by Louis Navellier

November 30, 2021

Each new strain of Covid is given the next letter from the Greek alphabet. We all remember the Delta strain from last summer. That is only the fourth letter of the Greek alphabet. Recently, the newest strain was called NU, the 13th letter of the Greek alphabet, but for some strange reason they skipped over “XI,” the next letter and went straight to Omicron. Could it be that they didn’t want to offend China’s leader, Xi Jinping, the man who is ultimately responsible for exporting the original virus to the world last year?

Whatever the reason, the new Covid-19 variant from South Africa caused an emergency meeting of the World Health Organization (WHO) that spooked the financial markets on “Black Friday,” putting a damper on the biggest retail sales day of the calendar year. Britain, France, and Israel quickly imposed travel bans to South Africa, which caused airline and other travel stocks to plummet. Crude oil also sharply declined on Friday in anticipation of another global economic slowdown. The 10-year Treasury bond also declined significantly. Friday’s abrupt market reaction is setting the stock market up for a potential surge in subsequent days if WHO does not freak the world out after its emergency meeting.

The biggest fear is that this South African Covid-19 variant has up to 30 “spike proteins,” so it can more easily infect people and be more vaccine resistant. Existing vaccines have been effective at blocking these spike proteins. Dr. Anthony Fauci said that the U.S. is rushing to get new data on the new variant from South Africa, but he also stressed that existing vaccines must be tested against this new Covid-19 variant.

Overall, markets always tend to react first and research second, so they panic from time to time. Anytime there is an abrupt market sell-off like this, I go to and check the ETF spreads to see if they have widened relative to their Intraday Indicative Value. Sure enough, there was an abnormally wide ETF spread after the opening on Friday for iShares Select Dividend ETF (DVY), the bellwether ETF that I usually check first, since it is the ETF that abruptly fell almost 35% intraday back in August 2015 during a “flash crash.” The good news is that even though the ETF spread widened for DVY on Friday, trading in the ETF appeared orderly, so I do not think there is any imminent risk of another flash crash.

Another overreaction has been in energy. With new travel restrictions, oil use will be down, but the Biden Administration, as well as Britain, Japan, India, and South Korea, have all followed China by releasing crude oil from their strategic reserves in a coordinated attempt to push down crude oil prices. The White House said, “The president stands ready to take additional action, if needed, and is prepared to use his full authorities working in coordination with the rest of the world to maintain adequate supply as we exit the pandemic.” But much of Europe is locking down again, so demand should moderate soon.

A better solution would be to work with our domestic energy producers to boost U.S. oil production as needed. Production has fallen to slightly over 11 million barrels a day, down from a peak of over 12.9 million barrels a day in late 2019. In fact, as recently as March 2020, the U.S. produced 12.8 million barrels of crude oil per day when the pandemic commenced. The solution is very simple, namely for the Energy Department to reopen the drilling on federal lands and stop demonizing energy companies. (In case you want to see the trend in graphic form, here is a link to monthly U.S. crude oil production.)

Port bottlenecks have improved immensely in Europe, so the costs of renting containers have fallen significantly. Nonetheless, inflation is expected to persist, but possibly at lower rates. The most optimistic inflation forecast comes from Treasury Secretary Janet Yellen, who told the Providence Chamber of Commerce that she expects the monthly inflation rate to decline to 0.2% to 0.3% in the second half of 2022. Frankly, I think Secretary Yellen is overly optimistic and that 4% to 5% inflation is more likely.

Modern Monetary Theory in Action

I mentioned in last Monday’s podcast that The Wall Street Journal published a fascinating article on Modern Monetary Theory (MMT) and how huge deficit financing by sovereign governments, including the U.S., has gone beyond the point of no return without any fear of debt. The scheme began in Europe with zero interest rates and almost unlimited quantitative easing (money creation). The fact that all this massive money pumping has not driven interest rates much higher has lured politicians into complacency and painted many central bankers into a corner, where they now cannot raise key interest rates very much.

Speaking of central bankers, President Biden renewed Fed Chairman Jerome Powell for a second term as Fed Chairman, so the MMT he has practiced since March 2020 will continue, with low interest rates and quantitative easing as needed. For example, the infrastructure bill that passed the House and is expected to be extensively modified by the Senate in early 2022, will be largely financed by more “fiat money” creation (MMT in action), since hiking taxes in an election year would be political suicide. This essentially means that the Biden Administration will be putting more pressure on the Fed to continue its quantitative easing and money printing so that it can boost the federal government’s spending each year.

Frankly, I feel sorry for Fed Chairman Powell and the other members of the Federal Open Market Committee (FOMC), since they are being placed into an impossible predicament. The Journal article said that “the Fed is (rightly) worried about inflation and is tweaking its tools to try to influence the economy with monetary policy, something MMTers think doesn’t work.” The truth of the matter is that politicians love the freedom to spend, using MMT, and the FOMC is trying to adapt. The real risk from MMT, as Europe has demonstrated, is that the eventual outcome of negative interest rates will likely be stagnation.

In the meantime, Americans are spending up a storm with all the money that the Fed has pumped into the system. Black Friday deals are everywhere, and retailers are expected to remain super-aggressive with promotions through Cyber Monday. As a result, I am expecting a very strong holiday shopping season.

Speaking of spending, the National Association of Realtors announced that the median home price has risen 13.1% from a year ago and that the median home price is now $353,900. Despite home sales slowing a bit, 2021 is on track for six million existing home sales, which would be the strongest year since 2006. Overall, real estate and the stock market remain great beneficiaries of the current wave of inflation!

Economic Indicators Released Last Wednesday Reflect Money (MMT) in the System

Last Wednesday, the Commerce Department announced that durable goods orders rose 0.5% in October, higher than economists’ consensus forecast for a 0.3% increase. Durable goods have risen for 15 of the 18 months since the April 2020 pandemic low. Core capital goods rose 0.6% in October as businesses have been rebuilding inventories and consumer spending remained strong. Year to date, durable goods orders have risen 22.1%, but shipments have risen only 13.1%, so businesses continue to have robust order backlogs that have been complicated by component and parts shortages. I should add that September’s durable goods number was revised down to a 0.4% decline, compared to a 0.3% decline initially reported.

In addition, the Commerce Department announced on Wednesday that personal income rose 0.5% in October, while consumer spending rose 1.3%. As a result, the personal savings rate declined to 7.3% in October, down from 8.2% in September. Anytime consumers are willing to incur debt bodes well for both consumer confidence and holiday spending. I should add that the Atlanta Fed is now estimating 8.6% annual GDP growth for the fourth quarter, which will largely be driven by robust consumer spending!

And finally, the Labor Department announced last Wednesday that new weekly unemployment claims in the latest week declined to 199,000, down from a revised 270,000 in the previous week. Continuing unemployment claims in the latest week declined to 2.049 million, down from a revised 2.109 million in the previous week. The good news is that weekly unemployment claims are now at a post-pandemic low.

All content above represents the opinion of Louis Navellier of Navellier & Associates, Inc.

Please see important disclosures below.


Marketmail Survey #12 is now closed.

Also In This Issue

A Look Ahead by Louis Navellier
The Market Waits as Scientists Examine the “Omicron” Strain of Covid

Income Mail by Bryan Perry
Stable Income Is Back in Fashion

Growth Mail by Gary Alexander
The Best Books of 2021 (Part 1)

Global Mail by Ivan Martchev
Omicron: The Next Big Mutation?

Sector Spotlight by Jason Bodner
Why the Market Flushed Good Stocks Down the Drain

View Full Archive
Read Past Issues Here

About The Author

Louis Navellier

Louis Navellier is Founder, Chairman of the Board, Chief Investment Officer and Chief Compliance Officer of Navellier & Associates, Inc., located in Reno, Nevada. With decades of experience translating what had been purely academic techniques into real market applications, he believes that disciplined, quantitative analysis can select stocks that will significantly outperform the overall market. All content in this “A Look Ahead” section of Market Mail represents the opinion of Louis Navellier of Navellier & Associates, Inc.

Important Disclosures:

Although information in these reports has been obtained from and is based upon sources that Navellier believes to be reliable, Navellier does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute Navellier’s judgment as of the date the report was created and are subject to change without notice. These reports are for informational purposes only and are not a solicitation for the purchase or sale of a security. Any decision to purchase securities mentioned in these reports must take into account existing public information on such securities or any registered prospectus.To the extent permitted by law, neither Navellier & Associates, Inc., nor any of its affiliates, agents, or service providers assumes any liability or responsibility nor owes any duty of care for any consequences of any person acting or refraining to act in reliance on the information contained in this communication or for any decision based on it.

Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any securities recommendations made by Navellier. in the future will be profitable or equal the performance of securities made in this report. Dividend payments are not guaranteed. The amount of a dividend payment, if any, can vary over time and issuers may reduce dividends paid on securities in the event of a recession or adverse event affecting a specific industry or issuer.

None of the stock information, data, and company information presented herein constitutes a recommendation by Navellier or a solicitation to buy or sell any securities. Any specific securities identified and described do not represent all of the securities purchased, sold, or recommended for advisory clients. The holdings identified do not represent all of the securities purchased, sold, or recommended for advisory clients and the reader should not assume that investments in the securities identified and discussed were or will be profitable.

Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalized recommendation to you. Individual stocks presented may not be suitable for every investor. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. Investment in fixed income securities has the potential for the investment return and principal value of an investment to fluctuate so that an investor’s holdings, when redeemed, may be worth less than their original cost.

One cannot invest directly in an index. Index is unmanaged and index performance does not reflect deduction of fees, expenses, or taxes. Presentation of Index data does not reflect a belief by Navellier that any stock index constitutes an investment alternative to any Navellier equity strategy or is necessarily comparable to such strategies. Among the most important differences between the Indices and Navellier strategies are that the Navellier equity strategies may (1) incur material management fees, (2) concentrate its investments in relatively few stocks, industries, or sectors, (3) have significantly greater trading activity and related costs, and (4) be significantly more or less volatile than the Indices.

ETF Risk: We may invest in exchange traded funds (“ETFs”) and some of our investment strategies are generally fully invested in ETFs. Like traditional mutual funds, ETFs charge asset-based fees, but they generally do not charge initial sales charges or redemption fees and investors typically pay only customary brokerage fees to buy and sell ETF shares. The fees and costs charged by ETFs held in client accounts will not be deducted from the compensation the client pays Navellier. ETF prices can fluctuate up or down, and a client account could lose money investing in an ETF if the prices of the securities owned by the ETF go down. ETFs are subject to additional risks:

  • ETF shares may trade above or below their net asset value;
  • An active trading market for an ETF’s shares may not develop or be maintained;
  • The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track;
  • The cost of owning shares of the ETF may exceed those a client would incur by directly investing in the underlying securities; and
  • Trading of an ETF’s shares may be halted if the listing exchange’s officials deem it appropriate, the shares are delisted from the exchange, or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally.

Grader Disclosures: Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. The sample portfolio and any accompanying charts are for informational purposes only and are not to be construed as a solicitation to buy or sell any financial instrument and should not be relied upon as the sole factor in an investment making decision. As a matter of normal and important disclosures to you, as a potential investor, please consider the following: The performance presented is not based on any actual securities trading, portfolio, or accounts, and the reported performance of the A, B, C, D, and F portfolios (collectively the “model portfolios”) should be considered mere “paper” or pro forma performance results based on Navellier’s research.

Investors evaluating any of Navellier & Associates, Inc.’s, (or its affiliates’) Investment Products must not use any information presented here, including the performance figures of the model portfolios, in their evaluation of any Navellier Investment Products. Navellier Investment Products include the firm’s mutual funds and managed accounts. The model portfolios, charts, and other information presented do not represent actual funded trades and are not actual funded portfolios. There are material differences between Navellier Investment Products’ portfolios and the model portfolios, research, and performance figures presented here. The model portfolios and the research results (1) may contain stocks or ETFs that are illiquid and difficult to trade; (2) may contain stock or ETF holdings materially different from actual funded Navellier Investment Product portfolios; (3) include the reinvestment of all dividends and other earnings, estimated trading costs, commissions, or management fees; and, (4) may not reflect prices obtained in an actual funded Navellier Investment Product portfolio. For these and other reasons, the reported performances of model portfolios do not reflect the performance results of Navellier’s actually funded and traded Investment Products. In most cases, Navellier’s Investment Products have materially lower performance results than the performances of the model portfolios presented.

This report contains statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are “forward-looking statements” within the meaning of The U.S. Private Securities Litigation Reform Act of 1995. These statements may be identified by such forward-looking terminology as “expect,” “estimate,” “plan,” “intend,” “believe,” “anticipate,” “may,” “will,” “should,” “could,” “continue,” “project,” or similar statements or variations of such terms. Our forward-looking statements are based on a series of expectations, assumptions, and projections, are not guarantees of future results or performance, and involve substantial risks and uncertainty as described in Form ADV Part 2A of our filing with the Securities and Exchange Commission (SEC), which is available at or by requesting a copy by emailing All of our forward-looking statements are as of the date of this report only. We can give no assurance that such expectations or forward-looking statements will prove to be correct. Actual results may differ materially. You are urged to carefully consider all such factors.

FEDERAL TAX ADVICE DISCLAIMER: As required by U.S. Treasury Regulations, you are informed that, to the extent this presentation includes any federal tax advice, the presentation is not written by Navellier to be used, and cannot be used, for the purpose of avoiding federal tax penalties. Navellier does not advise on any income tax requirements or issues. Use of any information presented by Navellier is for general information only and does not represent tax advice either express or implied. You are encouraged to seek professional tax advice for income tax questions and assistance.

IMPORTANT NEWSLETTER DISCLOSURE:The hypothetical performance results for investment newsletters that are authored or edited by Louis Navellier, including Louis Navellier’s Growth Investor, Louis Navellier’s Breakthrough Stocks, Louis Navellier’s Accelerated Profits, and Louis Navellier’s Platinum Club, are not based on any actual securities trading, portfolio, or accounts, and the newsletters’ reported hypothetical performances should be considered mere “paper” or proforma hypothetical performance results and are not actual performance of real world trades.  Navellier & Associates, Inc. does not have any relation to or affiliation with the owner of these newsletters. There are material differences between Navellier Investment Products’ portfolios and the InvestorPlace Media, LLC newsletter portfolios authored by Louis Navellier. The InvestorPlace Media, LLC newsletters contain hypothetical performance that do not include transaction costs, advisory fees, or other fees a client might incur if actual investments and trades were being made by an investor. As a result, newsletter performance should not be used to evaluate Navellier Investment services which are separate and different from the newsletters. The owner of the newsletters is InvestorPlace Media, LLC and any questions concerning the newsletters, including any newsletter advertising or hypothetical Newsletter performance claims, (which are calculated solely by Investor Place Media and not Navellier) should be referred to InvestorPlace Media, LLC at (800) 718-8289.

Please note that Navellier & Associates and the Navellier Private Client Group are managed completely independent of the newsletters owned and published by InvestorPlace Media, LLC and written and edited by Louis Navellier, and investment performance of the newsletters should in no way be considered indicative of potential future investment performance for any Navellier & Associates separately managed account portfolio. Potential investors should consult with their financial advisor before investing in any Navellier Investment Product.

Navellier claims compliance with Global Investment Performance Standards (GIPS). To receive a complete list and descriptions of Navellier’s composites and/or a presentation that adheres to the GIPS standards, please contact Navellier or click here. It should not be assumed that any securities recommendations made by Navellier & Associates, Inc. in the future will be profitable or equal the performance of securities made in this report.

FactSet Disclosure: Navellier does not independently calculate the statistical information included in the attached report. The calculation and the information are provided by FactSet, a company not related to Navellier. Although information contained in the report has been obtained from FactSet and is based on sources Navellier believes to be reliable, Navellier does not guarantee its accuracy, and it may be incomplete or condensed. The report and the related FactSet sourced information are provided on an “as is” basis. The user assumes the entire risk of any use made of this information. Investors should consider the report as only a single factor in making their investment decision. The report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. FactSet sourced information is the exclusive property of FactSet. Without prior written permission of FactSet, this information may not be reproduced, disseminated or used to create any financial products. All indices are unmanaged and performance of the indices include reinvestment of dividends and interest income, unless otherwise noted, are not illustrative of any particular investment and an investment cannot be made in any index. Past performance is no guarantee of future results.