by Louis Navellier

December 19, 2023

The Labor Department announced last Tuesday that the Consumer Price Index (CPI) rose by 0.1% in November, and 3.1% in the past 12 months. Excluding food and energy, the core CPI rose 0.3% in November, and 4% in the past 12 months. Food prices rose 0.2%, and energy prices declined 2.3%, due largely to a 6% decline in gasoline prices. Natural gas and propane prices rose 2.8% in November due largely to colder weather. Owners’ equivalent rent (shelter costs) rose 0.4% in November, and 5.5% in the past year. This was a bit disappointing, so the Fed will keep rates steady until inflation approaches 2%.

On Wednesday, the Labor Department announced that the Producer Price Index (CPI) was unchanged in November, and rose only 0.9% in the past 12 months. Excluding food, energy and trade, the core PPI rose just 0.1% in November, and 2.5% in the past 12 months. Wholesale food prices rose 0.6%, and energy prices declined 1.2% in November. Wholesale service costs rose 0.2%, while goods rose 0.1%.  The PPI report was positive, reflecting inflation well under the Fed’s 2% target rate, balancing out the higher CPI.

After these two reports came out, at the December Federal Open Market Committee (FOMC) meeting on Wednesday, the Fed revealed that the “dot plot” from all 17 FOMC voting members foresee three rate cuts in 2024. Furthermore, three to four more rates cuts are anticipated in 2025, until the Fed Funds rate hits 3.5% to 3.75%. In total, the FOMC dot plot revealed six to seven key interest rates cuts planned for the next two years. However, if the Fed wants to stay out of the 2024 political arena, perhaps the FOMC might want to start earlier and make the most of these interest rates cuts before the November Presidential election. Also notable is that Treasury yields plunged after that FOMC announcement, so the 10-year Treasury bond now yields just 3.93%, down over 100 basis points from a peak of 4.99% on October 19th.

In his press conference after the FOMC statement, Chairman Powell said he would not even wait until the Fed’s favorite inflation indicator (the PCE Index) hits 2%, for fear of “overshooting” on the downside and risking deflation, so the Fed may cut rates sooner. The monthly CPI increases were the largest last year from January to May 2023 – at 0.41%, 0.45%, 0.38%, 0.41% and 0.44%, respectively. Once these large gains are past, gains ranged from 0.18% to 0.32% in the second half, so 12-month gains will be lower.

Fed Chairman Jerome Powell’s press conference on Wednesday was closely scrutinized, but for once Mr. Powell stuck to the FOMC script and strived to reassure his audience that inflation was cooling off fast.

Also, in a Wall Street Journal interview last Tuesday, Treasury Secretary Janet Yellen argued for a “soft landing,” which she described as, “The economy continues to grow, the labor market remains strong and inflation comes down.” Regarding inflation, Yellen added, “I see no reason, on the path that we’re currently on, why inflation shouldn’t gradually decline to levels that are consistent with the Fed’s mandate and targets.” I should add that my favorite economist, Ed Yardeni, last week praised Yellen for managing the recent Treasury auctions better, allowing the long-term Treasury bond yields to continue to decline.

The European Central Bank (ECB) followed the Fed’s lead last week by not changing its key interest rate. However, the HCOB Flash Eurozone Composite PMI Output Index, which is a gauge of activity in the Eurozone manufacturing and services sectors, fell to 47.0 from 47.6 in November, the seventh straight monthly decline. Since any reading below 50 signals a contraction, the eurozone economy is sputtering.

In other economic news, the Commerce Department announced on Thursday that retail sales rose 0.3% in November, substantially more than the consensus estimate of a -0.1% decline. Excluding vehicle and gasoline sales, retail sales rose by a more impressive 0.6%, which is way above the 0.1% increase in October!  In the past 12 months, retail sales have risen 4.1%. Spending at bars and restaurants surged 1.6% in November, which is always a good sign, demonstrating that consumers are getting out and about.

I expect some upward GDP revisions due to rising November retail sales. Sure enough, the Atlanta Fed revised its fourth-quarter GDP estimate up to a 2.6% annual pace (from 1.2%, previously estimated).

Global News Reflects Dramatic Changes in Several Nations

We’re seeing several dramatic changes in Argentina, Ukraine, the Middle East, Canada and Venezuela:

Argentina’s new President, Javier Milei, was sworn in and promised deep spending cuts. He promised to avoid pursuing vendettas, and said he would welcome “with open arms” anyone who shared his vision of rebuilding Argentina under a new social contract where “the state does not direct our lives,” and instead “looks after our rights.” The Argentina business community has welcomed Milei. As Milei took his oath of office, the legislature shouted, “Freedom!” But former President Fernandez de Kirchner raised her middle finger to Milei’s supporters as she entered into the legislature for the swearing in ceremony.

The first decisive action by Milei is that his government devalued the Argentina peso by 54% on Tuesday. The central bank will continue to devalue the Argentina peso by 2% per month. Milei also announced massive spending cuts to curb government spending to 2.9% of its GDP. These austerity measures were praised by the International Monetary Fund, which in the past has often had to rescue Argentina.

In Ukraine, President Volodymyr Zelensky visited Washington DC after attending Milei’s inauguration in Argentina. Obviously, he is looking for more U.S. aid, since Congress has become wary of further aid to Ukraine due to growing concerns about the theft of U.S. aid. The Biden Administration wants to provide Ukraine, Israel and other national security interests with an additional $110 billion in aid, but Republicans in Congress are insisting on improving our border security too, before passing additional international aid.

Additionally, the U.S. military has refused to be audited by an inspector general regarding its Ukraine aid, despite a bipartisan Senate request. As a result, Zelensky will likely be disappointed and may be forced to agree to a temporary cease fire, even though Russia may not accept a long-term cease fire agreement.

Likewise, the European Union cannot agree on a $54 billion aid package to Ukraine, so both American and EU funding for Ukraine seem in jeopardy. To appease Ukraine, the EU agreed to start membership talks with Ukraine. EU negotiations typically take years and could be derailed at any time along the way. Also, a country cannot join the EU unless its borders are defined, so Ukraine may have to forfeit some of its Eastern and Southern land to Russia. Clearly, Ukraine is desperate, so its future remains uncertain.

Turning to the Middle East, there have now been over 100 attacks on U.S. military facilities and ships in the region around Israel, since the initial Hamas attack on October 7th. The Iran-backed Houthi rebels in Yemen have been aggressive, trying to hit the USS Carney and USS Mason. Obviously, the U.S. will have to respond decisively. Otherwise, they are just encouraging more attacks on U.S. assets by Iran’s proxies.

COP28 wound down in Dubai with attendees struggling for days to debate the wording of a joint statement. Extremists, including the Pope, call for a complete ban on fossil fuels, but big emerging market economies, like Brazil, China and India, continue to emit more carbon dioxide and seem addicted to fossil fuels. As a result, a “watered down” COP28 draft called for “reducing consumption and production of fossil fuels.”  This compromise is due to the fossil fuel industry dominating the annual climate conference, which is frustrating for John Kerry, Al Gore and others critical of the energy industry.

Furthermore, the OPEC+ countries at COP28, led by Saudi Arabia, refuse to sign any phase-out of fossil fuels. As a result, the final COP28 joint statement merely said that countries will transition away from fossil fuels in a “just and orderly” fashion – two key words – because as long as fossil fuels are cheaper than green alternatives, any transition will be slow, taking longer than most of our lifetimes.

Canada has said it will impose a cap-and-trade system to curb emissions on its domestic oil and natural gas industry. Specifically, Canada’s “draft framework” (to be finalized in 2025), will allow oil-and-gas production output to be capped at a level between 35% and 38% below 2019 levels, beginning in 2030. The government will then keep lowering allowances in stages until the industry reaches net zero by 2050.

I think it is safe to say that Canada’s Prime Minister Justin Trudeau is not very popular in energy-rich Alberta, so when the next election is declared, Alberta and other Western provinces will fiercely oppose Trudeau’s party. Canada is also shrinking in population, as many of its citizens move to other countries. Immigrants to Canada have also complained about the cost of living and are increasingly leaving Canada.

In other energy news, Ford cut its 2024 production targets for its F-150 Lightening electric vehicle (EV) to 1,600 per week, down from its previous plan to make 3,200 EVs per week at its plant in Dearborn, Michigan. The company also reduced the production of its Mach-e in Mexico, and downsized its new Michigan battery plant by approximately 50%. Ford’s proposed battery plant in Kentucky is now at half production. In a statement, Ford said, “We will continue to match production to customer demand.”

The Energy Information Administration (EIA) reported on Wednesday that crude oil inventories declined by 4.3 million barrels in the latest week, which is much larger than the consensus estimate of a 2.7 million barrel decline. Gasoline inventories rose by 400,000 barrels and distillates (diesel, heating oil, jet fuel) inventories rose by 1.5 million barrels in the latest week, so the prices at the pump are expected to remain low for the foreseeable future. Normally, the Strategic Petroleum Reserve (SPR) should be refilled in the winter months, when crude oil prices are seasonally low, but the federal budget battles are not allocating sufficient money to significantly refill the SPR after it was depleted by 40% before the mid-term elections.

Venezuela President Nicolas Maduro and Guyana President Irfaan Ali met on Thursday, and both counties agreed to avoid using arms against each other as talks continued. Their next meeting will be in Brazil within two months. Ali said that major oil companies operating in Guyana’s waters were “moving ahead aggressively” with their production plans. Guyana’s government said it would award new offshore oil blocks by the end of the year. Maduro said some of those blocks are in waters belonging to Venezuela. Clearly, Venezuela seeks Guyana’s crude oil revenue, so the Brazilian round of talks will be interesting.

In closing, I noticed that the SEC is now asking investment advisors how they utilize AI and oversee AI. Specifically, the SEC wants information on algorithmic models as well as marketing materials. SEC Chairman Gary Gensler has repeatedly warned that AI could lead to a financial crisis, create instability and “drive us off an inadvertent cliff.”  Hmmm. I suspect that Gensler is worried that many AI models do not properly account for the fact that market liquidity can disappear, so he may be rightly concerned that AI models may try to sell stocks when there are few or minimal buyers, which could trigger a flash crash.

I would concur with his concerns, and we have written about this danger in the past – with or without AI, due to high-frequency trading (HFT). My associate Jason Bodner has written two or three special white papers addressing this risk, but the investment lesson is that markets generally bounce back after a “flash crash,” so they can provide buying opportunities with no long-term damage during a strong bull market.

Navellier & Associates owns Ford Motor Co. (F), in managed accounts. Louis Navellier and his family do not own Ford Motor Co. (F), personally.

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

Please see important disclosures below.

Also In This Issue

Global Mail by Ivan Martchev
Fed Chair Jerome Powell Goes Full Circle

Sector Spotlight by Jason Bodner
Long (and Super-Short) Cycles in Nature and in Markets

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.