by Louis Navellier

February 23, 2022

Most Americans realize that Russia has tremendous leverage over Europe, due to its massive reserves of crude oil, natural gas and other petroleum products, but they don’t realize Russia also has some leverage over the U.S. The U.S. has been importing more crude oil from Russia, especially on the West Coast, due to the decline of Alaska’s crude oil output. So, if the U.S. did what Germany just did and tried to curtail Russian energy imports, then the record prices at the pump on the West Coast could soar higher, so the Biden Administration is in a conundrum, since $5 per gallon gasoline is now common in California. Here is a link to a chart from the Energy Information Administration on U.S. crude oil imports from Russia:

In response to Russia’s initial incursion, Ukraine may potentially cut off electricity in the breakaway regions, just like it did when Russia seized Crimea back in 2014 – which ironically also happened just after the close of the Winter Olympics.  However, this time around, Russia has a nuclear power plant on board a big barge, so Russia can more quickly turn on the power.  Ironically, Crimea did not rattle the stock market too much in 2014, so I expect a similarly muted market reaction this time around.

Naturally, Russia may not stop at “recognizing” these two breakaway regions in Eastern Ukraine, but for now, Putin has made the West look weak and disorganized.  Putin has also tried to “sanction proof” the Russian economy, so it will be interesting to see how the Biden Administration, Britain, France and Germany respond.  Despite a potential rift between Germany and the U.S., I am sure that the West will try to show a united front, but Putin is apparently not afraid of economic sanctions and has tremendous economic leverage over Germany and other European nations that are dependent on Russian natural gas.

One other factor in these warnings about war with Ukraine is the “Wag the Dog” narrative – the habit of some politicians to mask their domestic problems with war rhetoric. Joe Biden has runaway inflation and other financial challenges at home, so forcing our attention to Ukraine helps change the media focus. He is clearly using the Russian/Ukrainian situation to distract our attention from bigger problems at home.

No politician is in more trouble right now than Canada’s Prime Minister Justin Trudeau, who is widely seen to have grossly mismanaged the Canadian trucker protests, which have expanded in Ottawa and are largely being fueled by Trudeau’s prolonged and stringent Covid-19 vaccine booster and mask mandates.

And then there’s British Prime Minister Boris Johnson, who seemed to ignore the uproar over his “bring your own booze” parties by staging another party at his residence, causing charges of hypocrisy about mask wearing and social distancing – so Johnson simply lifted virtually all of the Covid-19 restrictions!

China is Also Pushing “Green Energy” in Europe

Like Russia, China is pretty good at pushing the “green energy” buttons for Western Europe. It is already exporting EVs with cheaper iron-phosphate batteries, led by Tesla, but also followed by BYD, NIO, and MG (built in China by SAIC). Polestar is based in Sweden, but owned by Geely Holding in China. SAIC has been VW’s partner in China, but it is now competing directly with VW in Europe via its MG Marvel R Electric SUV. Geely is also expected to begin selling other Chinese EVs in Europe. Overall, I find it interesting that both China (via cheaper battery technology and EVs) and Russia (via natural gas) are pushing the “green” buttons in Europe to bolster their respective economies and market dominance.

One of the most interesting news tidbits about Tesla is that it is apparently not paying any U.S. corporate taxes, despite posting a $5.5 billion record profit in 2021. That’s because Tesla’s U.S. operations lost $130 billion in 2021, which means that virtually all of its profits were attributable to its Shanghai plant, where most if its electric vehicles are produced with iron-phosphate batteries from CATL.

Furthermore, BYD’s new blade batteries have gotten Tesla’s attention and it has been reported that Tesla may soon be producing cars with BYD’s innovative blade battery. Essentially, Tesla and virtually all its major competitors in the U.S. are making EVs with lithium-ion batteries. China’s domestic battery makers, like CATL & BYD, are becoming more dominant than ever before and making cheaper batteries than LG Chem, Panasonic, Samsung, SK Innovations, and other manufacturers of lithium-ion batteries.

Although CATL’s patent on iron-phosphate batteries has expired – so that other battery manufacturers can also make iron-phosphate batteries for VW Group and other manufacturers – the fact of the matter is that China’s lead in affordable battery technology is very impressive. Only the development of solid-state batteries by Panasonic and QuantumScape can potentially thwart China’s battery leadership.

Navellier & Associates does own Tesla (TSLA), for a few clients, per client request in managed accounts,    Panasonic Corp. (PCRFY), and Volkswagen Ag. (VWAGY), but we do not own Quantumscape  Kensington Capital Acquisition Corp (QS). Louis Navellier does not own Tesla (TSLA), or Quantumscape  Kensington Capital Acquisition Corp (QS), but does personally own Panasonic Corp. (PCRFY), and  Volkswagen Ag. (VWAGY), via a Navellier managed account.

Producer Prices Rise 1% in January & Nearly 10% Annually

Last Tuesday, the Labor Department reported that the Producer Price Index (PPI) surged 1% in January, which was substantially higher than the economists’ consensus estimate of a 0.5% increase. Excluding food, energy, and trade services, the core PPI rose 0.9% in January, which was also substantially above the economists’ consensus estimate of 0.4%. Wholesale food and energy prices surged 1.6% and 2.5%, respectively in January, so the prices at the grocery store and the pump were clearly rising. Service costs continue to rise, so wholesale inflation remains strong, even when food and energy are excluded.

In the past 12 months, the PPI is up a whopping 9.7%, the highest on record, with the core PPI up 6.9%.

Energy prices are volatile – that’s why they are not included in the “core” PPI. Case in point: Crude oil prices fell over $4 per barrel on Tuesday, based on reports that Russia pulled back some troops from the Ukraine border. Russia continued large scale maneuvers near the Ukrainian border as talks with German Chancellor Olaf Scholz commenced. Since Germany is potentially Russia’s largest energy client (if and when the Nord Stream 2 pipeline comes online), the outcome of this meeting will be carefully scrutinized.

In other economic news, the Commerce Department on Wednesday announced that retail sales soared 3.8% in January, substantially faster than the economists’ consensus estimate of 2.1%, but December retail sales were revised lower to a 2.5% decline from a 1.9% drop previously reported. January online sales surged 14.5%, vehicle sales rose 5.7%, and electronics/appliance sales increased 4.6%. Excluding vehicle sales, retail sales still rose an impressive 3.3% in January. Sales at bars and restaurants declined 0.9% in January, while gas station sales dipped 1.3%, a sign that consumers may becoming more cautious with their disposable income. Overall, in the wake of January’s surprising retail sales report, the Atlanta Fed revised its first-quarter GDP estimate up to an annual rate of 1.5%, from 0.7% previously estimated.

The Federal Open Market Committee (FOMC) minutes were released on Wednesday, and Wall Street seemed excited that the FOMC members said that if inflation does not move down as they expect, “it would be appropriate for the committee (FOMC) to remove policy accommodation at a faster pace than they currently anticipate.” Translated from Fedspeak, the Fed finally realizes it is behind the curve and needs to unwind its quantitative easing and raise rates a bit faster. The FOMC minutes also said, “Most participants suggested that a faster pace of increases in the target range for the federal-funds rate than in the post-2015 period would likely be warranted.” (There was a full year between the first and second rate increases in 2015 and 2016.) Right now, it appears that unwinding quantitative easing seems to be the Fed’s primary focus, so that it can clear the decks and start raising the federal funds rate next month.

On Thursday, the Labor Department announced that weekly jobless claims rose to 248,000 vs. a revised 225,000 in the previous week. Continuing unemployment claims declined to 1.593 million vs. a revised 1.619 million previously. Weekly jobless claims remain elevated, but continuing claims keep declining.

On Friday, the National Association of Realtors announced that existing home sales rose 6.7% in January to an annual pace of 6.5 million. The inventory of existing homes for sale declined to 860,000, reflecting an ultra-tight 1.6-month supply at the current sales rate. The median home sale price in January rose to $350,300, which is up 15.4% in the past 12 months. Existing home sales were strong in all four U.S. regions surveyed. Despite the fact that mortgage rates are now back above 4% (median mortgage rates were at 3.45% at the end of January), median home prices are expected to rise due to tight inventories.

Finally, Nvidia (NVDA) announced on Wednesday that its fourth-quarter revenue rose 52.8% to $7.64 billion, which was 2.9% better than analysts expected. The company’s earnings rose 103.4% to $3 billion or $1.18 per share, while its operating earnings of $1.22 per share were 8.2% better than the analysts’ consensus estimate. This essentially marks the end of the quarterly announcement season, so some consolidation is expected between now and mid-March, when quarter-end window dressing commences.

Do not worry about any consolidation, since this is normal. As long as forecasted sales and earnings remains strong, I plan on sticking with my stocks, regardless of any temporary price retracement.

Navellier & Associates owns Nvidia Corp (NVDA), in managed accounts. Louie Navellier and his family own Nvidia Corp (NVDA), via a Navellier managed account.

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

Please see important disclosures below.

Also In This Issue

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.