A Mid-Year Market Check-Up
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This is Barron's Live. Each week, we bring you live conversations from our newsrooms about what's moving the market right now. On this podcast, we take you inside those conversations, the stories, the ideas, and the stocks to watch so you can invest smarter. Now, let's dial in.

Hello everyone and welcome to Barron's Live, our weekly webcast and podcast. I'm Lauren Rublin, Senior Managing Editor of Barron's. Thanks for joining us today for what I call a mid-year market checkup. And who better to perform that checkup than my colleague, Barron's Deputy Editor, Ben Leveson.

Ben, it is great to connect with you again. Maybe I should call you Dr. Ben. I don't know. Anyway, we are six months into 2025. It seems like everything and nothing has changed. I look forward to your explanation for this and for much, much more. So welcome back to Barron's Live and let's get started. Thanks, Lauren.

So we have to start, I think, with the market's amazing turnaround this year. The S&P was down nearly 20% into bear market territory in April after the rollout of the Trump tariffs. Now stocks are back to all-time highs. The AI trade is going strong. And maybe best of all, the rally has broadened out beyond the Magnificent Seven, which is a healthy development and an exciting one.

So a listener named Bruce asks what I want to know. Why did the stock market fully recover despite higher tariffs and an expected slowdown in the economy and higher inflation? What's your thought? All right, let's go through all of this because this has been a very humbling year for me. You know, I had a very bullish call coming in. I got bearish. And then, of course, everything reversed completely.

There is more downside for my turn to bearish this, but not enough to make it worthwhile. There are three things I think have happened. I was actually going through my inbox this morning and someone basically asked the same thing. Why is the S&P 500 at new highs? And Seven's report, Tom Messer, who runs that, had the answer. He's highlighted three things, four things actually.

One, he said the administration has basically, yes, there are going to be tariffs, but they're not going to be what we those initially very onerous ones and probably not as bad as they still might seem like they could be. You know, I keep hearing is we're going to have like 10 percent across the board. And if it does settle in like that, that'd be great. But again,

the administration, President Trump and the administration have proven themselves to be pretty flexible on things, willing to try to make sure that there's not too economic damage. After that initial cavalierness about causing a recession or a bear market, they really reverse course and they do seem to be taking that into account. So I think that's the first reason. The second is that

We all thought there'd be inflation coming from the tariffs. And, you know, it was there in the in the manufacturing and services PMIs, those surveys that are done. People were expecting higher prices. They were front running to make sure that they could get in front of those higher prices.

But it hasn't happened yet. And we've gone through five months worth of data now. We just finished. We're finishing June today. So we'll get a six months worth of data coming up in July. But so far, we're not seeing any evidence of either a big slowdown in growth or a big pickup in inflation. There's a little bit of a slowdown in growth and maybe a little bit of inflation. It depends on the number you look at.

But none of the numbers have really suggested that there has been a big hit yet. And this is, I mean, if those surveys were translating into real data, we should start seeing it soon. And we're kind of running out of runway on that.

And so isn't that because, as you say, the administration has been flexible in its imposition of tariffs? I think so. But we have also been. No, but they're probably not going to. And if you can get, you know, some of the tariff prices get offset by, let's say, lower housing prices or energy prices, things like that. You might not get that pickup in inflation that everybody is expecting.

The third thing is AI. People are really excited about it again. NVIDIA is back at its all-time high. You're having lots of sectors that can benefit from AI doing quite well. And as you said, it's not just the Magnificent Seven. In fact, you look at the performance of the Magnificent Seven and

Not all of them are even up on the year. It's actually, I think, pretty fascinating that you have Meta Platforms is up 26%. Microsoft is up 18%. NVIDIA is up 18%. So there are your winners from AI. That's what the market's telling you.

Amazon is flat on the year. And then you have Alphabet is down about 6.8%. Our stock pick on that is still up a little bit. But Apple and Tesla are both down 20%. So you really have this bifurcation in that index. But there's so much else doing well. Chip stocks are doing well. There's software stocks that are doing well. Industrial stocks are doing well. That it's been OK for the market. And I think that's been a big part of it.

And then finally, everybody looks at the S&P 500 and says, wow, this index is too expensive. And it is. It's at, I think, 23 times earnings, something along those lines, between 22 and 23. Essay points out that people are, the analysts are starting to pivot to using 2026 earnings estimates.

And those are much higher. Those are at $290 to $300 a share. And so if you use that instead, so you do the index at, let's say, $6,141 is the math he's using. He's using $295 for the earnings in aggregate for the S&P 500. You get an index that's actually under 21 times.

And that is, he calls that a reasonable valuation based on if you agree with all the assumptions built into the rally, that you're not going to get a growth slowdown, you won't get too much inflation, that AI is going to continue to boom, then that valuation is actually okay. And so that's what you get. You get a market that's hitting all time highs. All right, we're going to come back to earnings and the rest of it in a bit. But I want to ask whether you have a market forecast for the rest of the year.

You know, it feels like this market right now, I mean, it's, you know, I'm always a big believer in momentum that markets that go up, that are going up, want to continue going up.

unless there's an event that derails that. And I think this rally right now that we've had is due for a break from a technical perspective. I don't know how many people pay attention to the RSI, the 14-day RSI, it's a relative strength index.

It just tells you, it's a momentum score, how strong the recent rally or sell-off has been. And we're basically at 80, which is the mark that tells you it's on a scale of zero to 100, I think. But it's usually between 20 and 80 are the areas that you're looking at. And when you hit 80, you're overbought.

So I would be surprised if there is a pause here. But this has actually been overbought for quite a while, really going back to May almost. And the market's been going higher through it. So I do think that there is room for this rally to continue. I can stay away from forecasts because I've been just terrible at it this year.

I would find it ironic, you know, I kind of disparaged all the strategists who were predicting gains of like 7 to 10 percent because that's kind of your average gain in the S&P 500 and you rarely get average gains in the S&P 500. So knowing my luck, that's pretty much what we're going to get for the year. It's very hard to come up with a forecast other than to say higher.

Yeah, right now it feels that way. There are going to be bumps along the road. I mean, as the president has shown, he is OK with causing a little bit of volatility here. And there are things that are out of his control. Do you have any sense of an early read on 2026 or does the street have any forecasts coming out about 26 yet? Well, they do. They have those earnings that I mentioned before that, you know, earnings growth is supposed to be very solid looking at 290 to 340.

$2.90 to $3 a share of earnings, which would, you know, that's a record in and of itself and would really be the thing that keeps the market going. As long as those earnings are coming in really well, the market's going to keep going higher. And I think that's what people are expecting.

All right. Before we go further into earnings, not to mention stocks, sectors, other asset classes, let's talk a little bit about the macro backdrop. It is hard to find anyone predicting a recession this year. That's quite a change from last year. But it's also hard to find anyone predicting GDP growth of, say, more than two and a half percent. And even that seems a little bit aggressive. How do you size up the economy from your perspective?

You know, right now it just feels resilient. The early, I would have thought that the early tariff, just the shock of it, even if it didn't go through, would have been enough to, it would have been enough to slow the economy into a mild recession. You know, the amount of uncertainty that that created in terms of, you know, companies and their hiring plans and their CapEx plans and all those kinds of things,

like i'm still kind of amazed that you you know from what i heard from companies um that it seems like they didn't act on it um you know the economy has proven remarkably resilient the job market is continuing to hold up um growth uh is slowing um but you know you're still looking at at growth there and you're also seeing companies able to protect their profit margins which is huge for

for companies. And so, yeah, you don't see a lot of people predicting recessions or, you know, gangbusters growth. One person who is, and I always like to, you know, is Peter Bereson over at BCA.

Coming to the year, he was bearish and he was right at the beginning of the year, almost hit his target. I think the S&P came very close to that 4,500 that it is his target. He still sees a 60% chance of inflation. It's for a lot of the reasons that you asked me about before. He doesn't think that the U.S. economy or the global economy were in great shape before the trade war started.

He doesn't think that Trump has abandoned tariffs, and he's right on that. I think it's the extent of those tariffs and where they come in. And then he thinks that the tax cuts that are going to come from the big, beautiful bill are going to get undermined by the bond market. And if you put that all together, he sees it. I was meaning by that. Let's tease that out a bit more.

You know, he thinks that, you know, you're going to if you get you could you could get the lower taxes. But if bond markets, if bond yields go up, companies are going to have to pay more for their cost of funding and that can offset it. It can also cause more volatility to in a way that works.

you know, we've seen before. Um, but you put it all together and he thinks there's a 60% chance that there's a recession over the next 12 months and he's sticking with that 4,500 target. Um, but right now, you know, there's, you're starting to see that a little bit. Um, you know, there are some people that I, you know, that have are typically kind of bearish that, uh, I'm seeing bearish notes come from, uh, Luthold group, for instance, um, was pointing out that, uh,

the leading indicators have been, um, are, are, uh, kind of recessionary right now. Um, but, uh, they, uh, you know, not enough, uh,

But it's not enough to really point to anything. But even J.P. Morgan today had a note riffing a little bit on Voltaire, saying that this isn't the best of all possible worlds and worrying a bit about a global slowdown.

And, you know, so that is out there. And I think more than inflation, I think that the risk is that people are too complacent on the economy and that something shows up that we weren't expecting in the data. And we do end up with that, well, what JP Morgan calls a growth downshift. And that basically causes this, you know, very bullish market to pull back.

Well, I don't know about the Voltaire part, but we'll see what happens there. There are certainly things to worry about. I want to talk a little bit about bond yields. You alluded to them. Why would they go higher? Is it because of fears of inflation? Well, I think it's fears of inflation. It's also fears of U.S. profligacy. You know, I know it always comes up. When does the market care about the U.S., the deficit? Yeah.

And I have no idea. I think, Lauren, you could probably agree with me. We've been hearing about deficit worries for most of our lives. And I know I remember from the Reagan days,

And, you know, it never has seemed to be a problem for the U.S. Someday it will be, but you can't predict it. No, it's been very hard to predict. And everybody who's been predicting that it would be a problem for, you know, all this time have been wrong. And if you used it as a reason to not invest in U.S. stocks, you've cost yourself a lot of money.

It doesn't mean it should be encouraged, however. No, it doesn't. I think it eventually will be a problem.

Um, and you know, it's, it's something to pay attention to. Um, but you know, there's a lot of things that go into bond yields. Well, one of them is inflation. You know, we're, we're, we're over 2% and it was something that, you know, inflation had gone missing in the post financial crisis world, but we're back into an environment after that, you know, post COVID spike up to, uh, whatever it was. And, you know, we're back into something that looks a lot more normal-ish. Um,

in the 2% handle kind of range. And that's a little higher than the Fed would like, but it's also not extraordinary. But it's more normal, and you have to price in that inflation. And then you have the growth, and you have all these things that suggest that where we are in the 10-year yield, this is, again, back to where things were way back when, before the financial crisis.

And what I find fascinating is that, you know, if you hear about there's been all this volatility in the 10 year yield and other yields as well. But I'm looking at the 10 year right now. But I'm looking at the 200 day moving average, which is really a good way to smooth out the volatility. And it's been pretty much sideways since the end of, you know, since December 2023. So for the last year and a half.

So there's been all this volatility around that 200-day moving average, which is right around 4.3% on the 10-year, which means that the market, at least for now, seems to think that it has found a –

decent place to settle for the 10 year that you know that maybe there's less going on there than the people make out by trying to read a lot into these moves as it goes up towards five and then it comes down towards three and a half. But really, it's kind of in a 4.5. It's in a range between 4.5 and four. And that's fine. The issue would be if it steps out of that range on the upside.

Right. And it hasn't shown any signs of that yet. So I'm going to keep an eye on it. I'm going to listen to these arguments. You're going to hear people start getting very worried when it goes from 4.3 to 4.8 or 9. But we're going to need to step back and think about, okay, it's still in this range. What gets it to break out? But right now, there's no signs that it wants to do that. And if anything, it looks like it's heading towards the bottom of the range.

Let's talk about the short end of the market, Fed funds rate. The Fed has yet to cut rates this year. Everyone is waiting for the first cut. Probably won't come with the July meeting, may come in September. What's your view?

Yeah, I think that sounds right. You know, I know there's talk of the July cuts, but unless the Fed really thinks that growth is going to precipitously slow, I don't think it makes a move. And I think that's OK. You know, the there still is this push and pull between inflation and and growth and

I'm not sure, you know, if things are holding up, there may not be a need to do anything right now. You just let things play out and there's something to be said for that. I think the risk though is that you are,

You know, if you start seeing a real slowdown in the economy, is the Fed too late to move? You would much rather see it move before the slowdown really shows up than as it shows up, because then it's probably a little too late. But I feel for Jay Powell's predicament, because it is hard to know how much how how much will be imposed in the way of tariffs and what the inflationary impact might be.

Yeah, or even from the big beautiful bill, there's going to be a lot of spending coming out of that. And one thing that's interesting is if you look at these, you know, their financial conditions indexes, Goldman Sachs has one, Bloomberg has one. They're all pretty much saying that we have very loose financial conditions right now. This is without the Fed cutting rates.

And so the market in some ways is cutting for the Fed. And

And, you know, we're seeing that in the rising stock prices and whatnot. And the auto IPO market and rising crypto prices and all that stuff. It's all there. And so does the Fed need to actually go ahead and cut? Probably not. So I wouldn't be surprised if we do get that lowering of rates come September. I wouldn't even be surprised if we didn't get any cuts this year. And I'm not sure it would matter all that much.

Well, part of the issue, of course, is the is the constant criticism of the Fed by the president. And the Fed has really walked an apolitical line here. And we'll see how long it can continue to do so. Yeah, it's it's trying. I mean, it's it's tough. You know, the Fed, the Fed, I think, always faces some political pressure, but never like this. And, you know, certainly not with the level of name calling and whatnot that goes on.

I don't I don't think Powell is a moron. Is he low IQ? No, he knows what he's doing and you might not agree with it. But and yet what president wouldn't want lower interest rates? Right. You know, it's hey, let's let's inflate a bubble. And you know what? If we get a July cut, I think that's again, you know, the beginning of this year, I was very bullish.

as I said, that it was going to be a high volatility year, but between the AI trade and some other things and Trump's deregulation and more fiscal stimulus and that kind of thing, that you could get a market that really, I was expecting another 20% gain and real inflation, deflating of the market into a bubble. Who knows? Fed cuts, maybe that happens. Well, it would unleash a certain amount of animal spirits and it could happen.

They're already unleashed, it feels like. Perhaps you're right. But I'm with you. I don't think they'll cut in July. We'll see what happens after that. And as Powell says, he is data dependent and will be watching the data just like he will. So let's talk about foreign markets for a moment. They have done exceptionally well this year relative to U.S. stocks. What are the reasons for that? And will this international rally continue?

Yeah, it's a great question. It's someone who's believed in diversification for a long time. My portfolio has suffered because I do own an ACWI ETF, All Country World Index, and having foreign stocks really undermines some of the performance of the S&P 500 in there. But the

It's been a great place to be this year for two reasons. One is that the stocks are outperforming on their own, and then you have the currency side of things, which have sort of given American investors an extra kicker. You've benefited from both. And, you know, I think that partially this is just a reflection that, you know,

of hopes that there's a real change in Europe going on that's going to lead to more growth, not just cyclically, but maybe structurally. You know, we're seeing hopes that Germany actually starts to spend above that 60% cap that I think it's had.

that other parts of Europe continue to spend, that you start seeing Japan has already become a more interesting place to be. And so that there's just, these countries now have stocks to offer that look attractive.

And so I wouldn't be surprised if this kind of continues for the rest of the year. The one thing that would make me doubt that is just this comeback in the AI trade where so much of that is so much of the great AI companies are in the US. But because the AI trade has moved into other sectors, perhaps it also ends up benefiting global stocks as well. So I wouldn't be surprised if we can see some

outperformance in global stocks still. And largely because this was, I thought found this very interesting because we keep hearing about whether people are abandoning us assets. And I heard this and there was a note today from Morgan Stanley, but I also heard this from a bank, uh, um, CEO I was talking to, um,

I'm saying that, you know, what you're not seeing, nobody's abandoning the U.S., certainly not the equity markets. What they've done is they were way overweight, the U.S. and certain sectors, and they pulled that back a little bit. And so you see this happening. And the other thing that's happened is just because the price changes have been drastic, it's not necessarily because money has moved. It's just

It looks like, you know, that basically Europe is another place have gotten larger parts of the benchmark and the U.S. has gotten a little bit smaller, but still the massive part. So you see some shifting there in in the weightings, but it's not really a move out of anything so much as just rebalancing the portfolio a tiny little bit. So, you know, Morgan Stanley came away saying that we don't find any we don't find much evidence to support the narrative that foreign investors have been reallocating away from U.S. stocks.

It's just downsizing these massive upper weights they had a little bit. That makes sense. I also want to add that if foreign markets are doing better and foreign economies are doing better, that will benefit a lot of U.S. stocks that have overseas business. Right. That's, I think, one thing that we haven't discussed enough is that we've had this drop in the dollar. And if it doesn't become, you know, at some point it's going to become an issue if it keeps falling like it has.

But it's just had a very big correction. It happened very quickly. But it's also at this level, it's very good for U.S. multinationals. It makes them more makes them more competitive. But it also means that they're converting foreign currencies into more dollars, which gives their sales a boost.

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All right. Two more questions, Ben, and then I'm going to let our readers ask, our listeners rather, ask all the questions because they've got some great ones today. The first is I want to talk a little bit about Constellation Brands, the lone big company that's reporting earnings this week. Tell us what's expected there. I know there's been some controversy over beer sales and whatnot, but what do you see?

I feel for Constellation, this is one of those stocks that has gotten beat up really bad. And it's cheap. It's trading down at 12 times earnings. And I know people out there-- actually, one of our writers, Paul LaMonica, wrote about it in the Trader column this week.

arguing that a lot of the bad news is in the stock already. And it's possible. I mean, this is, it's a cheap stock. But then you go ahead and look at something like, you know, JP Morgan's analysts, you know, they looked at it and they acknowledged that this stock is cheap, but they think that the numbers are going to actually be worse this quarter.

that sales have been slowing anyway. And then you have the immigration crackdown, it could actually impact sales to Hispanic consumers who are big shoppers for Constellations, different brands.

And, you know, I think they make Corona and Modelo, I believe. And, you know, so if that happens and you know what, that's that's not going to be enough to knock the stock out of the doldrums that it's in. So JP Morgan actually suggests it's just waiting. It's best to wait and see what happens because they wouldn't be surprised if forecasts are lowered for the entire year. And, you know, they'd acknowledge that the stock has dropped a lot already on that. But there's no real catalyst to send it higher.

It's an interesting case study in what happens when public policy to a degree interferes with your business plan. Yeah, well, and it's already dealing with these headwinds of people wanting- If they're drinking less. They're drinking less, right. I mean, it's kind of amazing that, I don't know if it's a health thing or whatever, but people are drinking less.

They are not drinking beer the way that they used to. And that is going to, that's, you know, that stings for a company like Constellation. Right. That's in part when health ideas intersect from the business plan. So there are a lot of headwinds there. Last question, then we'll go to listener questions. If you could break down the S&P for us and look at what you consider to be the most attractive sectors at the moment.

Ooh, that's a tough one. That's why I asked it. That is tough. I mean, I think that there is, let me pull up my sector list in front of me. I just, I find it amazing that the sectors that we've had such an incredible impact

array of sectors doing well this year. I don't know if anyone will believe me if I told them that the top performing sector as of this moment, according to FactSet is in the industrial sector based on the industrial select sector, SPDR ETF.

It's at 11.69% up for the year. That is 0.02 percentage points more than the communication services select sector. It's been a long time since industrials have led the parade. Yeah, and this was a story that Al Root did at the beginning of the year, arguing that industrials are going to be a huge beneficiary of...

of the AI boom and it is. They're the ones who are going to be building out these data centers. They're the ones that are gonna be building out the infrastructure that's needed to power them. And they're gonna benefit from the AI helping to actually run their businesses too. And so they're having a great year. They've had a great three months. And you're seeing that, you're seeing communication services, you're seeing two very different sectors at the top, but then you go to the next two.

and it's tech and it's, uh, financials. They're within a half a point of each other. Um, I really think financials are interesting here. Um, we had the stress tests, um, results come out on Friday night and, um,

that was very good for, they were just less onerous for the US banks than I think anyone really thought. And there's been this idea that had fueled the financial sector and the banks

for a while now that there's going to be less regulation coming out from the Trump administration. I think you're starting to see that happen. And you look at the bank ETF, that's KBE, the Spider S&P Bank ETF. That's not done great this year, but it just crossed back above its 50-day and its 200-day moving averages. And it's starting to look pretty

It's starting to look like it's ending what was a sideways, maybe down kind of trendish kind of thing and starting to pick up. And I think financials would be one I'd be watching pretty closely. They've been an out-of-favor sector, if I can talk properly, for so long. And they're finally starting to do well. So I think that's great. I think the...

There are a couple of things I'd worry about. Healthcare is so cheap and beaten up, but it has a couple of things working against it. One is just the uncertainty coming out of Washington. The other, it's a defensive sector. And this is not a market right now where you want to be playing defense. And I think that's a weight on it. And I think you're seeing the same thing with consumer staples.

That they are, they're also, you know, that sector's up only 2.4% this year, but it is up, but again, it's defensive. It's not the kind of thing that people are running to buy when you're feeling good about the market. And they also have a lot of concerns about the, over the health kind of things, right? People just aren't eating snacks the way that they used to. And so you're seeing stocks that are very snack focused like Pepsi get hurt by this.

And, you know, so those are sectors I would probably be doing my stock picking in, looking for companies that are strong in those sectors who could do well if we need to, if we get to a moment where the market pulls back and you need defensive sectors. But I do think that right now we are in a momentum market. I want to keep sticking with these industrials that are doing well and some of these tech stocks that are doing well and whatnot and look at those banks.

All right, let's go to some listener questions. And that discussion leads into the first one I'll pose to you. It's from Ram, who notes, given the high valuations for U.S. stocks,

He asks, is it better to pick individual stocks with reasonable valuations instead of index-based investments? In other words, do you want to be a stock picker or an index buyer at this point, or both? I mean, I think you want to be both. I think that's where diversification comes in. We know that the market is top-heavy, and they don't stay. When they're that top-heavy, if those at the top turn around, you're going to have a problem. The

The problem is also though, is trying to time that. You could have done that at the beginning of 2022 and looked like a genius for 11 months, and then all of a sudden, you're back with the S&P outperforming everything again. So it's really hard to time. I mean, one of the things that I think it's important to think about is just that, trying to do something besides the S&P 500,

It means that you have to make a choice and you have to kind of stick with it

no matter what happens. Otherwise, you end up timing things at the wrong time. So, you know, when they there was a point where the low volatility ETFs were getting a lot of attention. This was, I don't know, 10, 15 years ago now. And the argument about them is that over a long period of time, they are going to provide you better returns than a market cap weighted index. This is weighting them by their volatility rather than

uh, market cap, um, you're going to get a, an equal return, but with a lot less volatility, um, which sounds like really great news, but you do get periods of underperformance that are hard to deal with. And if you jump out of it at those times, you end up getting the worst of both worlds. You know, you end up shifting back into market cap just when you might want to stay in low volatility. This is my way of saying you, you have to come up with a plan and stick with it. Um,

Otherwise, you just get shaken out. And so, yeah, I worry about the S&P 500 and just the sheer outperformance that it's had, how many stocks are kind of tied to the same themes.

Um, but it's also, you know, over long periods of time has proven to do well. And if you have a long timeframe, you know, if, uh, you know, even if you had, uh, sold, let's say in the financial crisis, even if you had picked the top in the financial crisis, you were better off, um, uh,

uh riding out that huge drop that the market had and all that volatility and you came out on the other side so much better um because it's so hard to know when do you get back in um and i think that's the key to index investing is you just have to trust that the market goes up over time even if you go through long periods of time where it's not going to do very well right i think you're you're speaking of the problems with market timing

And that I am. They've been written about and demonstrated quite often through the years. And experienced by yours truly. I'm sorry to hear that, but you're not alone. So let's turn to another asset class, and that is precious metals. Ken asks, where do you see gold by year end? And we should note that gold has had a runaway rally this year. I think it sold off a little bit recently, but it's really been a stupendous run.

Yeah, I mean, it has been fascinating to watch gold because it did have this amazing run and not just this year. I mean, it's been happening for a while, really since if you look at the chart, kind of bottomed out in, I'm talking just on a recent basis in 2022. And

then it went kind of straight up for a while. And it really took off in early 2024. And right now, it's actually been just trading sideways for, oh, I don't know, since April-ish, since mid-April. So basically, it peaked when the market bottomed. It sort of beat glory. It was a peak for gold. Yeah.

Right. And that doesn't mean that gold hasn't really dropped much. It's just stopped rising. Right. It's going sideways. And you had other precious metals get in on that on the trade now. So you had platinum, which Andrew Barry wrote a great article about a number of months ago before it took off. Silver has been doing well. And I think that's partially what you're seeing is that the trade has moved and precious metals has moved out of gold.

and into other precious metals. There's not as much worry now, but I do think the fact that gold is not dropping a ton really does say something that, you know, as long as it stays above, I don't know,

You know, it looks like support is down at around, you know, twenty nine hundred or so. You know, if it holds that level, I mean, that that's just the bottom of the range. And that means that people aren't selling or owners, people, countries, whatever, are not rushing to sell. Right.

Right. And we know that central banks have been buying. We know that individuals in countries like India and China have been buying. There's just and then investors finally got into it. So I think there are people who just want to own gold and, you know, they aren't really selling it much. And, you know, could we see a trade sideways for the rest of the year? It's like, yeah. We see a pullback a little more. Yeah. But I don't think this is the end of the gold trade. I think

The world is in a period of change. And in those periods of change, owning gold is probably not the worst thing to do. I agree with that. Let's turn to the energy market. Tom asks what your expectation is for the oil price in the third and fourth quarter. And I'll expand it to say, what's your outlook for energy stocks?

This is the sector that always kills me because I always think, you know, these stocks are looking cheap, they'll do well. But they just haven't been able to get it going, partially because oil prices have just been kind of volatile but weak. You know, we were as low as 55-ish per barrel on WTI earlier this year.

And it's, you know, they got a big bounce out of the war between Israel and Iran, but then oil prices fell again. And what was interesting with the war, you know, you had oil prices rallied a lot more than oil stocks.

And that told you something there too, that it was really just about that people weren't really seeing a long-term benefit to the oil companies out of this. I still think that there are companies like Exxon and Chevron, I'm actually kind of a fan of. You had a good piece about them recently.

Yeah, there, you know, someone made an argument and I don't know, you know, I appreciate it. I think that it's a good argument, but that, you know, people continue to see Chevron and Exxon just as like these old school oil companies when at some point, you know, they need to be seen as the companies that will be helping to fuel all these energy needs that we're getting from, you know,

know the electrification of everything that is still a lot of that going on from also uh and then from the ai and the data centers you know there's a lot more energy needed and

Chevron and Exxon are going to be a huge part of that in producing the natural gas to power plants and whatnot. So I think there is something to be said there for these big guys. And it's just a question of when. But anytime we pick Chevron earlier this year, it turned out to be a lousy pick.

And, you know, that's on me as much as anybody. Well, they're two very well-run companies. We know that. That they are. Sometimes it is just not their time. We had a question from Dennis, and this gets to what you were just discussing. How have the Barron stock picks fared for the first six months of 2025? Some have been fantastic and some have been terrible. And we're always trying to work on our process to...

make that to try to solve for that you know how do we avoid those terrible calls and uh um you know keep the good ones um I just I just want to know before you continue that stock pick stories are written by a large number of staff members and we have a bi-weekly process

where we sit down as a committee and we discuss a variety of proposals for different stock stories. So there's a lot of thought given to them. And the performers are a reflection of just how difficult it can be. Yeah. I mean, there's some where, let's see, you know, our first pick of the year was a retailer called Academy Sports that had actually done very well for a while. And, you know, Teresa Rivas is one of our, is basically our retail stock specialist.

thought that this was going to be their comeback year. And so far she's been wrong. It's really underperformed. It's just the turnaround that she was expecting hasn't happened. That was a terrible pick, but our next pick was great. This one came from Jacob Sonnenschein. It was right as DeepSeq happened, he looked at Amphenol, which is an industrial that makes, I think, connectors for utilities and whatnot, maybe some data center stuff too.

widely seen as one of these uh industrials of benefits from ai got hammered jacob came in and said look this got hit too hard um the stocks gained 42 since then so that was a great call our best call of the year was made soon after in january at the end of january january 31st by um uh by andrew berry uh he he looked at dollar general and said look this is the time to be buying it

And he turned out to be absolutely right. That stock is up 58%. But we had others which have been a disaster. We did one on Fresh Pet.

You know, this is one where we tried to sort of pick the bottom of, you know, it hadn't been doing so great, but we thought it had gone through the troubles and it hadn't. And it was a big mistake that we should never have picked. And in the, you know, in the future, we're going to really try to avoid that kind of call. I mean, what you see with it is that, you know, it's a

You know, it's a volatile stock. It's a risky stock and it doesn't, you know, it doesn't screen well enough on

enough areas to really be one where you want to say, yeah, this is where we want to be putting for a stock that's this volatile. It was just not the right time for it. You know, we needed to have more of a margin of safety built in. And I kick myself over that one all the time. One of these days, I'm going to stop you from beating yourself up. Yeah.

be it's my job it is very hard to pick stocks i would say we are very thoughtful but we are far from yeah and and that's the thing is i think what i like about our picks is that we are thinking about um about what can go right and what can go wrong and we're and we're making our case um when things do go we do

And we will tell you and we will take responsibility for that. You know, it was like Uber was another great pick. That was Jacob. But Jacob also then got Amgen wrong. He thought Meritide was going to be, you know, a big deal when results came out last week. And it turned out that it caused some stomach issues. And so the stock fell. You know, we're still...

sticking with the pick for now because we think that the companies will be able to deal with that and that the market is desperate for a third competitor. But it's certainly the thesis took a bit of a hit there. And so we're going to be keeping an eye on that one very closely. But we are looking for these things that the market isn't talking about that can make these stocks do well. And sometimes we hit.

You know, Andrew got great timing on his pick for Sphere Entertainment that makes the giant sphere in Las Vegas, you know, up 30% since he picked it. And, you know, others, we've had some picks that we didn't make very long ago, like Viking stock has gone up 20% since we picked it at the end of May. So that's, you know, one month ago.

So we've had some very good ones like that as well. So they're doing okay, but we got to remove those big losers. And that's our goal for this coming 12 months, basically. All right. Going to end with a question from John who wants to know, other than geopolitical events, what concerns should we be on the lookout for as the market keeps climbing?

I think it is this economic complacency. I do think we have to just keep an eye on things. Right now, the economy is looking okay, but are there things happening that we can't really see that could cause that recession at some point? A real recession would cause the market to fall, but right now the market isn't seeing one and investors aren't seeing one.

So, but that's what I think would probably be it. Either that or, you know, it's going to be something that none of us are thinking about. Well, we'll learn a little more with the jobs report on Friday. And with that, we need to end today's call. Ben, thank you so much for your insights as usual. And thank you to our readers. I am so sorry that we could only answer a fraction of your questions, but we'll try to think of another way to answer.

handle more of them in the future. Please join us again next Monday for a conversation with Richard Bernstein, CEO and Chief Investment Officer of RBA Advisors. Rich had a long career as a Wall Street strategist, and he's in the midst of a long run running his own shop. He's a keen observer of markets, and Ben and I look forward to interrogating him on July 7th. Until then, everyone, have a great holiday weekend. Stay well, and we'll hear from you next week.