by Jason Bodner

April 16, 2024

Last week, I tackled the global flood that set Noah and his animals adrift, but it turns out that 70 other cultures chronicled the same story, so maybe the myth is really just a fuzzy memory.

This week, I offer the Peri Reis Map, compiled in 1513 from earlier “source maps.” Note that the coastline and mountains of Antarctica are clearly charted here. However, there is one big problem…


Antarctica wasn’t discovered until 1820. And other than Peri Reis, earlier maps never showed Antarctica:

Map 2

The Peri Ries Map also shows Antarctica connected to Brazil. Obviously today an ocean separates them.

Let’s turn to the CIA for “the truth.” A once-classified book “The Adam and Eve Story,” written by a retired CIA agent, Chan Thomas, in 1966, supposedly details how a global cataclysmic flood is coming.

Magnetic fields hold the answer. The earth’s poles flip. It can be spontaneous, and poles are shifting even today. In the map below, you can see the poles shifted steadily towards Greenland over the last 100 years:


This is more than a shift. I’m talking about a flip. The Earth’s magnetic field occasionally reverses poles. It happens ranging from every 10,000 years up to every 50+ million years. The last reversal was about 780,000 years ago. Reversals are random and unpredictable and can take hundreds to thousands of years.

Recent research shows that at least one reversal could have taken place in a single year. Researchers believe the poles flipped 183 times in the last 83 million years, and several hundred times in the past 160 million years, and if the poles suddenly flipped in just one year, could it have caused a global flood?

Who knows? But again – it’s fun to indulge in such “what if” theories.

And that’s the type of stuff that drives news cycles – and volatility in the markets. Volatility is creeping up. On Friday April 12th, the VIX hit 19.20 – a level not seen since October of 2023.  It closed at 17.51:


Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Is a market cataclysm near, and why is this volatility happening now?

Last week saw amped-up uncertainty because bad news struck on Wednesday. The CPI report came out hotter than expected for the third month in a row. The annual rate came out as 3.5%, up from 3.2%. Gas and shelter prices impacted the index the most. The expectation of a June rate cut is now harder to justify.

Look, we know inflation will moderate and cuts are coming…. when is another matter. More importantly, earnings season is here again. Is Apocalypse coming? Not likely. Here are some statistics indicating “no.”

  1. According to Fact-Set, for S&P 500 companies reporting earnings, the 10-year average has 74% of companies beating earnings estimates, and 64% beating revenue estimates. That means:
  2. Either analysts are just plain bad at their job of getting earnings right about 75% of the time, or they want to underestimate. Either way, I say: “Let the trend continue.”
  3. Upcoming earnings for Q1 will likely fit the same pattern. My guess, based on recent history, is that 79% of companies will beat earnings estimates and 67% will beat sales estimates.

Earnings Table

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

If my prediction comes true – or even close – it means the economy is working well: Companies are making their sales and profit targets and are reporting rising earnings. Isn’t that what’s most important?

Sure, inflation is higher than we want, but it is still way down from its peak of 9.2%. And it is also below the 64-year average CPI of 3.77%.

Also, the effective Fed funds rate of 5.33% is more than 10% above the 64-year average of 4.8%. This delivers a positive “real” return of nearly 2%, between rates (5.33%) and inflation (3.40%), or +1.93%.

In other words, rates are 56% higher than inflation. For the last 64 years, the average spread is 1.03%, so we are nearly double that. For context, the average spread since 2000 is -0.75%. Since 2001, this phenomenon of higher rates than inflation rarely lasts long, as you can see in the chart below.


Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Last week, the CPI spooked markets, putting pressure on the Big Money Index (BMI), driving it below 70 for the first time since December 4th, 2023.


Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Even with that, stock selling did not accelerate significantly, as we can see on the left, below:


Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

But on the right, ETF selling did spike, specifically after the CPI report. In fact, on Wednesday, 49 ETFs saw unusually large selling. Interestingly, nearly all of them were bond, Treasury or income-related ETFs.

Looking at stock sectors, we see no real selling to get worried about…yet. Energy and Materials continue to see inflows. All other sectors remain technically strong on a chart, but buying has dwindled visibly.



Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Financials just kicked off earnings season, last Friday. Blackrock, one of the biggest, started off things positively, reporting EPS of $9.81 vs. expectations of $9.34, and revenue of $4.73 billion (vs. $4.64b).

While that certainly started the season right, the CPI kicking the Fed’s rate cuts down the road is causing concerns that the banks will face hurdles with higher rates for a longer time. We saw this as JP Morgan, Wells Fargo, and Citigroup all saw net interest income drop during the fourth quarter.

This is suddenly sparking recession chatter again. Wall Street always needs something to worry about. But while the markets were spooked somewhat last week, the internals still look good. I still anticipate strong sales and earnings growth with the rosy backdrop of rate cuts on the horizon… eventually.

As more earnings come online, let’s see where they fall in terms of history.

The earth’s poles may flip and take us all out. Or maybe not. I’ll assume the latter! Charles Schultz said it best: “Don’t worry about the world coming to an end today. It is already tomorrow in Australia.”

Navellier & Associates does not hold Citigroup (C), Wells Fargo & Co (WFC), JPMorgan Chase & CO (JPM), or Blackrock in Managed accounts. Jason Bodner does not own Citigroup (C), Wells Fargo & Co (WFC), JPMorgan Chase & CO (JPM), or Blackrock personally.

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

Please see important disclosures below.

Also In This Issue

A Look Ahead by Louis Navellier
The Global Implications of Rising Energy Prices

Income Mail by Bryan Perry
Factoring In the New War Realities

Growth Mail by Gary Alexander
How to Create a Roaring (2nd Half of the) Twenties

Global Mail by Ivan Martchev
Possible Rising Recriminations Face the Stock Market

Sector Spotlight by Jason Bodner
Is a Market Cataclysm Coming Soon?

View Full Archive
Read Past Issues Here

About The Author

Jason Bodner

Jason Bodner writes Sector Spotlight in the weekly Marketmail publication and has authored several white papers for the company. He is also Co-Founder of Macro Analytics for Professionals which produces proprietary equity accumulation/distribution research for its clients. Previously, Mr. Bodner served as Director of European Equity Derivatives for Cantor Fitzgerald Europe in London, then moved to the role of Head of Equity Derivatives North America for the same company in New York. He also served as S.V.P. Equity Derivatives for Jefferies, LLC. He received a B.S. in business administration in 1996, with honors, from Skidmore College as a member of the Periclean Honors Society. All content of “Sector Spotlight” represents the opinion of Jason Bodner

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