Category Penny Stocks

Tom Yeung here with today’s Smart Money. 

Car designers all know it’s hard to have everything all at once.

In 2011, Nissan attempted to produce the world’s “first all-wheel drive crossover convertible.” It combined a sedan, SUV, and sports car into a single vehicle.

When designers add too much to a single car 

The result was the Murano CrossCabriolet – a vehicle so terrible it won CNN’s award for the “most disliked car” of the year. Car and Driver magazine noted the SUV portion added weight and height that caused a “frightful lack of grip.” Meanwhile, a reviewer at the Jalopnik website noted how the convertible aspect meant you “can’t see anything smaller than a fire station” with the top raised.

Nissan discontinued the car several years later.

Investing is usually the same way. Everyone knows that 1) high growth, 2) high-profit companies bought at 3) low prices are the key to success.

Warren Buffett bought Apple Inc. (AAPL) in 2016 when it was trading for just 11X forward earnings. It eventually netted his firm $120 billion in profits.

Eric helped his readers gain 1,350% in only 11 months from another “triple threat” firm back in 2021 – copper and gold miner Freeport-McMoRan Inc. (FCX).

But it’s hard to find “triple threats” like Apple and Freeport that combine these three things into a single package. Most firms usually only satisfy one of the three criteria (or two if you’re lucky). And those fulfilling all three often have something terrible going on beneath the surface.

That’s why finding these triple-threat firms is one of the greatest joys in investing. It’s that “aha” moment when you realize why markets are completely wrong about a stock.

And it’s why Eric recently recommended to his Fry’s Investment Report members a company that embodies all three criteria. It’s a fast-growing AI stock that’s so high-performing that, as Eric says, if we pulled a brown bag over its logo, so that we did not know the company’s identity, its raw performance would be enough to tempt anyone to buy in.

But, before we get into this company, let’s consider some other AI firms that illustrate why finding these triple threats is so hard…

The “Single” Threat

Most AI stocks are much like Xometry Inc. (XMTR), a firm I recommended last March in the InvestorPlace Digest e-letter. Though shares of the company have since risen 20% (a splendid return by any measure), it only covers one of the three triple-threat criteria (growth) that top stocks should have.

Xometry is a 3D printing marketplace that uses AI software to match customers with producers. A small firm looking for a half-dozen parts can log onto Xometry’s site and get an instant quote for the order, no matter how complicated the piece might be. Even large customers benefit, since the digital marketplace can channel bulk orders to the cheapest producers.

That’s turned Xometry into a hypergrowth firm. Net profits are expected to flip from negative $2 million to positive $13 million this year, and then double twice over the next two years.

However, these fast-growing companies usually lack quality and value… and Xometry is no exception.

• Quality. Xometry has generated losses since its 2021 initial public offering, making it a tough company for conservative investors to swallow.
• Value. Shares trade at 110X forward earnings, more than five times the S&P 500 average.

That makes the Maryland-based firm a bit like a Maserati GranTurismo: a beautiful sports car, but one with a high price tag and significant reliability issues.

So, what does a “double” threat look like instead?

Two Out of Three

That brings us to Arm Holdings PLC (ARM), a British chip designer whose TK market share makes Nvidia Corp.’s (NVDA) 90%market share in GPU-embedded servers seem low.

Arm is a 35-year-old firm that runs 99% of all smartphone CPUs. It has pioneered supremely power-efficient chip architecture, and its designs are a “must-have” wherever energy is at a premium. That includes virtually any battery-powered electronic device, such as laptops, Internet of Things (IoT) devices, and self-driving cars. Its designs are also increasingly found in data centers to help reduce power consumption.

The “must-have” nature of Arm’s architecture has translated into generous royalty payments… at least for Arm and its shareholders. Its latest v9 architecture charges a 5% fee on final sale value on top of regular licensing fees. So, if Apple sells an iPhone 16 Pro for $1,199, 5% of that higher value (rather than the lower $485 cost of building the phone) goes straight to Arm. The British firm generates over 40% returns on invested capital.

Arm’s AI ambitions have additionally turned the company into a hypergrowth firm. It is pushing ahead with power-efficient AI accelerators for both battery-powered devices and servers, and analysts expect profits to rise 25% on average over the next three years.

However, this great news comes with an eye-wateringly high price tag, making the stock prone to selloffs. Shares trade at 61X forward earnings (despite having a slightly slower growth rate than Xometry).

By that metric, it’s twice as expensive as Nvidia.

Indeed, Arm’s stock plummeted 12% on May 7 despite an earnings beat, because management forecasted that sales would “only” grow 12% next quarter to $1.05 billion. (It has since regained two-thirds of that selloff.)

That’s why neither Eric nor I recommend shares of this high-priced AI “supercar.” It’s simply too expensive in this current market.

The “Real” Triple Threat

So, what does a company that “has it all” look like?

Consider Corning Inc. (GLW), a current holding in Fry’s Investment Report.

Corning is an upstate New York firm that’s developed high-end glassware since 1851. It invented Pyrex in 1915, low-loss fiber optic cable in 1970, and the iPhone’s “Gorilla Glass” in 2007.

Today, the firm is a leader in liquid-crystal display (LCD) panels, smartphone screens, and the fiber optic cable used in broadband connections. It’s an upmarket manufacturer that’s survived outsourcing and offshoring thanks to decades of innovation.

Perhaps most excitingly, Corning also manufactures the high-end fiber optics used in data centers to link servers. This essential technology allows AI-focused data centers to send more data across tighter spaces. It’s become one of Corning’s greatest growth drivers.

Meanwhile, Corning’s profitability is excellent. The company has earned positive operating earnings for the past two decades (even through two recessions), and analysts expect return on equity (ROE) to surge to 17% this year – roughly twice as high as market averages. Corning’s shares additionally trade at just 19X forward earnings – below the S&P 500 average of 20.2X.

Now, you obviously might think there must be something wrong. How can a firm have it all without secretly being a Murano CrossCabriolet? And you’d be right to worry.

Corning supplies many of the world’s top TV makers, which are now facing enormous tariffs on exports to the United States. Public funding for broadband expansion may also get cut in the upcoming federal budget. Both factors have contributed to a 15% selloff since February.

However, it’s becoming increasingly clear that the market’s “sell first, ask questions later” approach has turned Corning into an irresistible “Buy.”

Ninety percent of its U.S. revenues are generated by products made in America, and 80% of its sales in China are made in China. The direct impact of tariffs should remain under $15 million – a rounding error relative to Corning’s $2.8 billion in expected pretax profits this year.

Corning also plans to create the first fully U.S.-made solar module supply chain. If successful, the project could help solar firms sidestep incoming tariffs on solar cells that could be as high as 3,500% if the U.S. International Trade Commission agrees with the Commerce Department’s proposals this June.

One More Triple-Threat Company

Corning’s data center connectivity products only nibble at the edges of the AI revolution. Eric’s other pick, the “brown bag” buy we mentioned earlier, is right in the center.

As Eric wrote in a recent Smart Money…

This “brown bag” buy competes directly against Nvidia Corp. (NVDA) in an industry that is brutally competitive and deeply cyclical. Because of factors like these, investors have been dumping the stock for months, despite the company’s superb operating performance and bulletproof balance sheet.

The company’s core operations are making rapid gains, especially its fledgling data center division. This critical division is growing at a blistering pace. Last year, its revenues nearly doubled and accounted for half of total company revenue.

In fact, Nvidia was almost bought by this forward-looking firm in the early 2000s.

The company is a major supplier of cutting-edge semiconductors, and it has very profitably become a major player in many facets of AI technologies.

And the company’s current share price has become too compelling to ignore.

You can learn how to access all about th8is “have it all, triple-threat” – and many of Eric’s other triple-threat plays – in Eric’s free, special broadcast.

You can click here for all of the details.

Until next week,

Tom Yeung

Markets Analyst, InvestorPlace 

Editor’s note: “Stay Ahead of Stock Market Volatility With An Outperforming Strategy” was previously published in February 2025 with the title, “An Outperforming Investment Tool to Help You Game the Market.” It has since been updated to include the most relevant information available.

For the past several months, since it became clear that Donald Trump won the U.S. presidential election, the stock market has been highly volatile. 

In that time, as we outlined in yesterday’s issue, we’ve seen:

• One of the fastest 10% drops in market history
  • Following the announcement of the “Liberation Day” tariffs on April 2, the S&P 500 sharply declined, dropping over 12.1% in the subsequent four sessions.
• One of the worst two-day crashes
  • On April 3-4, the market suffered a 10.5% setback, marking the fourth-worst two-day stretch since 1950.
• One of the best single-day rallies
  •  Following President Trump’s announcement of a 90-day pause on recently implemented tariffs, the S&P surged 9.5% on April 9, marking its strongest one-day performance since October 2008.
• One of the best win streaks
  • On May 2, the S&P locked in its ninth straight day of gains – the longest winning streak in more than 20 years – rising roughly 10% over that stretch
• One of the highest readings for the volatility index
  • The CBOE Volatility Index (VIX), often referred to as the market’s “fear gauge,” nearly doubled over six months, reaching a reading of 27.86.

With all this volatility, investors are dying to know what the next four years will look like for stocks under “Trump 2.0.” Is this unpredictability the new normal?

Possibly… 

I have six words of advice for this era: embrace the boom, beware the bust. 

Embrace the Boom; Beware the Bust

Thanks in large part to the AI investment megatrend, the U.S. stock market has been booming for the past two years. 

That is, the craze around artificial intelligence has sparked an exceptional surge in investment. Companies have been racing to create the infrastructure necessary to support next-gen AI. Indeed, Meta (META), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL) – pretty much all the world’s major tech companies continue to spend billions upon billions of dollars to build new AI data centers, create new applications, hire more engineers, etc. And all that investment has created a major economic boom.

The result? Stocks have been soaring for two years. 

From its lows in October 2022 to its peak in early February, the S&P 500 surged more than 70% higher. That is a stellar rally. And it was powered by two consecutive years of greater than 20% gains across the market. 

The S&P rose 24% in 2023. It popped another 23% in ’24. That is just the fourth time since the Great Depression – nearly 100 years ago – that the index rallied more than 20% in back-to-back years. 

We were unequivocally in a stock market boom. 

And in our view, this boom is about to get even ‘boomier.’ 

A product is emerging that is so powerful, it is already threatening trillion-dollar companies.

And almost no one is using it yet.

That’s the dynamic we saw play out this week.

This week, Apple executive Eddy Cue testified in the Justice Department’s antitrust case against Google owner Alphabet. According to news reports, Cue testified that Apple is “actively looking at” adding AI as an alternative to search.

The reason why is in the numbers. Searches on Apple’s web browser Safari fell for the first time last month, he said. Cue said the decline was caused by users increasingly relying on AI, according to Bloomberg News. Google pays an estimated $20 billion annually to be the Safari default search engine.

On Wednesday, Alphabet shares closed down 8% on the news.

We’ve written plenty in the Digest about AI and why it’s going to be a major disruptor to every industry sector, including big tech.

But that’s only half the story this week.

You may have heard predictions about how AI will change the American workplace. In March, Microsoft founder Bill Gates predicted that advances in AI will render humans unnecessary for most things in the world.

But we’re not close to that … yet.

Recently, abundance of news stories and surveys make it clear that very few American workers are using AI.

A Pew Research survey published in February found that only about 16% of American workers are doing at least some of their jobs with AI.

Another 63% say they don’t use AI much or at all in their job; and 17% reported that they have not heard of AI use in the workplace.

What’s the takeaway?

We’re still very early in the AI megatrend … but the future is coming at you fast.

No Turning Back From the AI Revolution

Quotes like the one from Gates above make good headlines and often frighten people about the future.

But as the Pew Research survey shows, we’re nowhere near the point of mass adoption of AI tools.

Investors such as Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, have warned that an “AI bubble” will burst like the dot com bubble. Jeremy Grantham, co-founder of investment management firm GMO LLC, who famously predicted the dot-com bubble burst, has said it will likely “deflate.”

Those outcomes may happen. But one thing is certain…

The non-AI economy is disappearing.

You can either invest in it or be left behind.

Our own in-house investing legend Louis Navellier makes a similar point to his Growth Investor subscribers.

When ChatGPT launched, the AI tool could only answer questions based on its training data, which was up to September 2021. Plus, it had a bad habit of making up facts when it didn’t know the answer – what we now call AI “hallucinations.”

Still, it was a revolutionary tool. More than 1 million people used ChatGPT in the first five days.

And the world hasn’t been the same since.

Fast-forward to March 2023, when GPT-4 rolled out. The AI tool could pass the bar exam, scoring in the 90th percentile. According to some studies, it could also pass medical exams, outperforming med students with ease.

The growth and acceleration of AI have only continued since then. And today, we find ourselves at a moment I call the Economic Singularity.

This is the moment when AI crosses a threshold and makes most human labor economically irrelevant.

Regular Digest readers know that Louis is a classic “quant.” He uses data and high-speed computers to identify fundamentally superior stocks that have the institutional buying pressure to push them higher.

So, when he selects stocks in a megatrend, it’s based solely on data – not hunches or gut-feels.

A good example came this week with earnings announcements from AppLovin Corporation (APP).

If you don’t know the stock, APP targets the more than 1 billion people who play mobile games. Specifically, the company owns and operates an AI platform that provides advertising to mobile gamers.

The ads aren’t just for other games. Their AI platform is now expanding into broader industries such as e-commerce, fintech, healthcare and entertainment.

And they posted blowout earnings this week. Here’s Louis writing in Growth Investor:

Shares of AppLovin Corporation (APP) soared higher on Thursday after the company posted blowout earnings and revenue for its first quarter. Total revenue increased 40% year-over-year to $1.48 billion, besting estimates for $1.38 billion. Advertising revenue jumped 71% year-over-year to $1.16 billion

First-quarter earnings surged 144% year-over-year to $576.42 million, or $1.67 per share, compared to $236.18 million, or $0.67 per share, in the first quarter of 2024. Adjusted earnings per share came in at $2.38, topping estimates for $1.96 per share. So, AppLovin posted a 21.4% earnings surprise.

Click here to find out more about what Louis is calling the Economic Singularity.

AI Winners Beyond Tech Stocks

On Thursday, Bloomberg published a story about how the data centers that help power AI are increasingly in water-resource-scarce areas.

The data centers that help power AI need high volumes of water to cool hot servers, and, indirectly, to help generate the electricity needed to run the centers.

From the Bloomberg report:

Even before ChatGPT launched in late 2022, communities complained about data centers guzzling up millions of gallons of water every day from cities that didn’t have all that much to spare. The problem has only deepened in the years since ChatGPT kicked off an AI frenzy.

More than 160 new AI data centers have sprung up across the US in the past three years in places with high competition for scarce water resources, according to a Bloomberg News analysis of data from World Resources Institute, a nonprofit research organization, and market intelligence firm DC Byte. That’s a 70% increase from the prior three-year period.

The story goes on to detail how data centers and tech firms are starting to deal with the problem while acknowledging that demand is only going to grow.

This trend offers an investing example beyond the obvious demand for more data centers.

All investors want to grow their wealth, but often, the most successful investors identify opportunities based on future economic needs that come to fruition.

For example, most investors are familiar with the story of Levi Strauss. During the California Gold Rush, it wasn’t most miners who grew wealthy—it was Strauss, who sold them the durable pants they needed to mine the gold.

In today’s AI boom, Eric isn’t chasing the most obvious chipmakers. He’s looking deeper—at the water flowing through the server farms—and not long ago, he made an important tech-adjacent call.

Eric noted in his New Manhattan Project report in Eric Fry’s Investment Report that water handling businesses have a tailwind based on this new technology, as well as in an old one.

Here is what he wrote about his pick, Aris Water Solutions Inc., (ARIS):

ARIS is an emerging leader in the water-handling business for the oil & gas industry. As I detailed in the October issue of Fry’s Investment Report, Aris has developed an extensive water infrastructure in the Delaware Basin of West Texas.

The company also has permits in place to expand the scope of its operations significantly. This growing network of water-handling facilities is generating solid earnings growth for Aris.

But the company’s growth curve could ramp higher over the coming years, thanks to a prospective, new “data center alley” in West Texas. Since data centers require prodigious volumes of water to cool themselves, Aris’ advanced water treatment capabilities could attract robust demand from the tech companies that might build centers in the region.

This is a great illustration of the global macro investing perspective Eric has. He leans on the world’s megatrends, but his focus is narrow. It’s not enough to simply say “invest in AI.” Eric considers all the economic/investment ripples originating from the trend.

ARIS is up 25% since Eric picked it in October, even amid the market volatility.

Eric believes that, like the Manhattan Project, the AI race is a high-stakes competition to develop a powerful technology of weaponization. And, like the Space Race, it’s also a race to control a limitless frontier.

Here’s Eric describing the stakes.

The stakes could not be higher. AI is a technology that has the potential to create, or destroy, on a scale that humanity has never before encountered. That’s why the U.S. will be pursuing an all-hands-on-deck strategy to master AI’s capabilities before anyone else does.

That’s why I believe we’re about to see a massive partnership between the U.S. government and the private sector that could shower the AI industry with trillions of dollars in new investments.  

You can learn more about Eric’s stocks for the New Manhattan Project by clicking here.

AI isn’t everywhere yet, but adoption rates are rising.

Savvy investors will want to get in early to ensure they can maximize their returns and not get caught flat-footed when mass adoption occurs.

Enjoy your weekend.

Luis Hernandez

Editor in Chief, InvestorPlace

Charlie’s got a gold watch
Don’t seem like a whole lot
After thirty years of driving up and down the interstate
But Charlie’s had a good life
And Charlie’s got a good wife
And after tonight she’ll no longer be counting the days

Eighteen wheels and a dozen roses

The song “Eighteen Wheels and a Dozen Roses,” by Kathy Mattea is about a truck driver who is retiring. After 30 years on the road, he’s coming home to his wife, where they’ll trade the semi-truck for a Winnebago and head off to see the country together.

It’s a classic staple of a distinct sub-genre of country music that’s about as American as apple pie: the truck-driving song.

But that song hits differently in 2025 than it did in 1988 – especially after the latest self-driving car news.

Because today, that romanticized dream of a long, steady, good-paying career, followed by retirement, is under threat.

In today’s Market 360, I’ll discuss why the latest development in the race to self-driving vehicles is a game-changer – and also potentially devastating news for millions of Americans. I’ll detail exactly what’s going on, and how this is a part of a much bigger shift… and what you can do to prepare and profit.

Hit the Road, Jack

Last Thursday, Aurora Innovation Inc. (AUR) became the first company to launch a fully commercial, self-driving trucking service in the United States.

Aurora’s autonomous semis are now running driverless deliveries between Dallas and Houston. These are not test runs – these are revenue-generating operations happening on public highways, right now.

According to TechCrunch, Aurora has completed 1,200 miles in a single self-driving truck without a driver so far.

Their system, called Verifiable AI, uses radar, lidar, cameras and sensors to assess road conditions and execute driving decisions. The tech is even built with “invariants” – hard-coded rules the truck must follow, like stopping at red lights or staying in its lane.

Here’s more from TechCrunch:

Aurora’s plan is to start its driverless trucking operations by owning, maintaining, and insuring its own trucks for customers. The company is working with its strategic partners Volvo Trucks and Paccar to develop self-driving trucks for high-volume manufacturing. Aurora expects its customers to buy those trucks directly from manufacturers starting in 2027 or earlier.

Uber Freight is already a client. And by the end of the year, Aurora expects to expand its driverless routes to El Paso and Phoenix.

And just like that, after years of talk… years of trial and error… AI-powered autonomous semitrucks are officially on our roads.

Your Services Are No Longer Required

Now, this rollout won’t happen overnight, but it will happen sooner than you think.

The implications of this technological leap are profound.

All of a sudden, we’re talking about a potential pink slip for every long-haul driver in America.

That’s a chilling thought.

Trucking is one of the most common occupations in the U.S. As of the latest data, there are roughly 3.5 million truck drivers in America.

The average full-time trucker earns around $52,000 per year.

For high school-educated men, it’s one of the single most common jobs in the country.

Some, like experienced owner-operators, earn a lot more, well into six figures. Walmart Inc. (WMT) offers up to $110,000 for new drivers in their first year.

Now, imagine what happens when driverless tech expands coast to coast.

You’re talking about stripping millions of working-age men (and women) of their jobs. Their dignity.

It’s the kind of thing that tears families and societies apart.

Revolutions have started over things like this, folks.

What Happens When Every Job Is on the Line?

Now, I don’t say this to scare you,  but rather to warn you of what’s ahead.

Because whether you work on a factory line making cars or behind a desk writing code, the ground beneath your feet is starting to shift. You may have even already felt it.

Slowly but surely, working people are being told their services are no longer needed. Not because they aren’t willing to show up. Not because their work isn’t quality.

But simply because AI is cheaper, faster and in many cases, better.

Also, AI doesn’t take days off. It doesn’t ask for raises, either.

The early signs are everywhere, folks.

Factory lines that once needed 50 workers now run with five. But it’s not just blue-collar jobs. The hidden truth is that the AI layoff wave stretches across every major sector of the economy.

Take the tech sector, for example. Between 2022 and 2024… 

• Meta Platforms, Inc. (META) eliminated 21,000 positions 
• Amazon.com, Inc. (AMZN): 27,000 
• Alphabet Inc. (GOOG): 13,000 
• Microsoft Corporation (MSFT): 16,000…  

It’s not just tech, either. AI is already coming for accountants, paralegals, designers, analysts – even doctors.

And it’s accelerating.

While workers face career displacement, the companies providing AI technology are experiencing explosive growth. In 2024 alone, NVIDIA Corporation (NVDA) added more than $2 trillion in market value, a windfall created by the same chips that are erasing people’s paychecks.

This is what I call the Economic Singularity.

It’s the moment when AI crosses a threshold and makes most human labor economically irrelevant.

Let’s be clear. I’m not talking about a robot uprising, like you’ve seen in the movies.

I’m talking about a systematic, top-down reshaping of the economy. One where millions are left behind while a few at the top reap the rewards.

It will rewrite the social contract between companies and employees, governments and citizens.

And it’s already underway.

Get on Board, or Get Left Behind

Here’s the reality: AI is building dynastic wealth for tech company executives and shareholders even as it erases household income for workers. 

While workers face career displacement, the companies behind AI are raking in record profits.

That growth was driven by the very same chips that are now enabling companies to replace people with machines.

The numbers back this up.

McKinsey’s 2024 State of AI report says 65% of companies now use generative AI (AI that’s capable of creating original content, analysis and decision making) in at least one core business function.That’s nearly double the 33% reported in the previous survey from April 2023, just 10 months earlier.

And here’s the kicker: McKinsey estimates this tech could unlock $2.6 trillion to $4.4 trillion in annual value, mostly in customer service, banking, retail, logistics and software development.  

So, yes, what’s coming is a profound, fundamental shift in our economy. But it’s also an incredible opportunity. And because of that, it’s practically inevitable, folks.

The Choice Ahead

So what do you do in a world like this, where AI is reshaping every corner of the labor market and changing the rules for who gets ahead and who gets left behind?

We can either choose to ignore it… or prepare and profit. 

Let me be crystal clear: You need to get positioned on the right side of the Economic Singularity.

Because while this technology is displacing millions of jobs, it’s also creating an enormous opportunity for investors who understand where the money is flowing.

AI isn’t going away. And frankly, trying to fight it is a losing battle. But learning how to profit from it? That’s a different story, folks.

That’s why I’ve put together a full video briefing on what’s happening.

In it, I’ll tell you more about the companies at the forefront of this transformation – firms already seeing exponential growth as the Singularity unfolds.

These are the kinds of businesses that can turn this economic upheaval into serious long-term wealth.

Click here to watch the full presentation and see how you can position your portfolio now.

Sincerely,

Louis Navellier

Editor, Market 360

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

NVIDIA Corporation (NVDA) and Walmart Inc. (WMT)

Trump suggests lower tariffs on China … more AI-based layoffs … labor force pain “gradually then suddenly” … Eric Fry is eyeing nuclear power … cute tiger cubs

Let’s begin with the latest trade war chatter.

This morning, President Trump floated the idea of dropping the 145% tariff on China to 80%, while also hinting at additional deals on the way.

From Trump on Truth Social:

80% Tariff on China seems right! Up to Scott B.

Many Trade Deals in the hopper, all good (GREAT!) ones!

While lower, an 80% tariff would still largely be prohibitive to trade.

On that note, today, the first cargo ships carrying Chinese products hit with the 145% tariff arrived at Los Angeles ports. According to the port’s executive director, Gene Seroka, the volume of cargo on these ships has fallen by more than 50%.

Here’s Marine Insight:

Initially, 80 ships were scheduled to arrive in Los Angeles during May, but about 20% of those have already been cancelled.

Another 13 sailings for June have also been scrapped, a clear sign of businesses pulling back from sourcing goods from China due to cost concerns.

Flexport CEO Ryan Petersen explained that some retailers are opting to store goods in Chinese warehouses instead of bringing them to the US, as the storage costs are now lower than the import taxes.

Petersen estimated that if this continues, there could be a 60% drop in deliveries.

If/when too many deliveries disappear and the current inventory glut in U.S. warehouses dries up, that’s when we’ll face higher prices.

All eyes are on Treasury Secretary Scott Bessent and his negotiations with Chinese officials taking place in Switzerland this weekend.

We’ll report back on Monday.

On Wednesday, Cybersecurity company CrowdStrike announced it is cutting 500 jobs – roughly 5% of its workforce

Here’s MarketWatch with the explanation:

[Behind the layoffs is] both the security threat posed by artificial intelligence and the growing use of AI to move faster and operate more efficiently.

On Tuesday, The Wall Street Journal reported a similar story from tech blue blood IBM:

International Business Machines Chief Executive Arvind Krishna said the tech giant has used artificial intelligence, and specifically AI agents, to replace the work of a couple hundred human resources workers. 

And just a few days ago, language-learning app Duolingo unapologetically cannonballed into AI. From TechCrunch:

Duolingo announced plans this week to replace contractors with AI and become an “AI-first” company — a move that journalist Brian Merchant pointed to as a sign that the AI jobs crisis “is here, now.”

Meanwhile, in January, a World Economic Forum (WEF) survey found that 41% of employers plan on downsizing their workforce over the next five years as AI automates certain tasks.

And here’s more color from the International Monetary Fund:

In advanced economies, about 60 percent of jobs may be impacted by AI.

Roughly half the exposed jobs may benefit from AI integration, enhancing productivity. For the other half, AI applications may execute key tasks currently performed by humans, which could lower labor demand, leading to lower wages and reduced hiring.

 In the most extreme cases, some of these jobs may disappear.

What are we to make of all this?

Well, we’re not yet at the tipping point of AI’s economic creative destruction, but it’s coming.

“Jeff, stop right there. No fearmongering. If AI is such a job threat, explain why our unemployment rate remains at just 4.2%”

Well, first, while high-profile companies like IBM and CrowdStrike are making AI-related cuts, they represent a small slice of the overall labor market. Most AI-related layoffs so far have hit white-collar or tech jobs that are only a portion of the broader workforce.

Plus, job losses are being offset by new jobs in areas like healthcare, construction, hospitality, and transportation, which aren’t as vulnerable to AI… yet. For example, so far in 2025, service sector job growth has remained solid.

Next, many laid-off workers are finding new roles, often in companies adopting AI but needing people to manage, prompt, or train the systems. In other words, for the time being, AI is being used to augment rather than replace workers. So, many companies are restructuring workflows rather than eliminating full positions.

But let’s be clear…

This is a phase. It’s a temporary evolution point – not an end point.

An analogy comes from Ernest Hemingway’s novel “The Sun Also Rises.” When asked how he went bankrupt, a character replies, “Two ways. Gradually, then suddenly.”

The problem with “Jeff, stop fearmongering” is that is focuses on the “gradually” that’s here today, rather than the “suddenly” that’s coming tomorrow.

Legendary investor Louis Navellier has been researching this transition from a cultural, economic, and investment perspective

It was through Louis and his team that I was introduced to the term “double exponential.”

Originally used (in the context of technology) by futurist Ray Kurzweil, author of “The Singularity is Near,” the term describes the idea that technological progress doesn’t just follow a single exponential trend but often accelerates at an even faster rate.

“Double exponential” growth means that not only is the growth rate increasing, but the rate at which it increases is also accelerating.

Here’s Louis tying this idea to our economy and labor market:

Today, we find ourselves at a moment I call the “Economic Singularity.”

This is the moment when AI crosses a threshold and makes most human labor economically irrelevant.

We’re past the point of no return. AI is improving itself now. It’s creating its own agents. And writing its own code.

What comes next?

In short, the biggest transformation of wealth and labor in human history…

Folks, I know this sounds dramatic, but I’m telling you straight.

It’s the way innovation works. It happens slowly at first… and then, all of a sudden, everything is different.

To Louis’ point about human-labor irrelevancy, let’s check in on a key economic “canary in the coal” mine: software developers.

For years, these tech hires commanded fantastic salaries as they wrote the code that powered our cutting-edge software products. This was a next-gen, in-demand career.

With this context, let’s jump to Anthropic CEO Dario Amodei from March:

If I look at coding, programming, which is one area where AI is making the most progress – what we are finding is that we’re 3 to 6 months from a world where AI is writing 90% of the code.

And then in 12 months, we may be in a world where AI is writing essentially all of the code.

Louis makes an important point: You don’t have to like this change – but you must choose how you’ll respond to it.

To help investors safely cross this AI Rubicon, Louis just released a new batch of research.

As part of it, there are four special reports covering )1 the top stocks for this age of the Singularity, 2) which physical AI (think “humanoids/robots”) to buy today, 3) a “Complete Portfolio Protection” Plan, and 4) how to find pre-IPO, potential Unicorn AI investments before they’ve gone public.

You can learn more about accessing all this by clicking here.

By the way – be sure to catch tomorrow’s Digest by our Editor-in-Chief and co-Digest writer Luis Hernandez. He names one of Louis’ recent AI picks.

Here’s another idea for AI preparation, courtesy of our macro expert Eric Fry

As we’ve been hammering home in the Digest for months, AI consumes enormous volumes of energy. This demand will only increase as AI continues to integrate seamlessly with our day-to-day lives. We’ve urged investors to get exposure to the broad AI datacenter ecosystem that powers this demand.

Eric has been positioning his readers for this for many months in his flagship newsletter Fry’s Investment Report.

Let’s jump to his update from Wednesday:

Artificial intelligence relies on data centers to handle its computational needs. AI requires immense amounts of processing power for training and running large language models (LLMs), and data centers provide this power.

But there’s a problem: As we get further and further down the Road to Artificial General Intelligence (AGI), the technology demands such spectacular volumes of electric power that existing sources are not able to provide enough.

During the last three years alone, the combined electricity consumption of data center giants like Amazon.com Inc. (AMZN), Meta Platforms Inc. (META), Microsoft Corp. (MSFT), and Alphabet Inc. (GOOGL) soared more than 80%.

That explosive growth is certain to continue.

This shortfall is an opportunity for investors who know where to look. So, where’s Eric looking?

Nuclear energy.

On Wednesday, nuclear developer Elementl Power reported that it signed an agreement with Google to develop three sites for advanced reactors.

This comes on the heels of Google’s deal announced in October with Kairos Power, a developer of “small modular reactors” (SMRs).

Plus, Eric notes that around the same time that Google inked its deal with Kairos, Amazon announced that Amazon Web Services (AWS) is set to invest more than $500 million in nuclear power.

And in September, Microsoft made a deal with Constellation Energy Corp. (CEG) to restart a reactor at the infamous Three Mile Island nuclear facility.

With this background, here’s Eric:

This new high-profile demand for nuclear power from Big Tech and, sooner than we think, AGI could accelerate growth and profitability in the uranium industry.

To capitalize on that potential, I recommend investing in what’s turning into one of the “soundest” plays in the stock market: the uranium sector.

One name for your research that Eric mentions is Cameco Corp. (CCJ), one of the world’s largest uranium producers.

It has high-grade assets such as the McArthur River and Cigar Lake mines that offer significant cost advantages over competitors. Plus, it has a 49% stake in Westinghouse Electric, giving it exposure to the growing demand for SMRs, which Eric highlighted a moment ago.

I’ll also note that CCJ is in the middle of a blistering rally. Since April 9, it’s exploded 36%.

Other ideas for your research include Uranium Energy (UEC), Energy Fuels (UUUU), and Centrus Energy Corp (LEU).

For more on the specific way Eric is investing in Investment Report, click here to learn more about join him. He recently recommended a unique energy play that should be a direct beneficiary of snowballing AI adoption.

Wrapping up, if you remain skeptical about the significance of AI and the need for preparation…

Then I’d point to comments from the “Godfather of AI,” Geoffrey Hinton, made less than two weeks ago.

If you’re less familiar with Hinton, he earned his nickname due to his groundbreaking work in artificial neural networks, particularly his contributions to the development of deep learning.

From Hinton in his recent CBS interview:

People haven’t got it yet. People haven’t understood what’s coming…

The best way to understand it emotionally is we are like somebody who has this really cute tiger cub.

Unless you can be very sure that it’s not gonna want to kill you when it’s grown up, you should worry.

A tweak on Hinton’s comments…

Let’s not worry – that’s pointless and accomplishes nothing. Instead, let’s be deliberate about preparation.

On a general basis, there’s a limit to what that means. But from an investment perspective, there are plenty of moves we can make today to shore up our economic vulnerability.

If you haven’t done so yet, carve out some time to dig into how you’re preparing for AI today.

Have a good evening,

Jeff Remsburg

Editor’s Note: On Wednesday, the Federal Open Market Committee (FOMC) chose to keep interest rates steady. I’m personally perplexed by this, since the latest inflation data shows it’s cooling down.

But my colleague, Luke Lango, sees a summer rally approaching – and he’s built an easy-to-use quant tool that you can use to profit. Every month, he’ll tell you what stocks to buy and sell based on a number of factors, including growing revenue, trending upward and gaining analysts’ attention. As a numbers guy, this is something I can get behind.

The tool is called Auspex, and you can learn more about it by clicking here.

Now, I’ll let Luke explain more about the summer rally that is fast approaching…

********************

Everyone was expecting fireworks on Wednesday afternoon…

Here’s what I said on Wednesday, before the FOMC rate decision announcement and Fed Chair Jerome Powell’s press conference, in the Daily Notes I send my paid-up members …

Powell’s press conference will provide some much-needed clarity as to what the Fed will do in June. He will either sound dovish and open the door for a rate cut – which will send stocks soaring higher. Or he will sound hawkish and sound hesitant on cutting rates – which will send stocks plunging lower.

But instead, Powell and the FOMC were… nothing but damp sparklers.

They kept their benchmark rate unchanged, at a target of 4.25% to 4.5%. That was as expected. The fireworks were supposed to come from the Fed’s statement and Powell’s press conference.

However, Powell said the same thing he’s been saying for months.

“We don’t think we need to be in a hurry,” he said with regard to the potential for cutting rates. He said that there are cases where it would be appropriate to cut… or to stand pat.

The stock market’s response was damp as well. All three major indices ended the day less than a percentage point up from where they started.

No “soaring” or “plunging.”

And while that may be ho-hum news for set-it-and-forget-it index investors, it’s great news for self-directed investors.

So, let’s do a few things today…

Let’s review how we got here… and why I think we’re headed into a summer rally.

Plus, I’ll tell you why this will remain a stock picker’s market despite that rally.

Also, let’s take a peek at the quant tool my team and I built to help us find the best stocks in the market. It works in volatile times like these… and it will work even better once we get past them.

Plus, I’ll reveal one stock my tool and I picked that was a winner for us last month… and that we picked again this month.

This underappreciated “space economy” play is already blasting off and outperforming the market this month as well…

The Building Summer Rally

Stocks just endured one of the fastest and most violent crashes in modern history.

In early April, stocks plummeted 10% in just two days.

As a matter of fact, until last week, stocks were tracking for their third-worst year on record after dropping more than 12% in the first 74 trading days…

But then came the biggest comeback rally in the past 100 years.

Signs that the global trade war is rapidly deescalating blew strong winds into Wall Street’s sails – sparking a historic rally. And, just as fast as they crashed, stocks staged an epic rebound.

And, I believe, momentum is building.

Let’s start with May, when we expect the “trade dam” to break.

The pressure that’s been building since “Liberation Day” is finally forcing a breakthrough on the trade front. 

Over the past week, multiple White House officials have suggested that several trade deals are nearly complete – especially with key allies. We just heard about one with the United Kingdom Thursday morning, in fact (that lit off some fireworks).

We expect more of those deals to be announced in May.

They’ll do more than just ease tariffs. They’ll slam the brakes on inflation fears, cool the geopolitical heat, and give the Fed the economic clarity it’s been waiting for.

Then we’ll move into June, where two catalysts will converge – and ignite a major market rally.

First, we expect a terrible May jobs report. That’s good news. 

Weak jobs data will show the true employment cost of the “Liberation Day” tariff blitz, which began just after the last payrolls survey.

This will give the Fed every reason it needs to pull the trigger on its first rate cut of 2025 at the June FOMC meeting… or at least provide the sort of post-meeting fireworks we were looking for on Wednesday.

But that’s not all.

As trade deals are signed, pressure will mount on the U.S. and China to come to terms. We believe the nations will announce a framework deal, which would serve as the clearest sign yet that the trade war is winding down.

Then in July, we will get the final piece of the puzzle: tax cuts. 

We expect Congress to finalize a massive tax reform bill extending – and potentially expanding –the 2017 tax cuts. By then, lawmakers will have the cover to push this bill through.

These positive catalysts will lead us into the 2Q earnings season, which kicks off in mid-July. Those reports should reflect easing cost pressures, improved demand visibility, and a surge in forward confidence. As such, we expect strong earnings, better guidance, and reaccelerating growth.

But make no mistake…

The Stock Picker’s Top May Pick

This isn’t a “buy everything and hope for the best” market.

Volatility is the new norm. We’re living in the Age of Chaos

Traditional buy-and-hold strategies don’t work like they used to.

And so, my team and I have developed what we believe is the ultimate stock-picking engine — a quantitative, machine-driven screener that helps you get in, get out, and get paid month after month in this Age of Chaos.

It scans the market for the rarest type of opportunity – stocks that are simultaneously:

• Growing earnings, revenues, and margins.
• Trending up across short- and long-term technicals.
• Getting attention from both analysts and traders.

These are the strongest stocks in the entire market at any given moment.

Then my team and I make the final call on which of those stocks we recommend to our subscribers.

And we’ve stress-tested it.

Over the past five years, it could have returned 1,054% — outpacing the S&P 500 by more than 10X. Even in rough stretches, it’s been able to sidestep crashes and capitalize on rebounds. In 2024, from July through December, while the S&P barely moved, it could have delivered a 24.3% return.

This model doesn’t require you to perform hours of research or constant monitoring. Just 30 minutes a month is enough to follow its signals.

In April, one of the most volatile months in stock market history, the S&P 500 dipped into bear market territory and then clawed its way back out to a just under 1% loss.

At the same time, one of this tool’s picks was Howmet Aerospace Inc. (HWM). In April, it took off for a 13.4% gain.

Our proprietary stock screener picked this aerospace and defense component specialist again earlier this month… and we agreed. So far in May, HWM shares are up 6.2% (and the top performer in our portfolio). Meanwhile, the S&P is up less than 2%.

We took this tool out of the “lab” and started using it live in June 2024. Since then, we’ve put it to the test in 10 monthly portfolios.

And with results like I just showed you with Howmet, it’s no surprise that this quant screener has, in six of those months, handily beat the market… and tied it once.

To show you what else this tool can do, I’ve participated in an event where I show you a lot more about how this tool works. It’s free to viewers.

Go here to watch it now.

Sincerely, 

Luke Lango

Senior Analyst, InvestorPlace

Editor’s note: “How to Build Wealth in a Volatile Stock Market” was previously published in March 2025 with the title, “Beyond the Ups and Downs: Building Wealth in a Volatile Stock Market.” It has since been updated to include the most relevant information available.

The stock market has been on quite the roller coaster ride since Donald Trump was inaugurated as the 47^th President of the United States.

For about a month, stocks were flat. But it turns out that that was the calm before the storm.

With the threat of hefty tariffs looming large, investors feared that President Trump would ignite a global trade war and began selling stocks in droves. From mid-February to mid-March, the S&P 500 dropped 10% in 20 days. 

And, of course, upon the rollout of his “Liberation Day” tariffs, Trump did indeed start a global trade war on April 2. This sparked a 10% market crash in just two days – its fifth-worst two-day crash ever.

But just as fast as stocks crashed, they recovered.

When Trump issued a 90-day pause on tariffs just one week after they were announced, the S&P rallied 9.5% in a single day. Then, stocks rallied 13% in 17 days – including the market’s best nine-day win streak in 100 years – as Trump issued exemption after exemption on various tariffs. 

This has been arguably the most volatile and violent stock market ever. And given that Trump has been the trigger – and that he will be in the White House for the next four years – investors are naturally asking themselves:

Is this intense volatility Wall Street’s ‘new normal’?

It may be… 

A Bumpy Ride Higher: Why We Expect Stock Market Uncertainty to Continue

Don’t get me wrong. I think stocks are going higher over the next few years. 

We’re somewhere in the middle of the AI Boom. Tech booms like these tend to last five to six years or longer. Just look at the Dot Com Boom, which started in 1995 and lasted through 1999 – five years of strong gains. The Nasdaq Composite rose about 582% during that time, while the S&P nearly tripled. 

This AI Boom started in 2023. I think we have another two to three years of exceptional growth left in AI stocks. And that growth should drive the whole market higher.

However… I don’t think it’ll be a smooth ride higher…  

Largely because of U.S. President Donald Trump, who promises to change a lot of things. 

He wants to renegotiate trade deals and restructure global trade, rethink America’s global military presence, and cut federal spending. He wants to reduce taxes, expand America’s borders, and reshore manufacturing activity, among other things. 

Clearly, he aims to change a lot. 

Now, I won’t offer an argument as to whether these proposed changes are good, bad, or neutral. 

But I will state the obvious: It’s a lot of change. And change is uncomfortable – especially for investors… 

Because change equals uncertainty. That doesn’t mean this policy shakeup won’t push stocks higher in the long term. It may. 

It simply means that, along the way, stocks will continue to be volatile – just like they’ve been over the past few months.

President Trump announces a trade deal with the U.K.… more from Louis Navellier on the FOMC meeting … more reasons to take advantage of low oil prices … bitcoin pierces $100K, and $120K is on the way

The first trade deal is here, and Wall Street likes it.

This morning, President Trump announced a “full and comprehensive” trade agreement with the U.K., announcing the news with U.K. Prime Minister Keir Starmer dialing in from London.

Here are brief highlights:

• The U.S.’s new 10% tariff on U.K. goods will remain, though there will be some exemptions
• Tariffs on U.K. cars will fall to 10%
• The U.K. has committed to import more U.S. products, including agricultural goods and Boeing planes
• The U.S. will allow Rolls-Royce jet engines and parts to be imported without tariffs

Trump went on to say that the U.K. will reduce or eliminate nontariff barriers. They will also fast-track U.S. goods through customs, as the U.S. will do for U.K. goods.

From Trump:

The deal includes billions of dollars of increased market access for American exports, especially in agriculture, dramatically increasing access for American beef, ethanol and virtually all of the products produced by our great farmers.

From the U.K. perspective, Starmer sounded enthusiastic, saying:

This is going to boost trade between and across our countries, it’s going to not only protect jobs, but create jobs, opening market access.

According to Trump, the final details will be negotiated over the “coming weeks.”

Adding to the good news, the President indicated more deals are on the way. Before this morning’s press conference, Trump posted to Truth Social:

Many other deals, which are in serious stages of negotiation, to follow!

And in his Oval Office remarks this morning, Trump said his administration is now negotiating with the European Union over trade issues.

Wall Street is cheering the news.

As I write Thursday early afternoon, all three major indexes are up more than 1%, with the Nasdaq leading the way, up almost 2%.

This is certainly welcome news. We’re looking forward to the details of additional deals to come.

More on yesterday’s Fed announcement

President Trump’s morning activity on Truth Social wasn’t limited to referencing trade deals. He also lambasted Federal Reserve Chairman Jerome Powell following yesterday’s FOMC decision to hold interest rates steady.

From Trump:

‘Too Late’ Jerome Powell is a FOOL, who doesn’t have a clue. Other than that, I like him very much!

Trump went on to add that there is “virtually NO INFLATION,” arguing that “almost all costs” are down.

I suspect that – though he wouldn’t word it quite the same way – legendary investor Louis Navellier feels somewhat similarly.

Here’s Louis’ hot take from yesterday’s Flash Update Podcast in Growth Investor:

The bottom line is I’m very perplexed and frustrated by [the decision from Powell and the Fed] …

The Fed should have signaled that yes, we have to cut to fight deflation. But they’re not. They’re imagining a mythical inflation bogeyman…

Again, I’m very frustrated. 

Yesterday, our Editor-in-Chief and fellow Digest writer, Luis Hernandez, sat down with Louis for a deeper dive into his thoughts on the Fed’s decision. They also discussed our current Q1 earnings season, as well as Warren Buffett.

You can watch the interview by clicking here or by clicking the link below.

One more reason to give top-tier oil stocks a look today

On Monday, the price of West Texas Intermediate Crude (the U.S. benchmark) fell below $56.00. From top-to-bottom, prices have fallen 28% in 2025.

They’ve been sliding due to fears of a global economic slowdown lowering demand, as well as oversupply from OPEC+ waging war on oil-producing countries that have been cheating on production.

But as the old saying goes, “the cure for low prices is…low prices.”

The simple logic holds that low prices cure themselves by 1) discouraging new supply from producers, and 2) encouraging demand from consumers.

Here’s CNBC from Tuesday on the first point:

U.S. onshore oil production has likely peaked and will start to decline due to the recent plunge in crude prices…the CEO of Diamondback Energy told shareholders in a letter this week.

Adjusted for inflation, there have only been two quarters since 2004 when front-month oil prices have been as cheap as they are now, excluding 2020 when the Covid-19 pandemic swept the world, Diamondback CEO Travis Stice wrote.

“Therefore, we believe we are at a tipping point for U.S. oil production at current commodity prices,” Stice warned the company’s shareholders in a letter published Monday.

“It is likely that U.S. onshore oil production has peaked and will begin to decline this quarter.”

Stepping back, let’s remember how this cycle works…

The oil industry follows a boom-and-bust cycle driven by supply and demand dynamics.

When oil prices are high, producers ramp up output, leading to an oversupply. This oversupply eventually causes prices to fall, which forces higher-cost producers to cut back or shut down, reducing overall supply.

As supply tightens, prices rise again, attracting new investment and production – ultimately repeating the cycle and often resulting in another glut.

This self-reinforcing loop has played out repeatedly over decades in global energy markets.

Today, we’re in the oversupply phase. But we’ve known this, and we know what follows.

Let’s rewind to our 9/20/24 Digest. We’ll pick up quoting CNBC:

The oil market will face a supply shortage by the end of 2025 as the world fails to replace current crude reserves fast enough, Occidental CEO Vicki Hollub told CNBC on Monday.

About 97% of the oil produced today was discovered in the 20th century, she said. The world has replaced less than 50% of the crude produced over the last decade, Hollub added.

“We’re in a situation now where in a couple of years’ time we’re going to be very short on supply,” she told CNBC’s Tyler Mathisen…

For now, the market is oversupplied, which has held oil prices down…

But the supply and demand outlook will flip by the end of 2025, Hollub said.

With Diamondback’s CEO signaling we’re past peak U.S. production, it appears we’re on pace for the supply/demand balance to flip over the next year as expected.

Now, might oil and stock prices fall further from here?

Of course. If you invest today, be prepared for that.

But we believe the wiser question that longer-term investors should ask is “looking back in, say, 24-36 months from now, will hindsight prove that today’s prices were profitable entry-points in top-tier oil stocks?”

We believe the answer is a resounding “yes.”

Bottom line: If you want exposure to Big Oil, we’re in a buying window today.

Bitcoin is popping

Invigorated by today’s trade deal, “risk on” sentiment is gripping investors again, and bitcoin is jumping.

As I write, the granddaddy crypto is up 4.5% on the day, now trading above $101K for the first time since early February.

Readers of our crypto expert Luke Lango were expecting this move. Let’s rewind to Luke’s Crypto Investor Network update last Saturday:

If April was a month of uncertainty and volatility, May looks poised to be the launching pad for one of the biggest risk-on rallies in recent crypto history.

Seriously. We’re that bullish right now.

We are growing increasingly confident that the crypto market is setting up for a powerful surge higher into and throughout the summer.

Behind Luke’s forecast was one thing – data.

He pointed out that, since bottoming in early April, bitcoin had soared more than 25% in just 20 trading days (at the time of his update – it’s higher now).

This marked one of the largest 20-day rallies of bitcoin’s latest cycle. For context, the last three major 20-day rallies in Bitcoin from October 2023, February 2024, and November 2024, all marked the beginning of sustained, multi-week crypto rallies.

Back to Luke:

We think the stage is set for everything—Bitcoin and altcoins alike—to move much higher over the next few months.

Beyond his bullish technical analysis, Luke cited additional tailwinds including easing trade war tensions… the likelihood of interest rates cuts from the Fed over the coming months… global adoption of bitcoin… disappearing regulatory headwinds… and increasing sector inflows.

Here’s his bottom line:

Add it all up and what do you get? A classic crypto launchpad setup…

We think Bitcoin reclaims $100,000 in the next week or two.

[Luke is being proved correct today.]

We think it will break $120,000 shortly thereafter. And we wouldn’t be surprised to see $150,000 on BTC before the end of summer. Altcoins should follow, with the laggards of April becoming the leaders of June and July.

Stay sharp. Stay strategic. Stay bullish.

So, is the market entering a prolonged uptrend?

We won’t go that far yet. But there’s certainly increased enthusiasm that trade deals can be reached before the July 9 expiration of the reciprocal pause. And that’s big.

Last week, I featured the following quote from Warren Buffett:

 A great investment opportunity occurs when a marvelous business encounters a one-time, huge, but solvable problem

I then made the point that our tariff-related market/economic pain was self-induced, which meant it could be self-corrected. A “huge, but solvable problem,” one might say.

With a little creative license on Buffett’s quote, that gives us:

A great investment opportunity occurs when a marvelous stock market encounters a one-time, huge, but solvable trade war.

It appears we’ve taken the first step toward solving it.

We’ll keep you updated here in the Digest.

Have a good evening,

Jeff Remsburg

The Federal Reserve concluded its latest policy meeting yesterday. And, as expected, it made no change to key interest rates.

In its official policy statement, the Fed cited that inflation “remains somewhat elevated.” And in his press conference, Fed Chair Jerome Powell reiterated the Fed’s “patient” approach, saying, “We think right now the appropriate thing to do is to wait and see how things evolve. There’s so much uncertainty.”

I find this to be contradictory and a little perplexing. That’s because deflationary signs are popping up everywhere. Meanwhile, the uncertainty around trade is dissipating.

Just this morning, for example, President Trump announced a new trade deal with the United Kingdom. I expect more of these deals to be announced in the coming days.

We even recently learned that negotiations between the U.S. and China will begin this weekend in Switzerland.

So, what’s keeping the Fed from cutting rates, and when can we expect the next cut?

That’s one of the questions I answer in a special video interview with Luis Hernandez, Editor-in-Chief of InvestorPlace. I also explain what to make of the Fed’s inaction – and how investors can profit regardless of what’s happening in the market.

Now, you might be surprised to learn what I have to say. That’s because, to be honest, I’m very frustrated with our central bank.

Just click here or the screenshot to watch this video. You can also read the full transcript below.

Now, the bottom line is that the Fed will be forced to cut rates sooner or later, because the reality is we’re in the middle of a global interest rate collapse.

From the European Union to the U.K. to China, central banks are slashing rates to combat slowing growth or outright recessions.

Because our market rates are higher, capital is flowing into the U.S., which is pushing down the rates on our Treasuries. And the Fed can’t fight market rates forever, folks.

That’s why I have gone on record predicting four rate cuts this year. And even after the Fed’s decision yesterday to hold steady, I stand by my prediction.

Where Investors Should Focus Next

With the big Fed news now behind us, it’s time to for investors to turn their attention back to the first-quarter earnings season.

According to FactSet, 72% of S&P 500 companies have released quarterly results. Of those, 76% have exceeded analysts’ earnings expectations. The average earnings surprise is 8.6%, and the S&P 500 is expected to achieve 12.8% earnings growth for the quarter.

These are great numbers, but I’m proud to say that my Accelerated Profits stocks are doing even better.

So far, the average Accelerated Profits stock earnings surprise is an impressive 32%. My Buy List is currently characterized by 39.1% average forecasted earnings growth and 24.1% average forecasted sales growth. And thanks to positive analyst revisions, I expect wave after wave of positive results in the upcoming weeks to dropkick and drive my stocks higher!

Thanks to my stocks’ superior fundamentals, they don’t need the Fed to cut rates to do well in this market.

If you don’t want to wait for the Fed or big economic news to boost your gains and give you real cash in your pockets now, then you’ll want to consider Accelerated Profits.

This is my fastest-moving stock-trading service, designed to deliver quick gains regardless of what’s happening in the market. In fact, over the past year or so, my subscribers had the chance for gains like…

• 106.44% from Alamos Gold Inc. (AGI)
• 70.22% from GigaCloud Technology Inc. (GCT)
• 604.81% from Vista Oil & Gas (VIST)
• 135.05% from CECO Environmental Corp. (CECO)
• 114.49% from Targa Resources Corp. (TRGP)

And now, my system has identified the companies best positioned to thrive during the next wave of the AI Revolution – what I’m calling the Trump/AI Convergence.

Click here to learn more now.

******************

Luis Hernandez:

Hi, I’m Luis Hernandez, Editor-in-Chief at Investor Place.

The market has felt like it was on hold this week waiting for yesterday, the conclusion of the Federal Reserve Open Market Committee (FOMC) meeting, and a decision on interest rates.

Going into the meeting, the stock market was not expecting any rate cuts, and that’s just what they got. But everyone was listening closely to Fed Chairman Jerome Powell’s press conference to see if there were any hints of rate cuts coming in June or July.

As you probably know, President Donald Trump has been pressing the Fed for rate cuts. Just this Sunday, Trump again said that Powell should lower rates now, even as the odds of a cut were close to zero.

Today, I’m here with stock market legend, Louis Navellier, to talk about what Powell said, when he thinks rate cuts will come and what the market will do when they finally appear. We’ll also talk about stock market earnings, what Louis expects for his stocks over the next few quarters and general market conditions.

Louis, thanks for taking the time.

Louis Navellier:

Good to be here.

Luis Hernandez:

Okay, the Fed met the market’s expectations by not cutting rates, leaving short-term interest rates between 4.25 and 4.5%, where it’s been since December.

I know you think this is a mistake. Can you summarize for folks why you think it is such a mistake?

Louis Navellier:

Well, there’s two reasons.

One is the Fed’s way above market rates, based on the two-year treasury. They have to cut twice to get in line with market rates. And then, we have deflation. So we had deflation in the last two CPIs (Consumer Price Index), the last PPI (Producer Price Index). PCE (Personal Consumption Expenditures) came in flat as a pancake. Most of our inflation in America has been tied to housing costs. And home builders have to discount homes to sell them.

I’m in Reno now, where they have quite a bit of new home building. And it’s always, “Let’s make a deal.” The prices keep falling, from Toll Brothers Inc. (TOL) and whoever’s building out here. And that’s all over the country.

The only good green shoot is they seem to be worried about unemployment. And they should be, because new claims for unemployment shot up. Some people thought that was a spring break distortion, but the payroll report clearly didn’t show all the DOGE (Department of Government Efficiency) cuts, so that’s going to get worse in the upcoming months.

So hopefully, they cut rates to fix the unemployment situation. In the meantime, rates are going to continue to collapse in Europe. The ECB (European Central Bank) has cut seven times, but they got another cut brewing. I’m still on record that the Fed will cut four times this year, because I was envisioning this global collapse in interest rates. And that is happening.

The worst rates are, of course, China, where rates are below Japan. And China also had some stimulus today, trying to save their economy. But they’re so bad that everybody keeps talking about a currency devaluation.

So, the whole world is at or near a recession right now. Asia is doing very poorly. Mexico’s in a recession, so is Canada, so is Britain, so is France, so is Germany.

And the only country that is not is us. Now, I know our GDP (Gross Domestic Product) went down, but we had a 4.8% surge from imports. Imports were up 41.3% in the first quarter, so that caused a big GDP adjustment of 4.8%, actually. And then you have to adjust it for the inventories that are still sitting around. So if we back that out, we’re not in a recession.

If you’re a manufacturer or somebody around the world, you better move to America fast. And I was dealing with some Germans today, and they like to remind me that my AfD comments are out of bounds, but I said, “AfD at least wants to turn your nuclear plants back on. And that would save your manufacturing flight.”

But if you’re sitting there in Germany and you’re a BMW, Mercedes Benz Group ADR (MBGYY) or Volkswagen Group (VWAGY), you have to be all EVs by 2035, according to EU (European Union). Or you can just pick up and move all your manufacturing to America. Our electricity is a fourth of the cost in Germany. Trump says he’ll give you visas for all the workers you want to move.

We have five southern states that will be throwing incentives at you, and that’s going to make it very lucrative. And now you can build your ice engines, or your internal combustion engines that you’d have to shut down in Europe.

So we’re just an oasis amidst a very confusing time. And I guess my last frustration is, okay, I know Ford Motor Co. (F) raised the price of the Mach-E and the Bronco by two grand. They’re made in Mexico. That’s that. I know GM (General Motors Co.) is actually the largest importer of foreign cars, mostly from Korea, but last year they brought in 55,000 cars from China. So I know some of our companies are struggling with the new rules, but the truth of the matter is that we’re it. I mean, we have household formation. We assimilate our immigrants no matter how they get here. We got 50 states fighting for your business.

It doesn’t matter who we elect, we’re going to be the oasis. And we’re going to have freer trade around the world when all this is done. Even China had dropped their tariffs on over a hundred items. And of course, China’s meeting with Scott Bessent in Switzerland on the weekend.

So I’m very bullish. I happen to have a car on a boat coming over, and they’re not going to ding me because they’re anticipating they’re going to work something out. And that’s good.

Luis Hernandez:

Yeah. So I know that you’ve been tracking some of the manufacturing that’s coming back to the United States. Do you have an updated figure on that?

Louis Navellier:

Well, it was well over $7 trillion. I’m sure it’s going to take a few years, but the data centers are the first, because they should have their data here, because we have the cheapest electricity.

Data centers go wherever there’s cheap electricity. So that’s hydroelectric, Columbia River Gorge, Hoover Dam, hydroelectric. Wherever there’s nuclear plants. There’s a lot of them in North Carolina. Chattanooga is probably the cheapest, they got hydro and nuclear there.

Also, you have to have super fast internet. I’m in Reno here. We have fast internet because we have the Apple Inc. (AAPL) and Google server farms here.

So it’s going to be very exciting how we build out this AI database. But so far, so good. The only glitch has been that Super Micro Computer, Inc. (SMCI) said that some of their customers want the Blackwell chip instead of the H20 chip. So in March, their sales stalled a bit. And there’s still some fuzziness on their sales guidance. But they’re still the leader on building the water-cooled rack system. So that’s why I’m holding the stock.

Luis Hernandez:

So in the first quarter, or at least in the first earnings season here, the results have been pretty good, even as the tariff story has weighed on the markets. What’s your observation about earnings season so far, and how your stocks did?

Louis Navellier:

It’s been stunning. But we have some stocks that announced, and they get hit with profit-taking. We had one, Powell Industries Inc. (POWL) beat on sales, but the headline says they missed, they beat. Somebody made an error, so it got hit by the algorithm. So POWL is a good buy.

But, yeah, some of the stocks are getting hit with profit-taking. Probably the most obvious one was Brinker International Inc. (EAT), the restaurant chain. Not only did they beat, they also got higher. So you see nervous people taking profits in stocks, but all good stocks bounce. Anytime you see that phenomenon, it usually will bounce in a few days.

Gold stocks are screaming right now. We had one, Kinross Gold Corp. (KCG, they beat and then they shot up.

So I’m happy the earnings down some season, but the guidance is a little bit more muddled because there seems to be a concern. Obviously, consumer confidence has been devastating. I go off mostly the conference board survey, not the Michigan survey – the University of Michigan survey. Conference board is much better, but they did report a big plunge.

So we just got to cheer up as a country. I think Scott Bessent is wonderful for that. He’s kind of the don’t worry, be happy Treasury Secretary. And if he’s not nervous, we shouldn’t be nervous. We had the treasury yields declining after the FOMC statement, so that’s a good sign.

But we’ve been finding a negative media emanating from Europe. [Ed] Yardini had a good piece, where he had four Economist Magazine covers all negative about America. And I can tell you that the Financial Times is also negative. So Economist and Financial Times are based in Britain.

But just because they’re miserable doesn’t mean we should be miserable. I’m sorry that half the country can’t pay their utility bill, and they have to be subsidized. And I’m sorry you got problems with assimilating your new immigrants and all, but we’re not them.

Luis Hernandez:

Yeah.

Louis Navellier:

And I was very curious with Mark Carney’s visit to the White House. Obviously, Trump praised him, as he did with Kurt Steiner when he came to the White House. But then, Trump always gets his little digs in, like, “Don’t give up on that 51st state thing, because…”

Luis Hernandez:

Yeah, yeah.

Louis Navellier:

“… we’ll drop all the tariffs and then you’ll prosper.”

Luis Hernandez:

Yeah, yeah.

Louis Navellier:

That was, I guess he just has to a have a marker on everybody.

But really, when you look back on it, every major multinational has to outsource to America. And there’s other things going on, like India is picking up business from China, via Foxconn, Apple’s business and stuff. So it’s interesting.

Luis Hernandez:

Yeah. You mentioned that I think the other big story that I’ve kind of been seeing a lot of during earnings season was the change in outlook for so many of these things. Can you talk a little bit more about why folks see that as being so muddy, and how it affects your system?

Louis Navellier:

Well, my system follows analyst earnings estimates. And if analysts start to cut their estimates, it’s bad. And there’s no doubt that when you look out, the variability of the outcome is wider.

But as I understand what they’re doing with the tariffs, we’re going to have freer trade when this is done. Because they suspended the reciprocal tariffs for 90 days. All those countries are negotiating with us. And of course, the first thing you’re supposed to do is drop your trade barriers, and we’ll drop, and then we won’t erect barriers against you if you don’t have any.

And then, of course, what the Trump administration does is they guilt them to buy something that’s American. “Do you want our oil? Do you want our agriculture? What would you like?”

So it’s going to be freer when it’s all said and done. The fact that China blinked and removed over a hundred tariffs is good.

President Xi is interesting. He cannot really leave China very long. He did go on a trip to Malaysia and Vietnam, but I don’t know if Trump can meet him. If he does meet him, he’s going to have to go visit him. They’re going to have to meet somewhere close, Singapore or someplace, because this guy is scared that if he comes back, he won’t be in charge anymore.

So China’s got their own internal turmoil. They’ve got problems with their demographics, they’ve got their empty real estate. There’s a lot of things going on. So in the end, we will win, and everything will be fine, and it will be a big fuss over nothing.

Now there is a 10% across the board tariff on everything. I think the dollar will eventually get strong enough that we won’t even see that. But there are clearly a lot of trade abuses. I found it fascinating that, as big as we are agriculturally in America, we are a net importer of food in the last three years. And actually, the big one that we’re importing from is Mexico. Tomatoes, all kinds of berries, obviously, the chilies, avocados. And so, somehow we’ve got to try to get that fixed.

The other thing we’ve got to worry about is Manitoba, which is a province in Canada. Apparently, they make 3.6 million pigs a year, and that’s where our baby back ribs come from. And I don’t know if you remember COVID, COVID screwed up how fast you slaughter the animals. So the pigs are better when they’re small. And when they get big, they’re not very tasty. So I’ve been joking with friends up in Minnesota that you might be overrun here soon, because I don’t know if those little 3.6 million pigs are coming to America, they might just be let loose. So we’ll see.

Luis Hernandez:

So given the news from yesterday, and the Fed not cutting, last I looked, it appeared that the traders were really only giving the Fed about a 35%, 36% chance of a cut in June, and then, like a coin flip in July. Do you have any predictions there for when they might first cut?

Louis Navellier:

All I can tell you is they’re above market rates. Right now they’re two cuts above market rates. For a while, they were three cuts above. Then the rates backed up just a tad, but now they’re going back down today.

They are restrictive. And unemployment has risen and will continue to meander higher. And we will continue to have deflation. One thing we did learn, is clearly no one at the Fed puts gas in their car. Because if they did, you know, prices would be falling. I find that very frustrating. So I guess they’re all driven around.

But they really, really should see the forest through the trees. And here’s a Fed that likes to be data dependent. If you look at the data, it’s deflation. But they’re anticipating inflation that hasn’t materialized.

And I know we buy a lot of stuff from China, and we’re going to have to figure that out.

One thing I will say is, Trump does not want to have empty store shelves. He met with Home Depot Inc. (HD), Target Corp. (TGT) and Walmart Inc. (WMT) executives, and that would be devastating for him politically, because they’ll just take pictures, “Oh, look at the empty store shelves.” Or just kind of like before, “Look at high egg prices.” So I think he will work with the industry to make sure that doesn’t happen.

Right now we’ve got a glut. They say, “Oh, the ports are slowing down.” Well, yeah, it’s because we’ve got a glut. They just dump goods on us. And now they’re going to have to sell all this stuff.

One thing I would encourage people to watch, if they just want to watch it themselves, watch TCL TV prices. TCL is made in China. So that’s going to be hit pretty hard with the tariffs. And TCL tries to undercut Sony Group Corp. (SONY) and Samsung. Just watch those prices. But as I speak to you today, TCL TVs are still cheaper.

Luis Hernandez:

Okay, one last thing. The other big news this week is that Warren Buffett is retiring, after 60 years or so, I think, at Berkshire Hathaway Inc. (BRK). I know that you’ve talked to Warren Buffett before. I mean, do you have any recollections or stories you want to relate about him?

Louis Navellier:

Well, I just said hi to Warren before, specifically, like a lot of people. But he’s a wonderful man. Bazinga pointed out that Mrs. Pelosi has outperformed for the last 11 years. I don’t think that’s why he’s retiring. Usually when you hit your nineties, you’re entitled to retire.

Berkshire Hathaway’s earnings did fall two thirds, because Berkshire Hathaway is a big, big reinsurance company. And so they had to pay quite a bit for those LA fires on the reinsurance claims. Those interest rates come down, that will help their bond portfolios, because all insurers are going to have big bond portfolios.

I think the issue with Berkshire Hathaway, and you saw the price drop after the retirement announcement, is they have a lot of private businesses. So one would be Borsheims, and my family does shop at Borsheims. It’s a jewelry store, and you can also get fine furniture, and things like that. They also have Nebraska Furniture Mart. It is two exits in, I think, Plano, Texas off the freeway. It’s 31 football fields.

Now, most of that furniture comes from China and other places, so I suspect that’s going to have a tariff issue. But if you can’t make up your mind on furniture, you’ll never make up your mind if you go to Nebraska Furniture Mart. Again, it’s two exits off the freeway, 31 football fields. And they have one in Nebraska too.

They have See’s Candy, and they have all these other private businesses. So obviously, people were paying a premium to have Warren Buffett, but now that, as he rides off in the sunset and has a nice retirement, the question is, is it still worth that premium?

I still remember being in the Cayman Islands, gosh, 40 years ago, and people were paying a $1.32 to buy a dollar’s worth of Soros’s hedge fund. There was literally a 32% mark-up on it. And Warren kind of had a premium. And so the question is, is what is the Berkshire premium? And are they going to prick that bubble? And it looks like they started to do that already.

Again, we don’t know the value of all these private businesses. The real estate would be another thing. We do know Berkshire’s mostly a reinsurance company now. So I think it’s going to bode poorly for Berkshire Hathaway. And so I would not recommend the stock at this time, even if you enjoy the annual events he has. And I hope he still keeps coming to them. But I worry about that stock.

Luis Hernandez:

Okay. Thanks for your insights, Louis.

Louis Navellier:

Thank you.

Luis Hernandez:

Folks, below this video, you should see a link to Louis’s Accelerated Profits product. This is Louis’s fastest moving service focused on finding stocks that are making short-term moves to the upside, so you don’t have to endure the constant market swings.

Besides frequent new buys, usually at least two every month, every Tuesday, Louis identifies his top three stocks to buy right now. So when you join, you’ll see Louis’ favorite picks today, and then get them every Tuesday going forward.

Thanks again for your attention.

Sincerely,

Louis Navellier

Editor, Market 360

The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Alamos Gold, Inc. (AGI), CECO Environmental Corp. (CECO) and Targa Resources Corp. (TRGP)

Editor’s Note: At the Federal Open Market Committee meeting yesterday, Federal Reserve Chair Jerome Powell said they’re keeping interest rates at the target range of 4.25% to 4.5%. They’re standing pat.

The Fed Chair finds himself in a tough spot because the trade war creates two different risks to the economy. On the one hand, the trade war could knock the economy into recession, which would demand lowering rates. On the other hand, the trade war could reignite inflation, which would demand raising rates. Since it’s too early to know which risk the economy might face, Powell and the FOMC are standing still. They’re not in panic mode. I believe that’s the correct position.

My InvestorPlace colleague Louis Navellier, on the other hand, offers a different perspective worth considering. You can hear Louis’ take in this video, where he sits down with InvestorPlace Editor-in-Chief Luis Hernandez to talk about the Fed’s decision. Louis also lets us know how he believes investors can profit regardless of what’s happening in the market. Over to you, Louis…

The Federal Reserve concluded its latest policy meeting yesterday. And, as expected, it made no change to key interest rates.

In its official policy statement, the Fed cited that inflation “remains somewhat elevated.” And in his press conference, Fed Chair Jerome Powell reiterated the Fed’s “patient” approach, saying, “We think right now the appropriate thing to do is to wait and see how things evolve. There’s so much uncertainty.”

I find this to be contradictory and a little perplexing. That’s because deflationary signs are popping up everywhere. Meanwhile, the uncertainty around trade is dissipating.

Just this morning, for example, President Trump announced a new trade deal with the United Kingdom. I expect more of these deals to be announced in the coming days.

We even recently learned that negotiations between the U.S. and China will begin this weekend in Switzerland.

So, what’s keeping the Fed from cutting rates, and when can we expect the next cut?

That’s one of the questions I answer in a special video interview with Luis Hernandez, Editor-in-Chief of InvestorPlace. I also explain what to make of the Fed’s inaction – and how investors can profit regardless of what’s happening in the market.

Now, you might be surprised to learn what I have to say. That’s because, to be honest, I’m very frustrated with our central bank.

Just click below to watch this video. You can also read the full transcript below.

Now, the bottom line is that the Fed will be forced to cut rates sooner or later, because the reality is we’re in the middle of a global interest rate collapse.

From the European Union to the U.K. to China, central banks are slashing rates to combat slowing growth or outright recessions.

Because our market rates are higher, capital is flowing into the U.S., which is pushing down the rates on our Treasuries. And the Fed can’t fight market rates forever, folks.

That’s why I have gone on record predicting four rate cuts this year. And even after the Fed’s decision yesterday to hold steady, I stand by my prediction.

With the big Fed news now behind us, it’s time for investors to turn their attention back to the first-quarter earnings season.

According to FactSet, 72% of S&P 500 companies have released quarterly results. Of those, 76% have exceeded analysts’ earnings expectations. The average earnings surprise is 8.6%, and the S&P 500 is expected to achieve 12.8% earnings growth for the quarter.

These are great numbers, but I’m proud to say that my Accelerated Profits stocks are doing even better.

So far, the average Accelerated Profits stock earnings surprise is an impressive 32%. My Buy List is currently characterized by 39.1% average forecasted earnings growth and 24.1% average forecasted sales growth. And thanks to positive analyst revisions, I expect wave after wave of positive results in the upcoming weeks to dropkick and drive my stocks higher!

Thanks to my stocks’ superior fundamentals, they don’t need the Fed to cut rates to do well in this market.

If you don’t want to wait for the Fed or big economic news to boost your gains and give you real cash in your pockets now, then you’ll want to consider Accelerated Profits.

This is my fastest-moving stock-trading service, designed to deliver quick gains regardless of what’s happening in the market. In fact, over the past year or so, my subscribers had the chance for gains like…

• 106.44% from Alamos Gold Inc. (AGI)
• 70.22% from GigaCloud Technology Inc. (GCT)
• 604.81% from Vista Oil & Gas (VIST)
• 135.05% from CECO Environmental Corp. (CECO)
• 114.49% from Targa Resources Corp. (TRGP)

And now, my system has identified the companies best positioned to thrive during the next wave of the AI Revolution – what I’m calling the Trump/AI Convergence.

Click here to learn more now.

Regards,

Louis Navellier

Editor, Market 360

Louis hereby discloses that as of the date of this email, Louis, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

Alamos Gold, Inc. (AGI), CECO Environmental Corp. (CECO) and Targa Resources Corp. (TRGP)

Transcript

Luis Hernandez: Hi, I’m Luis Hernandez, Editor-in-Chief at Investor Place.

The market has felt like it was on hold this week waiting for yesterday, the conclusion of the Federal Reserve Open Market Committee (FOMC) meeting, and a decision on interest rates.

Going into the meeting, the stock market was not expecting any rate cuts, and that’s just what they got. But everyone was listening closely to Fed Chairman Jerome Powell’s press conference to see if there were any hints of rate cuts coming in June or July.

As you probably know, President Donald Trump has been pressing the Fed for rate cuts. Just this Sunday, Trump again said that Powell should lower rates now, even as the odds of a cut were close to zero.

Today, I’m here with stock market legend, Louis Navellier, to talk about what Powell said, when he thinks rate cuts will come and what the market will do when they finally appear. We’ll also talk about stock market earnings, what Louis expects for his stocks over the next few quarters and general market conditions.

Louis, thanks for taking the time.

Louis Navellier: Good to be here.

Luis Hernandez: Okay, the Fed met the market’s expectations by not cutting rates, leaving short-term interest rates between 4.25 and 4.5%, where it’s been since December.

I know you think this is a mistake. Can you summarize for folks why you think it is such a mistake?

Louis Navellier: Well, there’s two reasons.

One is the Fed’s way above market rates, based on the two-year treasury. They have to cut twice to get in line with market rates. And then, we have deflation. So we had deflation in the last two CPIs (Consumer Price Index), the last PPI (Producer Price Index). PCE (Personal Consumption Expenditures) came in flat as a pancake. Most of our inflation in America has been tied to housing costs. And home builders have to discount homes to sell them.

I’m in Reno now, where they have quite a bit of new home building. And it’s always, “Let’s make a deal.” The prices keep falling, from Toll Brothers Inc. (TOL) and whoever’s building out here. And that’s all over the country.

The only good green shoot is they seem to be worried about unemployment. And they should be, because new claims for unemployment shot up. Some people thought that was a spring break distortion, but the payroll report clearly didn’t show all the DOGE (Department of Government Efficiency) cuts, so that’s going to get worse in the upcoming months.

So hopefully, they cut rates to fix the unemployment situation. In the meantime, rates are going to continue to collapse in Europe. The ECB (European Central Bank) has cut seven times, but they got another cut brewing. I’m still on record that the Fed will cut four times this year, because I was envisioning this global collapse in interest rates. And that is happening.

The worst rates are, of course, China, where rates are below Japan. And China also had some stimulus today, trying to save their economy. But they’re so bad that everybody keeps talking about a currency devaluation.

So, the whole world is at or near a recession right now. Asia is doing very poorly. Mexico’s in a recession, so is Canada, so is Britain, so is France, so is Germany.

And the only country that is not is us. Now, I know our GDP (Gross Domestic Product) went down, but we had a 4.8% surge from imports. Imports were up 41.3% in the first quarter, so that caused a big GDP adjustment of 4.8%, actually. And then you have to adjust it for the inventories that are still sitting around. So if we back that out, we’re not in a recession.

If you’re a manufacturer or somebody around the world, you better move to America fast. And I was dealing with some Germans today, and they like to remind me that my AfD comments are out of bounds, but I said, “AfD at least wants to turn your nuclear plants back on. And that would save your manufacturing flight.”

But if you’re sitting there in Germany and you’re a BMW, Mercedes Benz Group ADR (MBGYY) or Volkswagen Group (VWAGY), you have to be all EVs by 2035, according to EU (European Union). Or you can just pick up and move all your manufacturing to America. Our electricity is a fourth of the cost in Germany. Trump says he’ll give you visas for all the workers you want to move.

We have five southern states that will be throwing incentives at you, and that’s going to make it very lucrative. And now you can build your ice engines, or your internal combustion engines that you’d have to shut down in Europe.

So we’re just an oasis amidst a very confusing time. And I guess my last frustration is, okay, I know Ford Motor Co. (F) raised the price of the Mach-E and the Bronco by two grand. They’re made in Mexico. That’s that. I know GM (General Motors Co.) is actually the largest importer of foreign cars, mostly from Korea, but last year they brought in 55,000 cars from China. So I know some of our companies are struggling with the new rules, but the truth of the matter is that we’re it. I mean, we have household formation. We assimilate our immigrants no matter how they get here. We got 50 states fighting for your business.

It doesn’t matter who we elect, we’re going to be the oasis. And we’re going to have freer trade around the world when all this is done. Even China had dropped their tariffs on over a hundred items. And of course, China’s meeting with Scott Bessent in Switzerland on the weekend.

So I’m very bullish. I happen to have a car on a boat coming over, and they’re not going to ding me because they’re anticipating they’re going to work something out. And that’s good.

Luis Hernandez: Yeah. So I know that you’ve been tracking some of the manufacturing that’s coming back to the United States. Do you have an updated figure on that?

Louis Navellier: Well, it was well over $7 trillion. I’m sure it’s going to take a few years, but the data centers are the first, because they should have their data here, because we have the cheapest electricity.

Data centers go wherever there’s cheap electricity. So that’s hydroelectric, Columbia River Gorge, Hoover Dam, hydroelectric. Wherever there’s nuclear plants. There’s a lot of them in North Carolina. Chattanooga is probably the cheapest, they got hydro and nuclear there.

Also, you have to have super fast internet. I’m in Reno here. We have fast internet because we have the Apple Inc. (AAPL) and Google server farms here.

So it’s going to be very exciting how we build out this AI database. But so far, so good. The only glitch has been that Super Micro Computer, Inc. (SMCI) said that some of their customers want the Blackwell chip instead of the H20 chip. So in March, their sales stalled a bit. And there’s still some fuzziness on their sales guidance. But they’re still the leader on building the water-cooled rack system. So that’s why I’m holding the stock.

Luis Hernandez: So in the first quarter, or at least in the first earnings season here, the results have been pretty good, even as the tariff story has weighed on the markets. What’s your observation about earnings season so far, and how your stocks did?

Louis Navellier: It’s been stunning. But we have some stocks that announced, and they get hit with profit-taking. We had one, Powell Industries Inc. (POWL) beat on sales, but the headline says they missed, they beat. Somebody made an error, so it got hit by the algorithm. So POWL is a good buy.

But, yeah, some of the stocks are getting hit with profit-taking. Probably the most obvious one was Brinker International Inc. (EAT), the restaurant chain. Not only did they beat, they also got higher. So you see nervous people taking profits in stocks, but all good stocks bounce. Anytime you see that phenomenon, it usually will bounce in a few days.

Gold stocks are screaming right now. We had one, Kinross Gold Corp. (KCG, they beat and then they shot up.

So I’m happy the earnings down some season, but the guidance is a little bit more muddled because there seems to be a concern. Obviously, consumer confidence has been devastating. I go off mostly the conference board survey, not the Michigan survey – the University of Michigan survey. Conference board is much better, but they did report a big plunge.

So we just got to cheer up as a country. I think Scott Bessent is wonderful for that. He’s kind of the don’t worry, be happy Treasury Secretary. And if he’s not nervous, we shouldn’t be nervous. We had the treasury yields declining after the FOMC statement, so that’s a good sign.

But we’ve been finding a negative media emanating from Europe. [Ed] Yardini had a good piece, where he had four Economist Magazine covers all negative about America. And I can tell you that the Financial Times is also negative. So Economist and Financial Times are based in Britain.

But just because they’re miserable doesn’t mean we should be miserable. I’m sorry that half the country can’t pay their utility bill, and they have to be subsidized. And I’m sorry you got problems with assimilating your new immigrants and all, but we’re not them.

Luis Hernandez: Yeah.

Louis Navellier: And I was very curious with Mark Carney’s visit to the White House. Obviously, Trump praised him, as he did with Kurt Steiner when he came to the White House. But then, Trump always gets his little digs in, like, “Don’t give up on that 51st state thing, because…”

Luis Hernandez: Yeah, yeah.

Louis Navellier: “… we’ll drop all the tariffs and then you’ll prosper.”

Luis Hernandez: Yeah, yeah.

Louis Navellier: That was, I guess he just has to a have a marker on everybody.

But really, when you look back on it, every major multinational has to outsource to America. And there’s other things going on, like India is picking up business from China, via Foxconn, Apple’s business and stuff. So it’s interesting.

Luis Hernandez: Yeah. You mentioned that I think the other big story that I’ve kind of been seeing a lot of during earnings season was the change in outlook for so many of these things. Can you talk a little bit more about why folks see that as being so muddy, and how it affects your system?

Louis Navellier: Well, my system follows analyst earnings estimates. And if analysts start to cut their estimates, it’s bad. And there’s no doubt that when you look out, the variability of the outcome is wider.

But as I understand what they’re doing with the tariffs, we’re going to have freer trade when this is done. Because they suspended the reciprocal tariffs for 90 days. All those countries are negotiating with us. And of course, the first thing you’re supposed to do is drop your trade barriers, and we’ll drop, and then we won’t erect barriers against you if you don’t have any.

And then, of course, what the Trump administration does is they guilt them to buy something that’s American. “Do you want our oil? Do you want our agriculture? What would you like?”

So it’s going to be freer when it’s all said and done. The fact that China blinked and removed over a hundred tariffs is good.

President Xi is interesting. He cannot really leave China very long. He did go on a trip to Malaysia and Vietnam, but I don’t know if Trump can meet him. If he does meet him, he’s going to have to go visit him. They’re going to have to meet somewhere close, Singapore or someplace, because this guy is scared that if he comes back, he won’t be in charge anymore.

So China’s got their own internal turmoil. They’ve got problems with their demographics, they’ve got their empty real estate. There’s a lot of things going on. So in the end, we will win, and everything will be fine, and it will be a big fuss over nothing.

Now there is a 10% across the board tariff on everything. I think the dollar will eventually get strong enough that we won’t even see that. But there are clearly a lot of trade abuses. I found it fascinating that, as big as we are agriculturally in America, we are a net importer of food in the last three years. And actually, the big one that we’re importing from is Mexico. Tomatoes, all kinds of berries, obviously, the chilies, avocados. And so, somehow we’ve got to try to get that fixed.

The other thing we’ve got to worry about is Manitoba, which is a province in Canada. Apparently, they make 3.6 million pigs a year, and that’s where our baby back ribs come from. And I don’t know if you remember COVID, COVID screwed up how fast you slaughter the animals. So the pigs are better when they’re small. And when they get big, they’re not very tasty. So I’ve been joking with friends up in Minnesota that you might be overrun here soon, because I don’t know if those little 3.6 million pigs are coming to America, they might just be let loose. So we’ll see.

Luis Hernandez: So given the news from yesterday, and the Fed not cutting, last I looked, it appeared that the traders were really only giving the Fed about a 35%, 36% chance of a cut in June, and then, like a coin flip in July. Do you have any predictions there for when they might first cut?

Louis Navellier: All I can tell you is they’re above market rates. Right now they’re two cuts above market rates. For a while, they were three cuts above. Then the rates backed up just a tad, but now they’re going back down today.

They are restrictive. And unemployment has risen and will continue to meander higher. And we will continue to have deflation. One thing we did learn, is clearly no one at the Fed puts gas in their car. Because if they did, you know, prices would be falling. I find that very frustrating. So I guess they’re all driven around.

But they really, really should see the forest through the trees. And here’s a Fed that likes to be data dependent. If you look at the data, it’s deflation. But they’re anticipating inflation that hasn’t materialized.

And I know we buy a lot of stuff from China, and we’re going to have to figure that out.

One thing I will say is, Trump does not want to have empty store shelves. He met with Home Depot Inc. (HD), Target Corp. (TGT) and Walmart Inc. (WMT) executives, and that would be devastating for him politically, because they’ll just take pictures, “Oh, look at the empty store shelves.” Or just kind of like before, “Look at high egg prices.” So I think he will work with the industry to make sure that doesn’t happen.

Right now we’ve got a glut. They say, “Oh, the ports are slowing down.” Well, yeah, it’s because we’ve got a glut. They just dump goods on us. And now they’re going to have to sell all this stuff.

One thing I would encourage people to watch, if they just want to watch it themselves, watch TCL TV prices. TCL is made in China. So that’s going to be hit pretty hard with the tariffs. And TCL tries to undercut Sony Group Corp. (SONY) and Samsung. Just watch those prices. But as I speak to you today, TCL TVs are still cheaper.

Luis Hernandez: Okay, one last thing. The other big news this week is that Warren Buffett is retiring, after 60 years or so, I think, at Berkshire Hathaway Inc. (BRK). I know that you’ve talked to Warren Buffett before. I mean, do you have any recollections or stories you want to relate about him?

Louis Navellier: Well, I just said hi to Warren before, specifically, like a lot of people. But he’s a wonderful man. Bazinga pointed out that Mrs. Pelosi has outperformed for the last 11 years. I don’t think that’s why he’s retiring. Usually when you hit your nineties, you’re entitled to retire.

Berkshire Hathaway’s earnings did fall two thirds, because Berkshire Hathaway is a big, big reinsurance company. And so they had to pay quite a bit for those LA fires on the reinsurance claims. Those interest rates come down, that will help their bond portfolios, because all insurers are going to have big bond portfolios.

I think the issue with Berkshire Hathaway, and you saw the price drop after the retirement announcement, is they have a lot of private businesses. So one would be Borsheims, and my family does shop at Borsheims. It’s a jewelry store, and you can also get fine furniture, and things like that. They also have Nebraska Furniture Mart. It is two exits in, I think, Plano, Texas off the freeway. It’s 31 football fields.

Now, most of that furniture comes from China and other places, so I suspect that’s going to have a tariff issue. But if you can’t make up your mind on furniture, you’ll never make up your mind if you go to Nebraska Furniture Mart. Again, it’s two exits off the freeway, 31 football fields. And they have one in Nebraska too.

They have See’s Candy, and they have all these other private businesses. So obviously, people were paying a premium to have Warren Buffett, but now that, as he rides off in the sunset and has a nice retirement, the question is, is it still worth that premium?

I still remember being in the Cayman Islands, gosh, 40 years ago, and people were paying a $1.32 to buy a dollar’s worth of Soros’s hedge fund. There was literally a 32% mark-up on it. And Warren kind of had a premium. And so the question is, is what is the Berkshire premium? And are they going to prick that bubble? And it looks like they started to do that already.

Again, we don’t know the value of all these private businesses. The real estate would be another thing. We do know Berkshire’s mostly a reinsurance company now. So I think it’s going to bode poorly for Berkshire Hathaway. And so I would not recommend the stock at this time, even if you enjoy the annual events he has. And I hope he still keeps coming to them. But I worry about that stock.

Luis Hernandez: Okay. Thanks for your insights, Louis.

Louis Navellier: Thank you.

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