Tuesday May 20, 2025 - Important update on trade deals
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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 May 20th edition of the Best Stocks Now show with professional money manager Bill Gunderson, president of Gunderson Capital Management. And I'm not here with Barry Kite, our chartered financial analyst today. He is here in the hotel. We are here in Cleveland broadcasting live from the Marriott in Warrensville Heights, Oregon.

Beautiful area of this part of America. And right now we've got a downdraft taking place in the market, but not too bad. The Dow's down 50 points right now.

which puts it at 42,741. The NASDAQ's down 100. Little weakness in NVIDIA today and in the AI stocks. The NASDAQ's at 19,114. The S&P is down 30 basis points. That's 18 points to 5,945, not too far from 6,000.

Meanwhile, gold is up today about, let's see, 40 basis points. The last time I looked, gold is up, yes, 40 basis points. You've got oil at $62.33 right now. Not too good for the oil patch and the oil stocks. Not a good place to be. The 10-year's at 4.51 this morning. It's up three basis points. So welcome to...

Today's Best Stocks Now show with professional money manager Bill Gunderson, president of Gunderson Capital Management. And I am flying solo today, but Barry is here and he's meeting with some folks right now and probably be joining us on tomorrow's show. But anyways, we've got a little bit of a downdraft taking place in the market today.

There's not a lot of news. We've got some companies that have reported earnings this morning. We have some updates on the trade front, which has several fronts. I mean, it is a battle with several fronts. I mean, that range from Japan to Korea to the European Union to India and other areas around the world.

as Trump looking for a fairer playing field out there in the world trade. Yesterday we had a decent day in the market. I thought with the downgrade of the U.S. debt by Moody's, that happened on Friday after the close of the market. It looked like we were going to have a pretty rough day in the markets yesterday, judging by the futures on Sunday night. And then actually, you know what? The market opened up. Pretty soon it was even.

And by the end of the day, I thought we had a pretty good day in the market yesterday. Gold had a really good day. It was up 1.55%. Bitcoin closing in on an all-time high up around that 106,000 level. You've got the S&P back near 6,000. You've got the Dow back above 42,000 again. We were down around 37,000, 36,000 there for a while.

And you've got the NASDAQ closing in on 20,000 once again. So there you go. We had a quick and pretty nasty. I mean, we were down 20% at one point in time there on the S&P 500. From the time President Trump first declared the tariffs on Canada and Mexico to the bottom of

When the S&P hit 4,800, and that's the day after that I wrote my article on the markets saying tariffs are going to work, the market's going to come storming back. Well, have the tariffs worked or not? You know what? The jury's still out on that. There's still a lot of those. But the market seems to have gotten used to everything. As I watched all these earnings reports come in over the last probably five, six weeks,

I didn't see a whole lot of companies really warning that much about the impacts of the tariffs on their businesses. And I even saw today that Home Depot, which reported earnings, and we'll get to that in a little bit, they're going to not raise any of their prices, even though Chinese products made in China are,

We'll have a 30% tariff. I guess at the end of the day, you know, how much of the stuff that you buy from Home Depot is actually built in China?

Obviously, it can't be that much if Home Depot is turning around and saying, you know, we're not going to be raising our prices. And, you know, look, most of the stuff I buy, fertilizer, you know, begonias, different types of plants and whatnot for my garden. I guess a lot of that stuff is right here from the United States. But it would seem like when you get into the tools area,

A lot of that stuff's got to be made in China. So anyways, that's where we sit right now. We had a bunch of the Fed governors talking yesterday. Oh, my gosh, one right after another. And we're going to have several more today. And I would say that the common theme that ran through all of their speeches, and it's not necessarily a bad thing,

But for an economist, for a Fed governor, the word uncertainty is not – it's like a bad word in the stock market. And they don't like having this uncertainty while things are worked out, even though things may end up a whole lot better than they were before.

In between the start of those actions and the final product, there's a lot of uncertainty. And the markets don't like uncertainty. And I would say that the consensus that I'm hearing now out there on the street from the different Fed governors and from the different economists, et cetera, et cetera, is don't count on a rate cut until late this year, maybe one.

like September, October-ish, somewhere in there. That's what they're mentioning. And I think they're probably queuing off of when do they think that some of these trade agreements will be inked and signed and in the books and over and behind us. And we're going to give a little update on some of the progress or lack thereof on some of the bigger trade deals. In the meanwhile...

You've got countries and central banks all over the world that are cutting interest rates. And I guess, I mean, our Fed looks at what Trump is doing with the tariffs and says, you know, we're just not going to cut rates until we have more certainty about

out there. And, you know, it doesn't seem at this point, after listening to all those companies that I, you know, read their earnings reports, it didn't seem like that many of them really mentioned tariffs cutting into earnings or being inflationary. Yes, they are inflationary if the majority of the products that we buy are now going to have a 30% tax on them on top of what we're paying, but that doesn't seem to be the case.

And it seems like, at least as of now, it will have a minimal impact. But having said that, we had Scott Bessett on one of the Sunday shows talking about the current state of the trade negotiations between a lot of companies. And I think he was just warning. I don't think he meant that the tariffs are going to go back up, the rates are going to go back up. But he did say that.

And the way the news paints this is he blindsides the market. You know what? They're in the midst of negotiations. And part of those negotiations is we're going to take them back up, China, to 130 where they were at before.

before we lowered them to 30. Actually, they were at 145. We lowered them by 115 points down to 30. And he did say in one of the Sunday shows, he says, look, we're not going to hesitate to take them back up if the other countries don't act in good faith

And that also is kind of spooking the markets here that, you know, none of this stuff is set in stone. But China cuts their key interest rate not by a lot. They did it by a tenth of a point in a push for growth, okay? The Reserve Bank of Australia, they cut their interest rates again by 25 points. Now, they're down at 3.85%.

Our 10-year right now is over 4.5. That's the highest it's been in quite some time. We had a move there that took it under 4 for a while. We hit 3.98% for a few days, and now we are back at 4.53%. But we've got another country cutting rates again.

And that's Australia. We've had the Bank of England cut rates several times while our Fed has done nothing. I still say we're behind the curve.

And we've had the EU cut rates many times. They're charging tariffs, okay? Central Bank, Fed governors, they charge tariffs. And now we're charging tariffs on their stuff, and you refuse to cut rates. But that's the way it is. The Fed is the Fed. The Fed usually errs on the cautious side.

When we come back, what are the hottest deals out there, trade negotiations with who? And when can we see something inked and final here? What's the next one coming down the line? This is Bill Gunnarsson. It's the Best Stocks Now show. What are you feeling now?

And welcome back here to the second quarter of the Best Docs Now show with professional money manager Bill Gunderson, president of Gunderson Capital Management, a nationwide fee-based only firm. And yes, we are here in the Cleveland area.

in a meeting with folks and I'll be teaching a workshop tonight if you're in the area at 7 p.m. We are in the Warrensville Heights area, a very pretty part of America. Well, Trump is working on a lot of deals and his administration working on a lot of deals concurrently, right? At the same time, all over the place. He had a two-hour phone call with Putin yesterday saying,

Nothing really coming from it. You know, there's not a lot of leverage there to be had with Putin. He's winning. He's beating Ukraine pretty badly. Why should he back off, I guess, is Putin's stance on the whole thing. What is in it for him? He's going to keep going forward, I guess, until he reaches what his goals are, whatever they may be.

In the meantime, I saw that Finland is going to start sending weapons to the Ukrainian side, and I hope that doesn't open up some kind of a wider war. I hope Putin doesn't point any kind of weapons at Finland for stepping forward. It's a very, very tricky situation over there.

in Europe between Putin and Ukraine and no progress as far as I can see being made. Now let's not forget that Putin has a little bit to do with Iran nuclear their ambitions which they obviously do not need nuclear energy plants are sitting on one of the biggest piles of oil in the world and

And they want to keep enriching uranium. And that is the sticking point. There doesn't seem to be any advance made. Kind of a breakdown in the talks. That seems to be a no-go for them to stop enriching the uranium. So we don't have much going in the right direction there. Would it eventually lead to...

taking out their uranium-enriching plants through military action. Well, we do wave that club over their head. In the meantime, oil is kind of caught in the middle. But oil is at a little over $62 per barrel. The oil stocks are not a good place to be right now. We have very, very little exposure in the energy sector, the oil and gas sector.

other than Texas Pacific Land and another company that is very much like it. But as far as the commodity oil, the commodity natural gas, the companies that get it out of the ground, et cetera, that's just not a very good sector in the market right now. Gold, on the other hand, has probably been the very best hedge against the trade negotiations today.

the tariffs, the trade talk, it has really proven itself to be the best hedge against that. And we continue to own one of our larger gold holdings that we've had for a while due to this current environment that we're in. And, you know, the environment that you're in has a lot to do with the way you have your money allocated.

I don't want to have my money allocated to dead sectors right now. And there's a lot of sectors in the market that just aren't very good places to be right now. We mentioned oil and gas. Interest rate sensitive sectors aren't very good places to be. For instance, the building sector, the home building sector, building materials, etc.,

Not a very good place to be. And there's other areas of the market because of the tariffs. I mean, the basic materials, the steel, the heavy industrials, heavy cyclicals, not a very good place to be. And you won't find very little exposure in those areas in our current portfolios. But gold had a good day yesterday. You have the Moody's downgrade, which is good for gold, obviously.

And you also had the Besant comments over the weekend warning that we're not going to take off the table of taking those tariffs right back up. Now, gold had a bad week. What's bad for gold? Trade deals. When China and the U.S. agreed to take their tariffs down each by 115%,

Gold had a bad week, but now the rhetoric has turned up this week again, and comments by Besson over the weekend, gold is in play once again. India, probably second only to China. I mean, the three big ones are China, the Eurozone, and India. Canada and Mexico are very important too. There's actually five out there that need to get resolved.

India is actively negotiating a three-phase trade agreement with the U.S. and expects to finalize an interim agreement before July. Well, that's coming up pretty quickly. When Trump's reciprocal tariffs are set to take effect. Now, India charges us some heavy tariffs if we want to sell in their country. And whatever we buy from India...

Trump is going to take the tariffs on their goods up to what they charge us in July, unless something is done between now and then. And he's got his biggest guns on this one. He's got, obviously, J.D. Vance is there negotiating, Howard Lutnick, our Commerce Secretary, and our main U.S. Trade Representative, Jameson Greer,

It's very hard to sell in India, is what they say. And this is what Trump says. And they are offering us a deal where basically they're willing to literally charge us no tariffs. Well, they might not buy anything. You know, you still have to buy something. But we're looking at, and India is looking at, several of our items that they might step forward and purchase.

including industrial and agricultural goods, some farm products, and addressing some non-tariff barriers such as quality control requirements. So anyways, that's moving along. Japan reaffirms its call for the U.S. to scrap tariffs. They're also in some high-level meetings with the U.S.,

And they're looking maybe to buy some of our stuff. They might include increased imports of the U.S. corn and soy and technical cooperation and shipbuilding and revision to inspection standards for imports, etc., etc., etc.,

But Tokyo is in no rush right now to rush into a deal, but those are trade talks that are actively going on. And then you have Taiwan also. Taiwan downplays the trade tensions with the U.S., calling it friction between friends. Well, yes, even friends sometimes have to work differences out, right? And...

That's the way Taiwan looks at their current differences with the U.S. that will get resolved eventually. Foxconn commits to $1.5 billion to India as Apple diversifies from China. And I think Tim Cook basically told Trump, no, we're not going to build in the U.S. We're going to go ahead with our plans to build in India. And that's what they're doing. We'll be right back. 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. Call out the instigator because there's something there.

We've got to get together.

In China, it's $24,000, okay? And if you look at the per capita income in India, both countries have a lot of poverty, but India is even worse than China. You have $10,000 is their per capita income in India. So even though there's more people in India, China obviously is the bigger country.

market as it relates to spending, spending power. UnitedHealthcare was up 8% yesterday, finally, after I don't know how many days in a row of down. Wow, that thing has just been hammered. It's been cut in half, really, in the last six or seven weeks. And the reason I bring that up is it is a member of the Dow Group.

And maybe it hit a bottom there here recently and is bouncing. And I would just say that, you know, this is another style of investing, one that I'm not enamored with, but it is being a contrarian investor.

You know, buying when blood is running in the streets at an individual company or in the market. And it hasn't been any worse. I've never seen it this bad for UnitedHealthcare. And, in fact, it's right up there with some of the worst runs, bad runs of bad events that I've seen in a long time with an individual company. UnitedHealthcare was already kind of struggling with their profitability,

Their reputation, their image of turning down claims, etc. And then, of course, you had the murder. And then you had several earnings reports that were very subpar, warnings from the company.

And then the CEO resigns, and then if that's not enough, then the Department of Justice, the company announced that the Department of Justice is doing an investigation into the company. So anyways, that would be one of the contrary and definitely would step in if that's your style of investing. I kind of like to buy stocks that are flourishing myself.

I'm not really one that likes to buy companies that are just getting hammered like UnitedHealthcare has been getting hammered. Because, you know, a lot of times UnitedHealthcare has got a P.E. of 11 right now, 11. It's trading at about 12, 11 times next year's earnings. So it's definitely...

on an absolute and a relative basis a very cheap stock, but I found that a lot of times when there's trouble, there's more trouble underneath. You know, you could look back on Boeing maybe two or three years ago when you thought, well, you know, it can't get any worse at Boeing, and it did.

And then, of course, at some point in time, Boeing turned itself around and started to get going in the right direction. Then you've got Intel, where they never really did turn things around. So that deep value contrarian style of investing is not really my cup of tea today.

But if it's your cup of tea, I mean, UnitedHealthcare would be a classic case of a stock that is down and out and out of favor and trading at very low valuation ratios right now.

Okay, we've got, you know, the robo-taxi thing. Now California is expanding robo-taxi service by Waymo. That's Google, Alphabet's Waymo, is expanding its robo-taxi service in the San Francisco Bay Area, including now most of San Jose. I've heard from one listener in that area who wrote me an email and talked about his experience

his excursion in a robo-taxi in the San Francisco Bay Area, which, you know, look, it's scary enough with all the hills, the cable cars coming down those steep hills and whatnot. You would think robo-taxi would do a lot better on a flat surface like Phoenix or something like that.

But they're expanding it. California is very much pro. That's the California Public Utilities Commission, the CPUC, which is kind of an infamous commission over there in California. Waymo is in partnership with Uber, and they started offering robo-taxi rides this week to customers in Atlanta who had signed up for a wait list.

The service is fully scheduled to launch in Atlanta this summer. And I happened to catch an interview, I think it was on Bloomberg, with Kathy Wood, someone I don't listen to a lot on what she has to say. She's had some really wild predictions that came nowhere recently.

Not ever coming true and never will, but she was predicting that Tesla will own the robo. Of course, in her usual style of hyperbole, she says that Tesla will own the robo taxi market in America within the next, I don't know, five years or something like that. And that's why she's got that huge price target on Tesla.

But, you know, I'm not really seeing Tesla make too many inroads here yet. Right now, Waymo provides over 250,000 paid trips each week across Phoenix, San Francisco, Los Angeles, and Austin. What's that going to do to our so-called, you know, all these workers that deliver for DoorDash and have Lyft drivers or something?

Google drivers, now all of a sudden there will be no drivers in those cars. That's going to be a big structural change at some point in time. So anyways, I did notice too that Pony was having a good day today. Pony is the one that we own in that space. It's a Chinese company, P-O-N-Y, which was down and out there for a while. It's up 4.3%, but it's come back.

Pony got down to $4 a share in late April, and now it hit $20 a couple weeks ago. So that's a five-bagger off of the low. Pony is a $6.2 billion company, and, of course, they're addressing some of the big cities in China with their service. This is a surprise. European wind stocks gain after Trump U-turn on $5 billion project.

That's off of New York City, the Empire Wind Project, which Trump shut down. Interior Secretary Burgum told Equinor, which is a Norwegian energy company, to halt construction, saying the Biden administration had rushed the product's approval without sufficient analysis.

Of course, it's in the ocean. And, you know, you've got whales traveling the ocean. You've got underwater sea life. You've got shellfish, all kinds of different things to take into account. But Trump did give them the green light. And that's Equinor, the company that's doing the actual construction is Orsted. And that stock is up quite a bit today, as Trump does, A-10.

Complete reversal on the wind project off of New York. CoreWeave continues to add to post-earnings gains. You know, I would just say this about CoreWeave. They're closely related to Palantir. And when CoreWeave came public a few months ago at $40 per share, I wanted to watch it a little bit to see how it was behaving.

Palantir is kind of the operating system, and I would say CoreWeave is more in the cloud platform that supports that operating system and a lot of the artificial intelligence data, etc. CoreWeave is a very important part of this whole supply chain of information and artificial intelligence. And I did step in and bought CoreWeave in our Ultra Growth portfolio last

Especially when I saw the sales growth. The sales growth over the last four weeks, four quarters, 934% plus 544% plus 420%. Just phenomenal sales growth. They're still losing money. They're expected to lose $1.10 per share this year and then $0.13 next year. At some point, I think they'll have to go positive on the trajectory that they're on.

But CoreWeave has been a huge winner for us in that ultra-growth portfolio, and it's tacking on another 3.6%. Today, as it hits an all-time high and becomes a $43 billion company, CRWV, it's in our ultra-growth portfolio. We'll be right back. ♪♪♪

And welcome back to the final segment of today's Best Stocks Now show. And there are some stocks here in the news today. We are still, believe it or not, getting a few earnings reports coming in.

But we are 90%, 92% of the way through this current earnings season. There's also some news on a couple of stocks. One is a nuclear stock, ASPI. They are developing a new and improved kind of fuel uranium enrichment process.

for nuclear reactors. I think Bill Gates is a backer of ASPI. It was up earlier this morning. It jumped on announced multiple agreements with TerraPower,

involving financial support of their future H-A-L-E-U supply. Now that stands for something, and I know the U stands for uranium. Well, no, there it is. High-assay, low-enriched uranium. All right, so there you go. That's what they're producing is the fuel. They also signed two supply deals, one with TerraPower's Natrium Project,

and a 10-year contract to deliver up to 150 metric tons from 2028 to 2037. But herein lies the problem with the nuke sector. There will not be a product there from 20 until 2028. That's two, three years from now on this high-assay, low-enriched uranium product.

which will be a lot, it'll come to market a lot faster than the normal way they have of enriching uranium. Please don't let Iran get a hold of this technology. But, you know, this nuclear, it's just a ways out there. SMR had that big move last week, but in the news announcement it said, you know, we've got some customers lined up, but it won't be until 2030, five years out.

until we actually have a product. And, you know, ASPI was up this morning, and now it's down. It was up 13%. Now it's down 9%. So it's volatile, to say the least, investing in those nuclear stocks. You've got to realize what you're getting into when you invest in them. Okay, one of the biggest companies in the world, in America, reporting earnings today, the pride of Atlanta, Home Depot.

Which was a great idea. When did the Home Depot go public? Wow, I can't go back that far on my charts. I'm going to say the late 90s, obviously, was a great idea. Wiped out a lot of small mom and pop businesses along the way. That's the downside of it all.

I can still remember going to small hardware stores on Saturday to find that piece I needed and having a guy go through all his bins, you know, trying to find that piece. Now you just go online. Even Amazon has probably cut into Home Depot's business quite a bit. Home Depot got as low as about $17, $16 a share back in 2008, 2009.

That was the last recession we had. Earnings have been going up every year since then for the S&P and for Home Depot, and the stock has gone from 16 to 380 since that point in time. That was one of the great buying opportunities of all time. I would call it March of 2009 when the market finally bottomed after the financial crisis.

I wrote a newsletter at that point in time with the headline saying, a new bull market is being born. And really and truly, that bull market has been intact. I'm going to show that at my workshop tonight. I'm going to show a chart of earnings over the years. S&P 500, I mean, that's what the market takes its cues from, especially the S&P 500. It doesn't take its cue from,

From headlines in the news, it doesn't take its cue from the Fed. It takes its cue from earnings from these S&P 500 companies. And if you look at aggregate earnings of the S&P 500 since 2009, they've had an upwards trajectory. And what else has had an upwards trajectory?

the S&P 500 because indexes follow earnings now the problem I have with Home Depot and you probably already know what it's going what I'm going to say here is it's the growth has slowed down to a crawl even though their sales were up nine percent year-over-year which isn't bad okay nine percent that's high single digits

their earnings were down 3%. There's no earnings growth anymore. The earnings growth has come to a complete standstill. And in fact, Home Depot is expected to make $15.24 this year in earnings. What did they make last year? $15.25, down a penny. So without that earnings growth and stocks following earnings growth,

Doesn't it just stand to reason from a logical point of view that when the earnings stand still, the stock stands still? And that's pretty much what it's done. The stock is in one big giant sideways trend along with the trend of earnings. Now from that $15.24 that they're expected to make this year, next year they show $14.99, a loss of 2%.

It's hard for me to buy. I don't know. I've never had a client that said they didn't want their account to grow over time.

And they're really not happy with just a 1% or 2% dividend. They want to see growth. They want to see growth in their principal. And I find that I can't figure out how a company that doesn't have any growth in earnings anymore, the only thing they can do is cut expenses to fatten up their bottom line. And I'm sure they've cut about as much as they can possibly cut. You just don't have anywhere else for Home Depot to go anymore.

except in new communities, et cetera, and that's why we don't own it in any of our portfolios, although this is probably one of the most widely held stocks in America. Every Wall Street firm probably owns it in their client portfolios, along with many other stocks like this that just aren't growing anymore. The one thing I will say about Home Depot in the last few seconds here that I have is they're not going to pass on the tariffs anymore.

on any of the things that go up in price to their customers. Walmart, on the other hand, didn't really listen to Trump saying, you know, why don't you eat the tariffs? I don't think they were on board with that. But Home Depot apparently is. Maybe Walmart buys a lot more from China than Home Depot does. Well, we're out of time. To get four weeks of the newsletter, the live trades, and access to the app, go to GundersenCapital.com.

To set up an appointment with us if you're full of soggy stocks with no earnings growth, give us a call at 855-611-BEST.

Set up an appointment with us, 855-611-BEST. And if you're in the Cleveland area, come by Warrensville, Ohio Marriott tonight, 7 p.m. 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.

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