're targeting 27 new warehouses coming to a location near you in 2025 while expanding their digital initiatives. One of the great stocks of all time. We'll be right back.

And welcome back here to the final segment of today's Best Docs Now show. Well, we finally do have, I'll just mention this Lakewood Ranch, June the 17th and June the 18th.

You guys are busy down there. It's hard to even get a spot to hold a meeting or conference or...

Lakewood Ranch is just booming. It's becoming the new, you know, the... It's the new Sarasota. Yeah, and what's the villages, right? Yeah, right, exactly. Yeah, that's true. Okay, so we'll be at the Evan Hotel. I've been there before. It's okay. That's where we're going to meet with people on Tuesday and Wednesday, June 17th and June 18th during the day.

There's a limited amount of spots available, and I know we already have a bunch of people that want to meet with us again after we met with them about a month ago, six weeks ago, whatever it's been. So if you want to reserve a spot to meet with, I'll have the whole team down there in Sarasota with me.

The Cracker Jack team, give us a call. Give Edie a call at 855-611-BEST. But something I'm adding this time around, number two, number three, we're not going to be downtown. I understand the action's all moved over there to Lakewood Ranch, and I love it over there. I stayed there before. We're going to do a workshop on Tuesday night, open to the public, okay?

But, you know, again, we have a limited amount of spaces. We've got a room all set. I did a workshop in Cleveland. I had so much fun in front of that crowd. I think you can tell, Barry, how much I like getting up in front of a group of people, unscripted, unrestrained, you know, just say whatever comes to my mind because the market, it's wherever the market is at that point in time. And I try to teach people.

We had a full workshop in Cleveland, and I expect to have a full one in Lakewood Ranch. 7 p.m. Tuesday night until 8.30. We know bedtime is about 8.45 there, so I give you time to get home and brush your teeth. That's my bedtime, too, so I'm good. I'm right up there with everybody down there in Lakewood pretty much.

But we're going to have a good time. We're going to teach. I'm going to give you the exact, you know, where the market's at right now. So hot stocks, I don't know, whatever we get to during that. And that'll also be at that Evan Hotel. They got a nice little room there where I can have a screen. Give me a screen and my computer and project some charts up there and I'm in heaven. And hopefully you'll enjoy it too. But that definitely is a space-limited type of a place.

You've got to call Edie and reserve a spot at 855-611-BEST, 855-611-BEST. And we'll have some kind of a 60-second spot playing between now and then, just to remind you. But I always enjoy my trips to Lakewood Ranch. And then next on our radar, approximately four or five weeks after that, we're headed to Bloomfield Hills, Michigan.

which I'm looking forward to. I love going there, have a lot of fun there, and that's where we're at right now. Okay, Marvell Technologies. I've said this before, I'll say it again. In my mind, in today's world, as I look at the semiconductor sector,

There's semiconductor ETFs. There's semiconductor mutual funds. Fidelity has a semiconductor mutual fund, strictly limited to semiconductor stock, which would include the equipment stocks, the applied materials, the LAM researches,

the one over there in the Netherlands, ASM Lithography, etc. It would also include some of the others that make wafers, etc. You've got Intel in there, and you've got AMD. In my book, there's only one semiconductor stock right now that I would own, and that's NVIDIA, and it continues to be our biggest competitor.

holding here it is the engine driving ai along with ai itself right the uh the the the the search engine marvell is kind of a distant second or i would say maybe uh broadcom would be a distant second marvell would be a distant third i like marvell better than amd i don't like amd at all

But Marvell, my problem with Marvell, it just seems to get no love. I mean, they had a pretty good quarter. Their sales were up 63%. Their earnings were up 158%. And the stock is down 4.5% because it was not good enough. Now, I have it in my value portfolio because I think if I'm going to own a stock in the relative value portfolio, Marvell's probably the best value.

And it just got cheaper a little bit here today. But it just does not have the pizzazz and the high-speed stuff that NVIDIA has. Dell, they want to be an AI player. They're very late to the game. Dell has done okay off its low. It's done very well. It got down to 66 in April. It's back to 113 now.

I should have probably picked that one up in the relative value portfolio back in that time frame, but there were better stocks than that, I felt, at that time. And now at this price, even with a P.E. ratio of 14.00,

It's hard for me to like Dell. Their growth is very slow. Their sales growth was 5%. 5%. It's a single-digit grower. And you know how I feel about single-digit growers. You're going to get single-digit returns more than likely from single-digit growers. Well, we're not going to get to the rest of them here today. There were a few others. You had Ulta that reported. You had Gap Stores. And you had American Eagle. Zscaler.com.

And there was one other one, UiPath. We're out of time for this week. I have already got kind of in my mind which way I want to take the newsletter this week. You can get the whole enchilada, the live alerts whenever I buy or sell anything in any of the portfolios.

You get the newsletter and access to the app for four weeks. It's got to be the best deal out there. You don't have to give us a credit card. I'm not going to start dinging your credit card on one minute after midnight 30 days after. We don't do that here.

You can just try it out, kick the tires, see what I'm all about, we're all about here at Gunterson Capital. If you want to reserve a spot at Lakewood Ranch, June the 17th, June the 18th at the Evan Hotel.

you better grab one before they're all gone. 855-611-BEST. That's for an appointment with us on Tuesday or Wednesday in person with the team. And if you'd like to come to the workshop on Tuesday night, the 17th at the Evan Hotel, 855-611-BEST. Have a great day, everybody.

Thank you.

This show is not a solicitation to buy or sell any securities. Bill Gunderson or clients of Gunderson Capital Management may have long or short positions in stocks mentioned during the show. Past performance is not indicative of future performance. Gunderson Capital Management is a fee-based registered investment advisory firm. All accounts are held at Charles Schwab. Schwab is a member of SIPC and FINRA.