In today’s episode, Bill Gundersen and Barry Kite navigate the murky waters of the stock market’s tumultuous reactions to tariffs and trade policies. Gain insight into how current market dynamics are shaped by sentiments, fear, and valuation, with a focus on AI stocks and key players such as NVIDIA and Microsoft. Discover the potential implications of lowered GDP forecasts by the Atlanta Fed alongside a discussion on geopolitical tensions and their economic repercussions.
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 Tariff Tuesday.
SPEAKER 08 :
Is today Tuesday? Yes, it’s the Trump Tariff Tuesday edition of the Best Stocks Now show on this March 4th. This is Bill Gunderson, president of Gunderson Capital Management. I’m here with Barry Kite, our chartered financial analyst, trying to make sense of things. and what uh… people should do what what should we do during a time like this where apparently fear has gripped the market for now and uh… we are off to another rocky start here this morning the uh… s&p is down one and a half percent right now it’s clear down to five thousand sixty three nothing’s happened to earnings it’s all happened to sentiment right now that’s the third part of the equation It’s getting all three in the right place at the same time is the trick in the market. Valuation, technical, sentiment, momentum, you know, getting them all lined up, very difficult. The Dow is down 1.3% right now, 42,610. The beleaguered NASDAQ, which was over 20,000 not too long ago, we’re now in the grips of a 10% correction. NASDAQ’s at 18,063, down 1.6%. And the Russell 2000 small cap… Down 1.8%. Bitcoin was getting slammed last time I looked. It was down $10,000. Now it’s down $7,198. $82,090 back to its low on the year. And interest rates are plunging. You would think that would help the market, but it’s not. And I’m going to have Barry explain why here in a moment. 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 Barry Kite, our chartered financial analyst. And Barry, we now have the NASDAQ in 10% correction. The AI stocks are more down in the 15% to 20% range. And I’m talking stocks like Microsoft, you know, ChatGPT. I’m talking stocks like NVIDIA with their Blackwell chips. I’m talking stocks like Google, et cetera, the big tech stocks, the so-called Fabulous 7. Many of them are down more than 15% up to 20% right now. Now, here’s the question. We talk about earnings, the multiple, and the valuation. And that multiple slides up and down with the interest rates. And as interest rates go down, which they’re plunging right now, why isn’t the multiple going up? Well, and I want Barry to give his opinion in a minute here. First, I’ll say why I think it is, is because there’s a disconnect right now. When sentiment grips the market and you have, it would be like fishing out on the ocean and there’s about 15, 20 boats around you all of a sudden, right? All of a sudden, the weather starts to come up and you see all those boats heading for the harbor, the safe harbor. Well, that has nothing to do with the fishing. It has to do with some kind of storm coming through the market or through the ocean out there. And I think that money headed into the bond market right now is headed for a safe harbor. And we’re also seeing that in gold right now. Does that make sense, Barry?
SPEAKER 09 :
I would agree, yeah. I mean, you’ve got really a risk-off move versus other times. You have interest rates go down for other reasons besides a flight to safety. And multiples have room to expand in this sense, which has been odd. Because we haven’t seen this happen in a while, right? You’ve got interest rates going down pretty significantly. Significantly. Especially on the long end.
SPEAKER 08 :
Two years, 3.9 this morning. And the long end is 4.15. We have not seen that in over a year.
SPEAKER 09 :
Yeah, and we’re actually at 4.12 right now. Wow. I mean, remember when we hit 4.5, we were like, oh, okay. That’s because we were bumping up against, remember, 4.75 earlier this year. We also had the market, it seems like a long time ago that we had mid-February, market was hitting all-time highs again, right? It was like the third one of the year, I think, for the S&P 500 at that point. Yeah, with the markets, you’ve got this pullback, a significant correction off of those highs, and it’s been odd because interest rates have been going down as the market’s going up.
SPEAKER 08 :
Now the question is, why are all the boats all of a sudden headed for the harbor of safety? What do they see coming? Uncertainty, really.
SPEAKER 09 :
It’s that they don’t know what’s coming. I think we have a fog, right? Maybe a fog came over.
SPEAKER 08 :
There’s a storm coming. We don’t know how bad it’s going to be. And it may pass through and not cause any damage whatsoever. It may never hit us. That’s what the market is worried about, and I think you can explain it with the word tariffs. And, of course, you know, everybody knew that Trump was going to do this, that he was going to use tariffs as big-time leverage against other countries who he says take advantage of us. And, you know, the folks elected Trump knowing full well that that was going to be a big part of his agenda. And Besant came in as our Treasury Secretary, and you’ve got the guy from Cantor Fitzgerald coming in, and all of them agreeing that tariffs are one of the sledgehammers to hold over other countries to try to get more equal trade or to get what we want from these other countries. Now, one of the things we want is a tighter border. from Mexico and a tighter border from Canada, which they came through with. That was a month ago, five weeks ago, I think, immediately. But it baffles me just a little bit why he is now putting the terrorists back on them. What is your opinion on that? Why wasn’t, did they not do enough on the border? Or is it now coming down to a trade issue? What say you, Barry?
SPEAKER 09 :
Yeah, well, I mean, I think, you know, I think certainly, you know, we are, you know, Whether we want to be or not, we are a consuming country, right? So we’re going to likely import more than we export.
SPEAKER 08 :
We have a huge trade deficit.
SPEAKER 09 :
And part of that’s because we’re the richest country in the world from that perspective. So you’ve got that backdrop. So countries need to trade with us. Of course, Mexico and Canada, they certainly rely on us. You know, us as trading partners, you know, likely a little bit more than we do them. And so you’ve got some leverage there. The question is, you know, what do you break along the way, right? And, you know, some of this is hard. As you mentioned today, it’s hard to – It’s hard to connect all the dots, and the dots seem to keep moving, too, right?
SPEAKER 08 :
Yeah.
SPEAKER 09 :
It’s a little murky out there, which is what’s creating the uncertainty, which is leading to what we’re seeing in the market.
SPEAKER 08 :
Yeah, but Trump is being consistent with what he said he is going to do. I think the outcomes…
SPEAKER 09 :
or I think the outcomes are what’s uncertain, right? We don’t know what’s a 25% trade on Canada.
SPEAKER 08 :
Well, it put the world into a global recession. I think that’s probably the worst-case scenario, and that seems to be what the market is worried about, and that’s why they’re running for the harbor, the safe harbor of U.S. bonds, which are considered still to be the safest harbor in the world. And that’s what it is, fear. It’s fear because, you know, China is now going to retaliate against us. You think about companies like Target and Walmart and Home Depot and Lowe’s. We’re a consuming nation, yes, Barry, but we also want cheap goods, okay? We don’t want to pay up for a pressure washer from Home Depot that’s made in Illinois. It’s made a lot cheaper in Mexico or in China, and we don’t pay as much for it. So there’s also fear that inflation comes back. All of a sudden, that pressure washer is no longer $199. It’s $250, right? So that’s another fear out there.
SPEAKER 09 :
And it’s Econ 101, right, where trade is a collection of trade-offs, right, in terms of, okay, we’re getting this cheaply. Of course, then next thing you know, our steel industry isn’t doing as good because you’re getting it from others. So there’s all these different cross-currents.
SPEAKER 08 :
We don’t manufacture things anymore in America. Right. I look at all these little parts, you know, I buy little parts for my little train set with the grandkids. We’ve got a little city set up. All these little parts are made in China, little painted people, you know, and stuff like this, plastic people. Do we really want to be manufacturing that in America? Or are there things that we should be manufacturing in America that are very important? Another consideration here is the supply chain. Is there going to be retaliation? Well, we need this to make, for instance, antibiotics. We need this ingredient from China. And China says, no, you can’t have that ingredient to make your antibiotics. So this is all of the temper tantrum, the chaos, the unknown. It will all settle out at some point in time. And in the meantime, when we come back, Okay, I watch forward projections on earnings. They look okay. But I saw a forward projection today on GDP, the gross domestic product of the U.S., and that doesn’t look so good, which lends credence to the fact that they’re running for the harbor because they fear a recession. We’ll be right back.
SPEAKER 03 :
They call me the breeze. I keep low and low.
SPEAKER 1 :
Thank you.
SPEAKER 08 :
And welcome back to the second quarter of today’s Best Stocks Now. So this caught me by surprise here this morning, Barry. I had no idea that the Atlanta Fed’s GDP model for the quarter we’re now in, all right, there’s, what, four weeks left in this quarter. They’re expecting, they’ve adjusted from a 1.5% decline in GDP to a 2.8% decline in GDP. All right, did you know that?
SPEAKER 09 :
No, that’s a big move.
SPEAKER 08 :
That’s a big move. I didn’t know that it was negative. It’s not something that’s put out a lot. I would say that this quarter is still kind of on the Biden administration. Maybe, yeah, I’m going to call this one on. But going forward, you get another negative quarter. It looks pretty obvious that we’re going to get a negative quarter here. And if we get a second one in the second quarter of this year, That’s technically a recession, two negative quarters in a row. So anyways, the Atlanta Fed’s GDP model sees Q1 GDP deeper in the red after the ISM release. I don’t know if you were on that, Barry, the ISM release. I don’t know where I was at when the ISM release happened. Maybe I was releasing a red fish. I wish. No, I’ve been glued to my computer because of all this. I have done a lot of lightening up. That’s all I can say.
SPEAKER 09 :
It is a big move. I mean, you look in terms of the Atlanta Fed. I mean, their model, right, you’ve got initially it was estimating Q1 GDP was going to be fell 1.5%. Like you said, the previous estimate was a 2.3% growth. So do the math there. That’s a 3.8% difference.
SPEAKER 07 :
Yeah, that’s big.
SPEAKER 09 :
They could be wrong, and it still could be a bad number, right? Yeah. In that case.
SPEAKER 08 :
Yeah. All of a sudden, you know, GDP minus 3.8, that’s a pretty big number. I guess we get that sometime like the first week of April or something, you know, when all the things are tallied. China hits back. Now, this tariffs have consequences, right? China hits back with additional tariffs of up to 15% after Trump’s latest move. So if you’re a manufacturer of U.S. chicken, wheat, corn, cotton, pork, beef, fruits, vegetables, is there anything else? Seafood, sorghum, soybeans, dairy will face a 10% tariff. So they’re paying more for our goods and we’re paying more for their goods. Following Trump’s decision to increase tariffs on all Chinese imports to 20% from 10%. Now the question is, and let’s clear this up, who pays the tariff? Okay, I go to Walmart or Home Depot and pick up that power washer that now has a 20% tariff slapped on it. On China, does China pay the 20%? Does the consumer pay the 20%, Mr. CFA?
SPEAKER 09 :
Yeah, I mean, that is the question, right? You could also reduce demand, right, and the price may not move quite as much. But it’s no different than in COVID, right, in terms of supply chain issues, right, what they were able to pass on to the consumer or not, right? A tariff is a little bit more. easier to judge than supply chain issues, supply and demand differences, right? So in this case, you can look right at a number, right, 25% or 20% or 10%, whatever it is, and you can figure out, okay, well, let’s see, how much did prices, did they go up or down? What was the amount, right? And you can actually figure this out mathematically a year from now and say, hey, looks like 80% of the tariff got passed on to the consumer, right? Yeah.
SPEAKER 08 :
Yeah, okay, now Trump makes the claim that in his first term he took in billions and billions of dollars from China from the tariffs. Okay, is that exactly true? Did China write him a check? Here’s the 20% for that good we sent to you. Explain that one.
SPEAKER 09 :
Well, and that comes from the actual manufacturer, right? So whether it’s some Chinese manufacturer, right, had to pay an additional amount to it. The trick is, as we all know, whether it’s some of us live in Florida, for example, no state income tax. Other places you have a state income tax, well, You know, gas is going to usually be a little higher in somewhere like Florida or property tax. They’re going to figure out a way to get those dollars, right? It just depends on which way they get it, right? Yeah. Okay. All right. And that’s the shell game. So that’s also what we’ve, you know, as you’re trying to read the tea leaves, right, of the market and earnings, you know, all of those different things are moving around right now. And, you know, it’s hard to model.
SPEAKER 08 :
The market’s unnerved.
SPEAKER 09 :
Exactly. And it’s hard to model. I mean, you know, put that in your Excel sheet. Right. And it’s it gets there’s a lot of different outcomes.
SPEAKER 08 :
Right. Yes. OK. Lumber prices hit two and a half year high as Trump tees up tariffs. Now, yeah, I mean, because we’re not ready to fill in the gap right now. Yes, we have lots of lumber, but it has to be milled, and it has to go through a lot of process. It has to be cut and everything, and all of a sudden you put 25% tariff on Canadian lumber. It’s going to pass through to prices at Home Depot. The auto industry, their stock spiraled lower yesterday. He said there’s no time left. The tariffs start tonight, or actually I guess at midnight last night. 25% on Canada, 25% on Mexico. His remarks sent shockwaves through an already tariff-sensitive market. And I think that’s the key right there. What’s causing the sentiment change? This fear. We’ve gone from greed, when Palantir was going up 10% a day, greed, to fear. Quantum stocks were going through the roof. Nothing has changed really with the numbers. Now, they may change. That’s part of that spreadsheet. What numbers do I put in? How much is this going to hit General Motors’ earnings next year? But anyways, the automakers went tumbling. All the automakers, the parts makers went tumbling. Meanwhile, Goldman Sachs CEO says Trump wants to level the playing field with tariffs. He says, this is David Solomon, the CEO of Goldman Sachs, that a U.S. recession has a small but not zero chance. Well, I would say with the Atlanta Fed now at 3.8% shrinkage this quarter, the odds I think have gone up a little bit here for a recession, which technically are two negative quarters in a row. But at least as of yesterday, David Solomon, CEO of Goldman Sachs, says, eh, you know, there’s a small, but not a zero. We can’t completely rule it out. Okay, so now the other big thing in the world is Trump pauses Ukraine aid. U.S. officials, I, easing Russian sanctions. So we are going light on Russia and heavy on Ukraine. More on that when we come back and what it means for the defense markets. We’ll be right back.
SPEAKER 01 :
This is Bill Gunderson.
SPEAKER 08 :
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 GundersonCapital.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.
SPEAKER 05 :
And welcome back here to the second half of today’s Best Stocks Now show. Now, a warning to those who say, well, we should be inverse the market right now.
SPEAKER 08 :
Barry, do you remember the day that the tariffs first went on Mexico and Canada, and Mexico came around and complied immediately, and the market turned around and went, whoa, to the upside, right?
SPEAKER 09 :
Right. I mean, yeah, it’s one of those double-edged sword, right, especially in this situation. And I think this is my comment this morning, and I was actually talking to a client yesterday when actually Trump, when they were introducing the $100 billion investment, which is fantastic, by the way, with Taiwan Simi.
SPEAKER 08 :
It’s up, by the way, 3.5% today.
SPEAKER 09 :
Great, yeah. At least there’s one out there, I guess. There’s only one. But my point, I guess the point is, as he started talking, I saw Dow dropped, I don’t know, 350 points in about 10 minutes. So my point was, I was talking to the client because I’m watching it on mute going down, and we’re talking about it, and then… Then I’m like, the good news is he can talk and the market can go down, but I’m a firm believer that he can talk and the market can go up too.
SPEAKER 06 :
Absolutely, 100%.
SPEAKER 09 :
I was saying we need Scott Besson who understands the equity markets and investment markets. Really well.
SPEAKER 08 :
really really well uh and you know he needs to get the year a little bit i think he has trump’s here that trump needs to tone down the rhetoric but he does it so other nations can hear he’s speaking to when he says this he uses the media to get his point across now another example is on friday The markets were pretty quiet, you know, and then in came Zielinski and the big blow-up. By the end of the day, the market was up 600 points. So, you know, you just don’t know what it is. Events are happening so quickly. I’ve heard people say, you know, I want Biden back. He never said anything, which is good for the markets, right?
SPEAKER 09 :
He doesn’t move them. Yeah, he definitely didn’t say a lot, especially towards the back half. But it was just like I was thinking of Powell yesterday, right, when Powell talks, right, and the markets move so much. And it’s just amazing, really, to watch. I mean, like I said, a firm believer he can move them in both directions. So hopefully we’ll move them forward.
SPEAKER 08 :
Well, yes, I hope so. Okay, so, you know, at the end of the day, I mean, that’s another situation in the world that we have to be aware of. I mean, part of being vigilant, which is kind of our middle name at Gunderson Capital. My middle name is Mr. Vigilant, always trying to take in as much as I possibly can. I happened to watch an interview last night with Tucker Carlson and a retired colonel. Now, whether they’ve got the goods or not, I don’t know. They claim that one half of the weapons we sent to Ukraine were sold on the black market to the drug cartels. Now that’s a happy, there’s your happy thought for the day. If that’s true, that’s not good. But it’s something, you know, that you have to weigh in the back of your mind. I mean, Mexico is a little bit irked with us right now. So Trump pauses the Ukraine aid, U.S. officials are easing the Russian sanctions. And in the meantime, you know, the defense stocks have been pretty strong here recently. Jeff pointed that out to me, the Raytheons and the Lockheed Martins and the General Dynamics and all of those. NVIDIA’s year-to-date drops, stunning. So early in the product cycle, says Bernstein. Well, you know what? I can’t argue with the chart. I can’t argue with the chart. Everything Bernstein says makes sense. The stock now trades at 25 times next year’s earnings, next 12 months’ earnings. That’s the weakest level in a year, and it’s close to 10-year lows for NVIDIA. The stock now trades below parity relative to the SOX index. That’s the semiconductor index. That’s something we’ve only seen once or twice in the past decade. And it trades at only a slight premium to the S&P 500, which is the lowest they’ve been since 2016. It’s clear that the Blackwell introduction has not gone as smoothly as the company might have hoped, but he says our post-earnings, okay, this is since NVIDIA reported earnings. This is Bernstein Analyst. Indicate that the $11 billion in Q4 Blackwell revenues all shipped in January, suggesting the floodgates are now open. And the company indicated to us that demand will continue to exceed supply for several quarters as they ramp. So NVIDIA can’t even keep up with the demand for their Blackwell chips. The biggest issue I think is the worry about the supply chain and getting the parts that they need to make the chips. But at the same time, I mean, the chart is terrible on NVIDIA. Let’s check in on it today. I had a line in the sand drawn. It’s just barely hanging on to that thing. I mean… The proverbial, I went to the Barnum & Bailey Circus.
SPEAKER 09 :
Yeah, you sent us a picture of the trapeze.
SPEAKER 08 :
Yeah, now I’m ready for the Sarasota trip, which I’ll talk about here in a bit, where Barnum & Bailey Ringling Brothers, that was their home. I guess it still is what’s left of the circus.
SPEAKER 09 :
They have Florida State Circus School. Florida State Circus School is there.
SPEAKER 08 :
Yeah. I mean, it’s more like a halftime show now is what I would call that circus that I saw. I never saw an elephant. I never saw a monkey. I never saw, you know, a giraffe or anything like this. It was all just people and disco and lights and things. It was still fun. But the NVIDIA chart looks like that trapeze guy holding on to the guy above him, holding on to his feet, just barely hanging on. And eventually, you know, a few of them did fall to the net, okay? And I told the grandkids, I said, now there’s a lesson here. Watch what that guy does when he falls to the net. He picks himself up, he gets on that ladder, and he goes back up and does it all over again. He doesn’t lay there and cry and say, I’m done with this and that. And, you know, NVIDIA is just barely hanging in there right now from a technical point of view. In the meantime, JPMorgan and Starwood Partners land $2 billion for a 100-acre AI data center. being built in Utah. Utah is becoming really a big headquarter for data. Adobe has a huge campus there just south of Salt Lake City. And this is going to be a 100 acre AI data center. Nobody’s ever made a loan this big for a data center. That tells me that the AI demand is still there. But when fear comes through the market, like it has sweeping through the market, who goes first? The ones that were highest up on the trapeze, right? The Palantirs, the NVIDIAs, all of the big high flyers, they’re the ones that come down. And in the other side of the coin, I’m seeing stocks like Philip Morris, you know, Johnson & Johnson, Raytheon. They’re doing just fine. They’re hanging in there. Of course, they never go up. but they hang in there when the market goes down. You know, and I think that’s one of the reasons why the big wire house firms like them, because they have a very low beta. They just don’t move too much, one way or another. So they have a very low beta, keeps the customers happy. They don’t get too upset.
SPEAKER 09 :
They won’t make you happy. They may not make you happy, but they won’t make you mad.
SPEAKER 08 :
No, no. And as long as I’m not losing money, I’m okay, right? Okay, it’s becoming the Wild West in Austin, Texas. Alphabet and Waymo, or not Alphabet and Waymo, Alphabet is Waymo and Uber began their test on Tuesday. Starting today, riders who request an UberX, UberGreen, UberComfort or UberComfort Electric in the 37 square mile area of Austin. could be matched with a Waymo fully autonomous all-electric Jaguar I-PACE vehicle at no additional cost. It just doesn’t come with a driver, okay? So you’ve got to trust the software in there. Once the Waymo arrives, riders can unlock the vehicle, open the trunk, and start the trip all from their Uber app. If anybody does this, let me know how it goes, okay, if you’re in Austin listening or anywhere.
SPEAKER 09 :
I’ve got a buddy who lives in Austin. I need to call him up and tell him to try it out. Of course, it’s not a choice. It says that they just may be the one to come pick you up. And you can refuse it.
SPEAKER 08 :
Say, you know what, I want a guy in there or a girl or something. Atlanta is coming to Atlanta later this year and Miami next year.
SPEAKER 09 :
Atlanta seems a little difficult, man. Yeah. I mean, it can either be a racetrack or a parking lot in Atlanta.
SPEAKER 08 :
Meanwhile, Tesla is set to launch an unsupervised, fully autonomous ride-hailing service in Austin, Texas in June. And in the meantime, Tesla’s China sales… dropped by 49.2% in February. Now that is on top of a 48% drop in sales in Europe. Tesla hitting a new three-month low, cleared down to 267. It’s down another 6% today, and it’s breaking its 200-day moving average. Mr. Doge, we’ll be right back.
SPEAKER 04 :
And welcome back here to the final segment of today’s Best Docs Now show, March 25th, Tuesday.
SPEAKER 08 :
March 26th, Wednesday. You know, I can smell a mahi, blackened mahi Caesar salad coming my way. Maybe some fire-roasted oysters there from Owen’s Fish Camp. And how about that 1905 salad over at Columbia? That’s like my favorite salad, other than the Caesar salad in Tijuana, Mexico. I’m ready to go down to spend several days down in Sarasota, visit family, and meet with the folks for a couple days. I’ve set aside Tuesday and Wednesday, March 24th, 25th. We’re at the big Westin Hotel, that big white giant thing. It used to be the biggest thing in Sarasota, not anymore. Now it’s dwarfed by all of the condo. buildings all around it and this side and that side and all the circles traffic circles and i still love going down there and we’ve got a limited number appointments obviously in two days i still got to do the radio show etc but we are filling those days up go call us at 855-611-BEST 855-611-BEST for a spring break appointment with Bill Gunderson and whoever I take with me. It just depends. We’re going to just kind of play it by ear and see what happens.
SPEAKER 09 :
You’ve got to do some helping your sister out down there.
SPEAKER 08 :
Yep, got to help her out. She’s still displaced. It’s just incredible. She calls it flood zone limbo. So they have a rule. They assess the value of her house, which she knows what it is, and then the value and how much it costs to repair it. And if you’re over 50%, then it’s got to go through the flood zone people. She says she’s not even anywhere near 50%. She shouldn’t even have to do this. She texted me this morning, I’m in flood zone hell. Luckily, her neighbor had a place for her to stay. And, of course, our family has helped her out and whatnot. But what a mess. Just a mess. The bureaucracy. I get sick of all of that. But we’ll be there. Call us at 855-611-BEST. We meet with you 30, 45 minutes, whatever it takes. And just give you our feel for what we could possibly do for you. And again, 855-611-BEST. Okay, now the next story that I’m going to talk about here is the… Now, even though Tesla is hitting a new three- or four-month low, it’s a top pick at Morgan Stanley amid its AI and robotics metamorphosis. Well, you know, we’re out of Tesla, and we sold it quite a while ago, and it’s gone down considerably since then. But, you know, the other side of that is what makes a market a market is there’s people that like it and there’s people that don’t like it currently. And Morgan Stanley really likes it right now. Maybe they’ve got a big position in it and they’re kind of embarrassed that it’s gone down so much and they’re trying to defend it. I don’t know. But it’s still a top pick at Morgan Stanley. So there’s two sides to every tortilla. Lockheed reveals a low-cost $150,000 cruise missile. Amid geopolitical shifts, defense contractor Lockheed has unveiled, what do they have, an annual missile show or something? They show off the latest missiles, a common multi-mission truck, a new low-cost cruise missile. priced at $150,000 with the range exceeding 500 miles. I just, like I say, you know, I hope these aren’t in the hands of the drug cartels. Would they use them?
SPEAKER 09 :
I don’t know. I grew up between two Air Force bases, and I had a buddy now. He’s an engineer out there and shoots guns. He’s paid to shoot design missiles and everything else out there. But, I mean, it’s pretty amazing in terms of what they can do, put it through a window, not blow up the building next to it.
SPEAKER 08 :
Well, they’re laser-guided. Yes, I mean, that’s a little scary, 500 miles. That’s for the cheap model. And CMMT is a subsonic, low-cost, long-range missile. What was the price again? Just $150,000. Low cost. Okay. Because the JASM, the Joint Air-to-Surface Standoff Missile, is $1.5 million every time you fire one of those. It’s ten times the cost. Yeah. It’s an emergency strategy dubbed Affordable Mass, focusing on the available of budget-friendly armaments. Well, that’s a sign of the times. Budget-friendly armaments. I like it. Ah, the signs of the times, right? Salesforce launches agent exchange. You know, the software stocks just don’t look very good right now. I’m sorry. I sold Salesforce at $310.76 a while back, and today it’s $284.83. So you do have to have defense. You can’t just watch things get clobbered. There has to be a defense involved also. And the last one I’m going to talk about today is Target. Target is bemoaning the effects that, obviously, that tariffs would have on them. If you’re selling mostly goods from China, there’s going to be a price hike for the consumer, and the consumer may balk and say, well, I’m not going to buy them anymore at that price. So that’s the other side of this whole thing. Target hitting a new 52-week low. Do you know Target’s now trading at just 11 times forward earnings? Eleven times forward earnings. They’re expected to make $10.23 next year. Stock’s trading at $113, so do the math. And yet the stock is plunging. It’s down 6.2% to date, despite… A pretty strong full-year profit outlook and a decent earnings report. The other one that’s reported today is AutoZone. Let’s go through them very fast. They’re having a good day. They’re up a little bit. Nordstrom’s JWN, which is going private. It’s up $0.03 today. Walgreens, they’re going private too.
SPEAKER 09 :
Walgreens were up 4% or 5%. I think they’re going to go for $10 billion. Wow, they were in the Dow.
SPEAKER 08 :
Now that’s pretty much a small cap stock that they’ve become. Last but not least is Best Buy. Best Buy is also plunging down 13.4% as they’ve got a model that has been disrupted big time by Amazon. When’s the last time you went to a Best Buy to pick up a part, a mouse, or something, instead of just going on Amazon and having it delivered to your door? Our nearest Best Buy is like 25 miles from here, Barry, through lots of traffic. Well, okay. Get four-week trial. Help me guide you through some very turbulent markets right now. Go to GundersenCapital.com to make an appointment with us in person in Sarasota or via the telephone, 855-611-BEST. 855-611-BEST. Have a great day, everybody.
SPEAKER 07 :
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.
