by Louis Navellier
April 1, 2025
In North America, cooler heads seem to be prevailing, with new trade agreements anticipated with both Canada and Mexico as “Liberation Day” (April 2nd) approaches. The European Union (EU) is being more difficult, however, partly due the fact that the EU does not have strong or unified leaders. The strongest EU economies – Germany and France – have weak ruling coalitions under French President Macron and German Chancellor Merz. President Trump has made it clear that the German auto industry is welcome to move their manufacturing plants to America, where they can benefit from: (1) electricity that is one-fourth the cost it would be in Germany, (2) cheaper labor costs, (3) multiple states fighting for their business, (4) work VISAs for their employees who want to move to America, and (5) less oppressive regulations.
The other option for Germany is to lower their import duties on American vehicles (10% on cars and 25% on trucks & SUVs) to the same low 2.5% tariff the U.S. charges on imported vehicles from the EU.
Toward that end, the EU’s trade enforcer, Maros Sefcovic, was scheduled to meet with Howard Lutnick and trade representative Jamieson Greer last week. It will be interesting to see if the EU will “blink,” since they have been stubbornly resisting any modifying of their EU tariffs. All the Trump Administration is essentially proposing is that we treat the EU like they treat Americans, so they needn’t act so outraged.
In response to Europe’s stubbornness, President Trump signed an executive order implementing 25% tariffs on all imported vehicles, effective April 2nd. As a result, BMW, Mercedes and VW Group (Audi, Bentley, Lamborghini, Porsche and VW) will now have to explore expanding their plants within the U.S. (As far as USMCA is concerned, this 25% tariff will only be imposed on non-U.S. content).
United Auto Worker (UAW) President Shawn Fein had been a big critic of President Trump, but after the 25% tariff announcement, the UAW said, “We applaud the Trump Administration for stepping up to end the free trade disaster that has devastated working-class communities for decades. Ending the race to the bottom in the auto industry starts with fixing our broken trade deals, and the Trump Administration has made history with today’s actions.” The UAW statement added, “The UAW has been clear: We will work with any politician, regardless of party, who is willing to reverse decades of working-class people going backwards in the most profitable times in our nation’s history. These tariffs are a major step in the right direction for autoworkers and blue-collar communities across the country, and it is now on the automakers, from the Big Three to Volkswagen and beyond, to bring back good union jobs to the U.S.”
If Shawn Fein visits the White House, I suspect Trump will give him a MAGA hat.
Interestingly, the EU is still trying to force the European auto industry to make 100% EVs by 2035, while in America, such EV mandates are collapsing. Since German auto manufacturers have largely not been able to make any money on EVs, they might be willing to increasingly onshore in America to make the internal combustion engine (ICE) vehicles that most consumers demand, so the Trump tariffs are largely about settling trade imbalances and/or forcing foreign corporations to increasingly onshore in America.
In other offshoring news, Apple’s Tim Cook and Nvidia’s Jensen Huang met with President Trump, and they announced $500-billion and $100-billion, respectively, in on-shoring projects in America. Although $1.2-trillion in technology on-shoring has already been announced, after more pharmaceutical and vehicle production on-shoring is announced, there could be several trillion dollars of on-shoring announced. That is the real goal of the Trump 2.0 tariffs – which you will not hear from the hostile media, or foreign media.
Some nations learn quickly, and they will profit. The U.S. has a massive trade deficit with Vietnam, due to some manufacturing shifts from China to Vietnam. That deficit hit $123.5-billion last year, the third highest, behind only China and Mexico. Based on the fear that the Trump Administration would impose reciprocal tariffs, Vietnam has cut its tariffs on vehicles, LNG, ethanol and various agricultural goods. Furthermore, Vietnam has tried to placate the Trump Administration by not having any limit on U.S. imports. They will profit from being that flexible early in the game, thereby avoiding any punitive tariffs.
The Balance of Economic News Does Not Indicate a “Real” Recession
Without knowing Monday’s closing market levels, the S&P 500 is down 6.27% in March and -5.11% for the year-to-date, as of Friday, and NASDAQ was down 10.3% for the year. As tariff mania took hold of the stock market since its mid-February peak, we now hear of recession talk after the Atlanta Fed’s GDPNow forecast of -2.8% negative GDP, which rattled investors further. However, none of the economic tea leaves signal a real (economic, or production-oriented) recession, such as the Purchasing Managers’ Indexes (PMIs), or in retail sales, factory output, existing home sales or unemployment rates.
Instead, the Atlanta Fed’s recession barometer relies solely on trade deficits caused by the dumping of goods to beat impending tariffs. That triggered the Atlanta Fed’s model to forecast negative GDP growth.
The trade deficit is now deducting a whopping 4% from first-quarter GDP growth, so if you exclude the trade deficit, our economy is growing! One reason that the trade deficit has ballooned is that the imports of gold surged 25% in February, after soaring 43% in January, based on Comex stockpiles. The inventory of silver is also surging. Imports of gold from Switzerland have reached the highest level since 2012.
The ultimate irony is that this “dumping” of goods in the first quarter is likely to promote deflation, not inflation, since: (1) it creates a surfeit of goods, and (2) it reflects the deflation which has enveloped the Chinese economy, so while the financial media is promoting the narrative that “tariffs are inflationary,” deflation has already emerged and central banks will have no other choice than to slash key interest rates.
Last Tuesday, the Conference Board survey reflected the downbeat mood of the media when it announced that its consumer confidence index plunged to 92.9 in March, down from 101.1 in February. Economists were expecting a 94.5 reading, so this was a big disappointment. The “expectations” component is now at 65.2 (down from 74.8 in February), its lowest level in 12 years, while the “present situation” component fell to 134.5 (from 138.1 in February). This is the fourth straight month that consumer confidence has declined, so if the Fed needs any reason to cut key interest rates, this should convince the FOMC to act.
Next, on Wednesday, the Commerce Department announced that durable goods orders rose 0.9% in February. Excluding transportation orders, durable goods rose 0.7%. That headline number was the good news, but the bad news was that the orders for core capital goods, namely business orders, declined 0.3% in February, which is the first decline in core capital goods since last October. Economists were expecting core capital goods to rise 0.2% in February, so the deceleration in business orders was a big surprise.
Although the U.S. may officially report negative GDP in the first quarter (when the BEA numbers come out in late April), we’re still growing slowly, while other large nations, such as Britain, Canada, France, Germany and Mexico, are contracting. Furthermore, most of these economies are following China and Japan by experiencing a declining population and shrinking household formation, which limits growth.
New Canadian Prime Minister Mark Carney recently declared an election for April 28th, so it will be interesting to see if Canadian voters want more trade protectionism and are willing to destroy the energy sector in their most productive provinces. In the meantime, Statistics Canada reported that retail sales declined 0.6% and 0.4% in January and February, so Canada also seems to be entering a recession.
When you look around the world, you can see these demographic challenges facing most large countries. Among major economies, only Brazil, India and the U.S. have growing populations and new household formation that result in organic economic growth. Since the U.S. is the most pro-business of the countries with household formation, the U.S. is also an oasis, the main engine leading worldwide economic growth, and the fact that the Trump Administration is soliciting trillions in on-shoring will likely boost GDP more.
Despite the doomsday press, the U.S. is now in the midst of an economic renaissance. The Trump tariffs against the 15 previously most abusive countries are meant to level the playing field and encourage more on-shoring. As a result, I am expecting trillions in on-shoring that should significantly boost GDP growth.
Finally, if President Trump can end the senseless wars in Ukraine and the Middle East, a peace dividend may ensue. The world has become too small to endure long major military conflicts, so economic wars are now more common. China has been winning the recent economic war, with the aid of Mexico, so leveling the playing field with China and Mexico is expected to be President Trump’s biggest challenge.
With the goal of bringing a ceasefire to Ukraine, the Trump Administration has agreed to help Russia increase its exports of grain and fertilizer to global markets, but the sale of Russian grain and fertilizer have been curbed by European sanctions. Furthermore, European countries also banned transactions with most of the largest Russian banks, which made payments for fertilizers and grain more difficult, so the Trump team will naturally ask Europe to lift these sanctions on Russian grain, fertilizer and banks.
Overall, despite the continued tariff distractions, after “Liberation Day,” I expect economic optimism to rise steadily in the upcoming months. Continued strong corporate earnings and lower interest rates are a powerful one-two punch that should propel economic growth dramatically higher. The U.S. attempt to be more fiscally responsible via the DOGE cuts and new tariff revenue has also helped push Treasury yields steadily lower. Clearly, there is a lot for investors to be excited about, so I hope you share my optimism!
Navellier & Associates; own Nvidia Corp (NVDA), and Apple Inc. (AAPL), in managed accounts. Navellier does not own Volkswagen (VWAGY). Louis Navellier and his family own Nvidia Corp (NVDA), via a Navellier managed account, and Nvidia Corp (NVDA), and Apple Inc. (AAPL), in a personal account. They do not own Volkswagen (VWAGY), personally.
All content above represents the opinion of Louis Navellier of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
Trade Talks Escalate as “Liberation Day” Approaches
Income Mail by Bryan Perry
Follow the Money Flows into Stagflation-Proof Assets
Growth Mail by Gary Alexander
Gold is Quietly Dominating the Financial World…Once Again
Global Mail by Ivan Martchev
Beware of the Auto Tariff Quicksand
Sector Spotlight by Jason Bodner
Did Margin Debt Fuel This March Market Madness?
View Full Archive
Read Past Issues Here
Louis Navellier
CHIEF INVESTMENT OFFICER
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 www.adviserinfo.sec.gov or by requesting a copy by emailing info@navellier.com. 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.