by Louis Navellier
March 31, 2026
The Wall Street Journal said the current backchannel diplomacy with Iran involves foreign ministers from Egypt, Pakistan, Saudi Arabia and Turkey. Egypt has opened a channel with the Iranian Revolutionary Guard Corps (IRGC) and put forth a proposal to halt hostilities for five-days with the goal of building confidence toward a cease-fire, and White House press secretary Karoline Leavitt said these are “sensitive diplomatic discussions, and the U.S. will not negotiate through the press,” adding, “This is a fluid situation.”
The Trump team has delivered a 15-point peace plan to Pakistan to deliver to Iran, and The Wall Street Journal has reported Iran’s Parliament speaker (and mayor of Tehran), Mohammad-Bagher Ghalibaf, may be the person the Trump administration is negotiating with. According to CNN, Vice President J.D. Vance may travel to Pakistan to facilitate further negotiations, as President Trump is expecting a cease-fire soon.
On Thursday after the market closed, President Trump announced the U.S. was pausing strikes on Iran’s energy sector for 10 more days, to April 6th, so peace negotiations can continue. On Truth Social, he wrote, “Talks are ongoing and, despite erroneous statements to the contrary… they are going very well.”
Ideally, any ceasefire will emerge soon, helping the Strait of Hormuz to reopen. After the U.S. shut-down Iran’s deep-water port on Kharg Island – which accounts for about 90% of Iran’s crude oil exports – this will increase the leverage the U.S. has on Iran, since that is where the IRGC gets much of its revenue. It will also be interesting to see if the U.S. Marines take control of Iran’s deep-water port on Kharg Island.
In other words, the fog of war persists, while global economic issues are emerging now as the primary reason to implement a cease-fire. Why? I think it is safe to say President Trump wants lower crude oil prices fairly soon, so the Trump administration will continue to strive to reopen the Strait of Hormuz.
It is also imperative we see fertilizer shipments resume passing through the Strait of Hormuz, since food prices are expected to remain high if fertilizers cannot boost crop yields during the planting season.
Ironically, California is now increasingly dependent on imported gasoline from India and South Korea due to ongoing refinery shutdowns. In fact, $8 per gallon gasoline in California is now possible due to the Valero refinery in Benicia shutting down in April, plus the seasonal switch to more expensive summer fuel blends. So ironically, California is becoming more dependent on crude oil from the Middle East!
In the meantime, there were some major Treasury auctions last week, as the yields on two-year Treasury notes rose on Tuesday, but the five-year note auction on Wednesday appeared to go better, as yields meandered lower. Due to our $39-trillion deficit, the Trump administration has to make the U.S. an attractive destination for capital in the world. Frankly, due to higher yields in the U.S. than in most of Asia and Europe, the U.S. dollar should continue to strengthen and attract capital. In the meantime, Treasury Secretary Scott Bessent is doing a great job keeping the bond vigilantes away for the time being.
Inflation May Resume, Short-Term, But Interest Rates Still Need to Come Down
As soon as the new Fed Chairman Kevin Warsh takes over in May, key interest rates are expected to resume. The Fed tends to ignore food and energy inflation, which was substantial in the February inflation reports and is expected to soar in the March inflation reports – especially in the Consumer Price Index (CPI) and Producer Price Index (PPI). Warsh is expected say the productivity gains from AI are not inflationary and will boost U.S. GDP growth. It is imperative Warsh take over and lead the FOMC, since too many Fed members act like “deer in the headlights,” with no confidence in their econometric models.
The Labor Department on Wednesday said import prices surged 1.3% in February, the highest level in four years and well above economists’ consensus estimate of 0.6%. The price of imported petroleum products rose 2.5% in February, while non-petroleum imports rose 1.2%. This surge in import prices is expected to continue to soar in March, so an inflation “bubble” will be boosting prices in the upcoming months, and hopefully this bubble will “pop” in the fall, which will allow the Fed to continue to cut rates.
In case it is not obvious yet, the U.S. is expected to control world energy markets with its actions in the Caribbean, North America and now Middle East energy producers. Lower energy prices in the U.S. are imperative to President Trump after windfall profits rose for many LNG, natural gas, refineries and crude oil producers. Due to an anticipated glut of crude oil in the upcoming months, I am reluctant to add many energy related companies, unless the analyst community dramatically boosts their forecasted earnings.
The most explosive growth remains in the tech stocks associated with the data center boom. Nvidia CEO Jensen Huang said he expects at least $1-trillion in demand for its Blackwell and Rubin AI systems through 2027, up from about $500-billion in projected demand through 2026. In other words, Nvidia will be averaging over 100% annual sales growth! Micron Technology recently announced its revenue surged 196.3% to $23.86-billion in its latest quarter compared to a year ago. The analyst community is now estimating Micron Technology’s revenue will rise by a whopping 258% in its current quarter.
Interestingly, the data center related stock with the second strongest sales growth after Micron Technology is Super Micro Computer (SMCI), with an amazing 171% forecasted first-quarter sales growth due to its massive order backlog. SMCI is now trading at less than 10 times its 2026 forecasted earnings after it suspended three people charged with selling Nvidia GPUs to China via Taiwan. Super Micro Computer accounts for approximately 9% of Nvidia’s GPU sales, so I am planning on sticking with the stock despite its recent setback. In fact, SMCI is now so cheap I would not be surprised if it is acquired soon!
Despite the food and energy inflation caused by the Strait of Hormuz closure, I am expecting central banks to cut key interest rates in the upcoming months to stimulate their respective economies. The Fed should join the global rate cut parade in May, when Kevin Warsh takes over as the new Fed Chairman.
As the Fed cuts and uncertainty dissipates, the 5% annual GDP growth I have predicted should still occur as soon as the second quarter. Improving weather should help boost consumer confidence, especially after severe winter weather impeded first quarter GDP growth. U.S. GDP growth is being boosted by massive productivity gains, strong export growth from gold, LNG, refined products and crude oil, plus steady consumer spending. Housing remains a weak link – at least until the Fed cuts key interest rates further.
It should become increasingly obvious to investors the U.S. remains the key to boosting GDP growth. Just like the U.S. is improving Venezuela’s economic outlook, Cuba is expected to follow and allow the U.S. to help it restore and replace much of its aging power grid. Naturally, the closure of the Strait of Hormuz has hurt Europe, India and Asia, but not the U.S. As soon as the Strait of Hormuz reopens, I expect global energy prices to decline, especially if a glut of crude oil emerges. The U.S. is increasing its control of global energy supplies due to its dominance in LNG, refined products and crude oil. Furthermore, the U.S. now has more influence on other major Caribbean, North American and Middle Eastern energy producers.
The U.S. remains the economic growth engine of the world and international investors are expected to continue to gravitate to the U.S. due to stronger GDP growth as well as an improving U.S. dollar. President Trump delayed his trip to China due to the crisis in the Strait of Hormuz, but ironically, even China needs the U.S. to reopen the Strait of Hormuz since it gets 80% of its oil from the Middle East.
In the meantime, our best defense remains a strong offense of fundamentally superior stocks reporting stunning sales, earnings, upside surprises and positive guidance. Stocks like Micron Technology and Nvidia remain market leaders. Even Super Micro Computer has 171% forecasted sales growth and now trades at less than 10 times this year’s forecasted earnings, so I think it may be acquired in the upcoming months. This is a good time to remind everyone – good stocks “bounce,” so I expect many of our fundamentally superior stocks to quickly resurge by 20% or more in the upcoming weeks!
For example, Argan (AGX) surged 37.9% on Friday after announcing its fiscal fourth-quarter sales rose 12.7% to $262.1-million (compared to $232.5-million). During the same period, the company’s earnings rose 56.3% to $49.2-million or $3.47 per share compared to $31.4-million or $2.22 per share.
The analyst community was expecting Argan sales of $255.3-million and earnings of $1.98 per share, so Argan posted a 2.7% sales surprise and a 75.3% earnings surprise. Since Argan is data center-related, it is also helping to lift other data center stocks, a sector which continues to exhibit relative strength.
Navellier & Associates; own Nvidia Corp (NVDA), Super Micro Computer, Inc. (SMCI), Argan, Inc. (AGX), and Micron Technology, Inc. (MU), in managed accounts. Louis Navellier and his family own Nvidia Corp (NVDA), Super Micro Computer, Inc. (SMCI), Argan, Inc. (AGX), and Micron Technology, Inc. (MU), via a Navellier managed account and Nvidia Corp (NVDA), in a personal account.