Tuesday Apr. 1, 2025 - A guide for Q2 2025
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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.

And welcome to the Tuesday, the April Fool's edition of the Best Docs Now show on this first day of the second quarter of 2025. I think we'll have a better quarter than we had in the first quarter of 2025 as we had a little bit of a turmoil in the first quarter. Well, we've opened up today kind of mixed here.

We've got the Dow down 339 points. And, of course, this is the day before a liberation day. We'll find out what that's all about. Market is definitely nervous about that. The NASDAQ is down 55 points right now. That's 38 basis points. The NASDAQ was down about 11%, 10% to 11% during the first quarter of this year.

The S&P 500 is down 0.5%. Right now it's down 26 points. The Russell 2000 down 47 basis points. Meanwhile, the bond market continues to rally. How much of that is the Trump administration and how much is that the flight to safety out of stocks into bonds? We're clear down to 4.18% this morning. Gold is hitting a new high today at 3,166.

And Bitcoin, a little bit of risk on there. It's up $549 right now to $83,324. So welcome to today's Best Stocks Now show with professional money manager Bill Gunderson, president of Gunderson Capital Management. And I'm here with Jeff Webster, my vice president.

who just got back with me from Sarasota, where we had a very nice time. Barry's taking a few days off this week. And welcome to a new quarter, Q2 2025. I think, personally, that it will be a better quarter than Q1 2025, wherein we've had a lot happen, Jeff. If you think about it, I mean...

Trump hit the ground running. I think that's fair to say. In the first quarter of 2025, I mean, he came in on January the 20th. The Doge team hit the ground running, maybe sprinting. We've had a lot of upheaval. I think tariff talk has probably done more damage or nervousness or unrest than

or just not knowing what the outcome will be than any other thing in the market. I can't say anything's really happened to the earnings expectations for the market, but I would say there's quite a bit of unknowns to work out right now. I would also say there's a lot of relationships with other countries,

that have been damaged for now and need repairing and need working out. And I think that's all going to happen here in more clarity in the second quarter of this year. Now, yesterday, we ended up having a pretty good day after all. I mean, it was kind of a rough start to the market with Liberation Day looming out there tomorrow.

But, you know, from the bottom of the market yesterday, which it was pretty much reeling in the morning, the Dow finished up 418 points yesterday. The NASDAQ came back almost to even. It was down 24 points. And the Russell 2000 or the S&P 500 yesterday was actually up 31 points by the end of the day.

I also send out some, I do that on a regular basis. I show all my clients that follow me and my subscribers who subscribe to my service exactly where those levels are, especially the key levels, the support levels in the markets. And yesterday, we went below those key support levels, and by the end of the day, we were back to them.

And I also show you where the next support levels are, which is kind of the more likely scenario right now is to go down to those next level of support levels, which are just below where we are right now. Gold hit another new all-time high yesterday. That's a big story. Interest rates continue to come down. The bond market continues to rally. That's a good story.

Rates are down to 4.18%. Trump did make the comments, and it is his intention, along with his Treasury Secretary Bessent, to drive down rates with or without the Fed. They've been successful at doing that, but how much, again, has that come at the expense of the stock market?

because with the volatility in the market, that has made the bond market on the receiving end flight to safety money. And you could say the same thing for gold. That's a big flight to safety out of gold.

U.S. equities into somewhere where they can earn some money. And we also saw the European markets benefit in the first quarter of 2025, and we saw the Chinese markets benefit in the first quarter of 2025. Deep Seek was a big story in the first quarter of this year. Deep Seek kind of upended the AI market.

The domestic AI stocks, even though I see OpenAI had another big round of funding, total success. The market cap on OpenAI, which is not publicly traded, is now clear up to $300 billion. This could be one of the biggest IPOs of all time. So, you know, there's still a lot of interest in the domestic AI market and stocks, but

It's been a very lackluster quarter for the likes of Microsoft, NVIDIA, Google, other big tech, Tesla, etc. But anyways, we had a pretty good rally at the end of the day yesterday to come back and actually finish in the green with the S&P 500 and the Dow up 400 points. The big story of the day yesterday, do we have Jeff with us?

I'm here. Okay, I wasn't sure. Good morning to everyone out there. Yeah, I wasn't sure because he was having a little bit of trouble getting on, dialing in. But okay, Jeff, I just want to bring to your attention, you brought it to my attention, I didn't realize it.

But, you know, I watch all the news channels. You know, the MLB Network is my number one go-to this time of year. But I watch CNN. I watch MSNBC. I watch Fox. I watch Newsmax. I watch a few others, the BBC. I watch I-24, which is the Israel channel, because there's important news coming out of all of them.

And I kind of like, I follow Bloomberg, CNBC. I kind of like to see the different coverage and then come to my own conclusion to where I think the actual truth lies. But the fact of the matter, Newsmax, which has been advertising their company going public, you could have bought in at the pre-IPO price. I thought about doing it.

But, you know, I just get so busy. That wouldn't have been a bad deal. Do you know that it went up 723% yesterday? It opened up at $10. That was the public offering price, okay? You could not have bought it at $10 yesterday. I mean, it opened way higher than that $10 price. And by the end of the day, the stock, which I've got to add to my app now, NMAX,

Oh, let's see where that thing closed yesterday. It's up over 100% right now, Bill, today. Oh, my gosh. It's trading at $170 or so a share right now. That is just unbelievable. That just shows you the following that they have.

This all of a sudden is a $171 stock after going public at 10. This is the hottest IPO that I've seen in a long, long time. And I listened to the CEO of Newsback last night, Ruddy,

Ruddy's his name. He was just a journalist for some company for a long time. And he saw a need for someone to take on Fox, who he felt wasn't... And I agree with him. I mean, you can't freeze somebody out. There was a time when Fox were going to freeze Trump out.

And Ruddy didn't think that was right. Whether you like him or not, you can't freeze him out. He's probably the biggest factor in the world today, whether you like the guy or not. And Ruddy took the approach that we're not going to freeze anybody out. We're not going to freeze out Putin. We're not going to freeze out Hamas. We're not going to freeze out Musk. We're going to cover the news.

Guess where it's headquartered? This is becoming the capital of the United States. No longer is it Washington, D.C. Boca Raton, Florida, just down the coast there from Trumpville. Newsmax, unbelievable story there. Up 723% on its first day of trading. Right now it's up another 83%. Congratulations. Chris Ruddy is a newly minted billionaire.

We'll be right back talking tariff talk. ♪♪♪

And welcome back here to the second quarter of today's Best Stocks Now show. Well, I think you can safely say that the biggest problem with the stock market in the first quarter of 2025 was undoubtedly the tariff talk. The market doesn't like unknowns.

And that's a big unknown. And, you know, different people have different opinions on the tariffs. I personally am a little bit leery of the tariffs. I heard Steve Moore last night. I think he was on Newsmax. He was in the first Trump administration as an economic advisor. He doesn't like the tariffs.

And then, of course, you go to a Peter Navarro and, of course, President Trump himself. He thinks that they're a leverage tool. And any businessman, I suppose, if you're trying to make a deal,

Jeff, it's good to have leverage, I suppose, right? Absolutely. I don't care if it's baseball. I don't care if it's trading for Juan Soto to the New York Mets. They have leverage with their Jeff Cohen as the owner, right? And, of course, the Dodgers have a lot of leverage with the money behind the Dodgers. And then you take a little team like Milwaukee Brewers or whatever, they don't have as much leverage. But anyways, he looks at it.

as a form of leverage without pointing missiles at the country. That's basically how Trump views it. And he also views, as he crosses and crisscrosses America and sees, you know, dilapidated towns that were once flourishing, whether it was steel mills or auto plants or whatever the case may be,

You know, he yearns for the good old days, all right? And, I mean, I think that's where Trump is coming from. And he sees the money, you know, you've got to realize that when you've got trade deficits with other countries, you're enriching other countries at your own expense. I mean, trillions and trillions of dollars have left America.

And our wealth to go overseas. Now, the other side of that is you and I, Jeff, can go to Home Depot. We can go to Walmart. And we can buy goods cheaply at a competitive price. That's kept inflation down for a long, long time. And there are certain things that we're just not efficient at. And it's just not worth the time.

to manufacture. But I think we've gone too far and let too many things go overseas. There's too much outsourcing taking place. You were in the software industry. How much outsourcing has gone to India, for instance, Jeff? Yeah, there's a large amount that has gone to India, a lot of customer support down to Latin America.

And again, I think people are, you know, companies looking for less expensive alternatives to, you know, those types of offerings. But, you know, I think President Trump is looking to, you know, live up to his campaign promises of, you know, let's make our economy great again. Let's bring...

work back to the U S worker. Let's, let's help, you know, our economy flourish and, uh,

It means taking a tough stance with some of these other countries to say, hey, we need to see a little bit more quid pro quo here and a little bit more balance of trade between our respective countries. And it's upsetting people a little bit, and the market certainly. And I think over time it will all work out. You know, there's always pain when you make a major change to something, right?

I have a nephew that was laid off that worked for USAID, right? He worked on a project in Africa. I think it was a clean water. I'm not exactly sure what it was, but he had experience over there in Africa. He lived there for two years of his life.

So, you know, I mean, you can balance all these arguments and argue and debate until the cows come home. But at the end of the day, will we end up being a stronger company, a better country? Will earnings for the S&P 500 go up? One would think so, but then again...

A lot of this outsourcing has helped the bottom line at General Motors. It's helped the bottom line at some of these techs. So we're going to see where it all comes out. I don't think he's going to ruin the U.S. economy and put us into a depression with his efforts. I think he really wants the best for the country. But in the meantime, we're going through this unknown period of time where

And it does sound like he is going to pretty much put a tariff on every country out there as a starting point. That's going to be the starting point. And I think some will be heavier than others, depending on how much of a trade deficit that we have with them. Of course, China would be number one. Canada, we have a big trade deficit with. Mexico, we have a big trade deficit, meaning they're strong.

We're buying much more of their goods than they're buying of our goods, which affects our gross domestic product, our GDP, our wealth. Our gross domestic product is a big piece of our wealth. Well, one thing we talked about yesterday, Bill, was the impact of U.S. manufacturing debt tax.

You know, they're manufacturing here, which is a good thing. However, they're bringing in components. And yesterday evening when Trump had Kid Rock in the Oval Office, he was talking about –

A lot of these companies that fall into that situation placed huge orders with these overseas suppliers. I saw that. So I was thinking, okay, the commission checks for those sales guys for those overseas suppliers was probably looking pretty nice for their first quarter as they were jamming their –

their sales funnels because it's going to dry up pretty quick for them if yeah well we don't see some reciprocity there that's right that's the other issue is i mean we can't ramp up all of a sudden and fill in the gaps you know uh for those parts so the auto industry is the one that's pushing big time i see dan ives has come out today he's a good analyst with uh wedbush

And he's saying that it's just like a nightmare because these cars are cars. What is an American-made car? Is there such a thing as a purely 100% American-made car? That's pretty hard to find. And tariffs, he believes, are a backbreaker for the global auto industry, right?

And he thinks it will likely drive up the price of a typical car by $5,000 to $10,000 right away. Right away. So anyways, that's why the market is nervous, obviously. How many sectors? And I think the money has flowed in the market to areas that are kind of immune areas.

An insurance company, for instance, like Progressive or Travelers or Gallagher, they're outside of this tariff stuff that's going on, and I think a lot of money has flowed and will continue to flow. But you've got to believe that, I mean, I don't care if it's Procter & Gamble, Johnson & Johnson, on down the line, everybody has got a supply chain that includes overseas goods.

that are going to be subject to tariffs. How about rare earth under the ocean? That's another flying stock today, along with Newsmax. We'll get to that when we come 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 GuntersonCapital.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. The Instigator Because there's something

We've got to get together sooner or later.

Opening up permits for deep-sea mining. Well, we'll see how that goes over. Deep-sea drilling is not exactly a controversial subject. What about deep-sea mining now for rare earth minerals? TMC is the stock there. It's not doing much, but it has been kind of lively here recently. Glencore is another one.

I think Glencore is out of Australia or UK, maybe UK. They're asking for deep sea mining permits for rare earth metals. Okay, S&P 500 down about 5% in the first quarter of this year. NASDAQ down about 10% to 11%, I think about closer to 11%.

This was the first down quarter for the S&P 500 since 2023, and March was the worst month since December of 2022. That's when the rate hikes started to hit.

The biggest losers in the first quarter of 2025 in the S&P 500. Surprisingly, one that we backed out of but we had huge gains in, it just all of a sudden the bottom dropped out of Decker's Outdoor. It was down 45% in the first quarter of this year. Who knows, maybe it will show up in the value list, the relative value list. I can't believe that Hoka Shoes dropped off the bottom.

map like that. But I told somebody, I think everybody's working from home now in their socks and not wearing any shoes whatsoever. On semiconductor, down 35% was the number two biggest losers. Tesla, down 35%. Arista, down 30%. Another one we backed out of with some very large profits earlier in the year. Delta, down 28%.

And now get this, Jeff, on the other hand, here's your biggest winners. Con Edison, a utility, up 23.9. AT&T, the stock I love to hate, was up 24.2. So you could say, well, see, Gunderson, you were wrong. The soggy stocks do much better than the gross. Well, they did for this last quarter, but look over the last quarter.

Three years, five years, 10 years, 15 years, and 25 years, and you'll see how poorly they've performed. Gallagher was up 21.6. We own Gallagher. That's an insurance stock. Brown and Brown, another insurance stock, up 21.9. How about Philip Morris?

You know what? I look at the charts yesterday. It was one of the 500-plus, 600, 700-maybe-plus charts that I looked at. Philip Morris is breaking out to a new all-time high at 31.9%. That's how much it was up in the first quarter of this year. That is absolutely just a flight to safety. Do you feel comfortable at this stage in the world and the backlash against cigarette smoking to buy either Philip Morris...

or Altria, whose main product is tobacco products. All right? I have a hard time doing that. But investors plowed money into Philip Morris in the first quarter of this year. It was the second biggest winner in the S&P, up 31.9%. Newmont Mining was number three, up 29. Now, this was a very unusual quarter. In accounting terms...

You know, I was a chief financial officer at a large advertising company for many years before I got into this business. We call those anomalies. We call those non-recurring events anomalies.

Jeff, you mentioned a non-recurring event, although I'm sure the companies won't record that on the books as a non-recurring event. There's going to be a large jump in international sales for the automakers, right? And the companies on the other end that are receiving these sales, that's probably not going to recur quarter after quarter after quarter. We call those extraordinary items sales.

Because we back them out of an income statement if you're studying the profitability of a company because it's not going to recur. In other words, you don't have to put that into forward-looking pro forma income statements. I've had things like that over the years.

You put that underneath your EBITDA. This is non-recurring, but it did happen this year, and of course you've had some of those here in the first quarter of this year. CVS was the biggest winner of 51%. The company that got kicked out, no, it was Walgreens that got kicked out of the Dow. CVS has a terrible, terrible track record over the last decade.

but you saw some value investors swoop in and buy some of these stocks. So you had an anomaly. You had an extraordinary event.

Can you base the next 10 years of your investing on this past quarter, Jeff? I guess that's the point I'm making. Who knows? Yeah, who knows? Should we now be buying, should we be loading up on tobacco stocks? Should we be loading up on CVS? I think the answer to that is no. I think it was a one-off.

Should we be loading up on AT&T? No, there's no growth there whatsoever. Okay, the NASDAQ 100 had its worst quarter in three years. Okay, that's how significant that quarter was. It began the quarter with the highest valuation. So it just makes sense that it would also have

The biggest sell-off. That's where the hot money was sitting. That's where the 100% profits were. They weren't in AT&T. They weren't in Philip Morris. You're 70%, 80%, 200%. We had a 600% profit in NVIDIA. That's where they were sitting. And when things get nervous, that's going to become a source of funds rather quickly. Okay?

And so now you've got your biggest winners in the NASDAQ. This is definitely a one-off. Exelon, that's a utility up 22.4%. PDD, which is Chinese, up 22%. That's another point I'd like to make.

Yes, the European stocks and the Chinese stocks outperformed the U.S. stocks in the first quarter of this year. But, Jeff, tomorrow they're going to face a whole new landscape.

Europe is going to have tariffs placed on products that they depend on for their economy. Canada is going to have tariffs placed on lumber and natural resources and oil. They can't deal with that. They have to come to the negotiating table. They can fight back and put tariffs, but we don't rely on Canada. There's really nothing in Canada that we absolutely must have that we can't get anywhere else.

I saw a story yesterday that U.S. investors poured $10.6 billion in the first quarter into European ETFs. Tim Seymour, he calls it mega. You know, make Europe great again. But now, what's going to happen? Yeah, what's going to happen now? Because they're going to wake up to a whole new world tomorrow.

And I think it's going to favor the U.S. stocks in the second half of 2025. Okay, your other – and China's going to wake up to a whole new world. Now, I will say this about China. You have to take it company by company. For instance, BYDDF sells to Europe. They don't sell to America. We don't let Chinese cars in here. They're kind of insulated cars.

from the tariff so you got to take it one at a time but i would not be buying any european food companies technology companies auto part companies aerospace companies because uh they're auto part maker they're going to have a whole new world when they wake up tomorrow

I would not be heavily invested in Europe. In fact, I'd be looking at EPV, which is the inverse of Europe, and I already have that on my radar every day. Okay, other winners in the NASDAQ. How about Mondelez? All right, Mondelez is Kraft cheese. American cheese slices. That was your leader in the NASDAQ in the first. It's an anomaly.

Gilead up 21%. Now T-Mobile we own. We had one of the winners, the only one that we own of the top 10 in the NASDAQ. We do own T-Mobile in our premier growth portfolio. So it was mostly utilities, China, and very low PE non-growth companies that led the NASDAQ. That's not going to repeat in the second quarter. Don't take that model and say, here's what I'm going to buy now.

Russell 2000, small caps, horrible quarter, down 10% in the first quarter of this year. I still do not like small caps at all. The only ones that would be ones that are insulated, that are totally, hey, we make all of our stuff here in the U.S. I've got to believe that maybe Decker's, I bet those Hoka's are made offshore. You can look that up.

Maybe that's what's hurting them so badly is all of a sudden there's going to be a big terrorist. But then again, I'm sure Nike makes plenty and they're getting clobbered too. So much more to take into account in 2025 with the new administration. We'll be right back. ♪♪♪

And welcome back here to the final segment of today's Best Docs Now show. I'm finding it very interesting to see the target prices for the S&P 500 being moved around here recently. And I have definitely noticed a pattern.

The Wall Street firms that I know particularly don't like Trump, especially your European Wall Street firms like UBS, etc., Barclays, they are lowering their target prices by a lot more.

than the firms that might be either neutral or maybe favor Trump a little bit. So even target prices for the S&P 500, Jeff, have become political. Can you believe it? Politics is everywhere in our life. Everywhere in our life. It's even in soda pop right now. It's everywhere. Everywhere we go.

politics has really become the divisive issue it's kind of too bad too really i mean we have seen a more divided world a more divided country more divided families more divided communities than ever in my lifetime i mean uh yeah i'm in south carolina here i know the civil war started here

At one time, I'm sure it was pretty divided then, but we're probably as divided as ever. And what are we divided over? It's politics. And it's just too bad that, gosh, I remember a time when we all got along and were tolerant of each other's beliefs and came together as a country. I think 9-11 was a good example. But now we're divided. Even target prices are divided. So here's a guy. All right, let's see who this is.

This is a strategist. I've got to find out. He says that we're going to have a big beat this quarter. This is James Demert, investment officer at Main Street Research, which is a pretty big firm. I mean, they're not Goldman Sachs. They're not UBS. But he says he's got a 7,050 S&P 500 target price. That's in Seeking Alpha today. And Seeking Alpha only...

You know, use the stories from big, big people, not just anybody, okay? The firm's 7,050-year-end target price extends from its expectations of a re-ignition of bullish factors such as deregulation and tax cut expectations. You've got to take that into account, okay? Tax cuts are bullish for the economy. It puts more money in.

But then again, inflation, which has been going out the back door and leaving, is knocking on the front door in the way of the tariffs. And deregulation, that is also bullish. Tax cuts are bullish. So I would just say that this person who comes up with this $7,050 target price, which is a little on the high end,

The consensus is more around 6,800 right now. I'm a little lower than that. I'm down around 6,500 right now. This guy is at 7,050. Now let's go to UBS, who I believe is headquartered in Switzerland. I don't think they're friends of Donald Trump. I don't think Europe is friends of Donald Trump.

They're revising their target price, which isn't bad, to $6,400 down from $6,600. So now you've got a range of a Trump hater at $6,400 and obviously someone who supports Trump at $7,000. Okay, so that's pretty good. Look, I'll take that.

If we can get back to 6,400 to 7,000 this year, that's not a bad deal. Now, here comes the third one, Goldman Sachs, who I'm going to guess is not real Trump-friendly.

They haven't been in the past, and I don't know why. They haven't been conservative-friendly. They tend to go a little bit more in the left direction. Goldman Sachs cuts their S&P 500 target again on the risk of higher tariffs. They go to 5,900. So look at that. Wow. Goldman Sachs at 5,900. They're not fans of Trump.

UBS, not fans of Trump, but I think are being a little bit more honest and a little bit more realistic based on the earnings estimates that are out there. Politics can't change the earnings estimates. I guess you can if you're an analyst.

But, you know, you've got so many analysts covering those companies, I'm sure there's a good balance to get a fair number. And I've seen very little change in those earnings estimates for this year, next year, and 2027, despite the politics behind almost everything, even baseball, Jeff.

Your Los Angeles Dodgers, they're boycotting opening day a group of them because they've had Union 76 as an advertiser ever since I can remember. Since I was a little boy. Absolutely. I remember Jerry, not Jerry Doggett, Vin Scully. Vin Scully and Jerry Doggett. Farmer John. Union 76. Yeah, Farmer John.

Yeah. Those were the players. And now you know what they're going. Yeah, go ahead. I was going to say, going back to the S&P bill, so Scandinavian Gundersen would be more aligned with the projection that the Swiss UBS are coming up with. Yes, that's where I am. I'm at 6,500. Okay.

Maybe $6,400, $6,500 by the end of the year. I take politics out of the equation and I look at the numbers. I was just going to say one other issue of politics is a bunch of the Dodger players are mad because they accepted an invitation to go to the White House and Mookie Betts is the spokesman explaining why. I mean, it's just gotten to a ridiculous level.

of the politics involved in almost every aspect. NFL football,

NCAA basketball, you know, MLB, definitely political. The airlines definitely have become political, woke, whatever you want to call it. I heard an interesting interview by Tucker Carlson, another guy I listened to. He interviewed a woman pilot for Delta or one of the big airlines, and she was talking about how the airlines have gone downhill recently.

because of the woke policy. So it's just everywhere. Well, my target price is $6,500. Goldman Sachs is $5,900. UBS is $6,400. And Main Street Capital is $7,000. Take your pick. But at the end of the day...

There's two numbers that will determine it. That will be the multiple, which is expanding, by the way, with falling interest rates. That's bullish for the market, number one. And number two, we're going to start earnings season next week.

Hello? That will determine. Some of the banks and insurance companies coming out. Yep. All right. Well, we're out of time for today. Happy Liberation Day tomorrow. If you want to talk to us, 855-611-BEST. If you want a four-week trial, GundersonCapital.com. GundersonCapital.com. 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.