by Louis Navellier

April 5, 2022

Modern Monetary Theory (MMT) is essentially “unlimited money printing.” It was pioneered by the ECB and adopted by the Fed during the pandemic as a way to avert a recession. There is still a lot of money in circulation that the Fed created from MMT, and it has to go somewhere. Much of that money will start hiding in 2-year to 5-year Treasuries securities while the yield curve remains inverted, but also, fortunately, much will go into stocks that serve as inflation hedges, such as shipping stocks.

The Atlanta Fed is currently estimating 1.3% annual GDP growth for the first quarter, up from a previous estimate of 0.9%. If the Fed can avert a recession and engineer a soft landing, I will give them full credit for their actions; but right now, the tail (i.e., intermediate Treasury yields) is wagging the dog (the Fed), so we must anticipate a series of interest rate hikes until the Fed is more in-line with market rates.

It is very hard for the Fed to engineer a “soft” economic landing as intermediate Treasury yields soar. In fact, I cannot remember the last time the Fed successfully engineered a “soft economic landing.” That essentially means that businesses that do not have big order backlogs are likely to teeter into their own recession in the upcoming months. Eventually, a weaker U.S. and global economy will impact crude oil prices and other commodities, which in turn, will “prick” the current inflation bubble.

The Fed’s favorite inflation indicator –the Personal Consumption Expenditure (PCE) index – rose to a 6.4% annual pace in February. The core PCE, which excludes food and energy, is now running at a 5.4% annual pace. The Fed still has a goal of getting the PCE down to 2%, but that won’t happen this year.

As an example of how higher interest rates impact economic growth, the National Association of Realtors recently announced that pending home sales declined 4.1% in February (vs. January), which marks the fourth straight weekly decline in pending home sales as mortgage rates have steadily risen. In the past 12 months, pending home sales have declined 5.4%, so the housing boom is clearly fizzling.

Meanwhile, the S&P CoreLogic Case-Shiller National Home Price Index reported that median home prices rose 19.1% in the 12 months (through January) as the inventory of existing homes declined to an all-time low of a 1.6-month supply. In the 20 major metropolitan areas surveyed, median home prices rose in 16 areas. Phoenix had the strongest home growth, appreciating 32.6% in the past 12 months. The Tampa metropolitan area had the second strongest appreciation at 30.8% in the past 12 months. As interest rates rise, I expect that the annual pace of home appreciation will moderate.

The supply chain glitches are expected to get worse, since Chinese authorities imposed a two-stage “lockdown” on 26 million people in Shanghai in response to Covid-19. As a result, Tesla had to suspend vehicle production for five days. Disney in Shanghai also closed. The largest container port in the world is in Shanghai, so I suspect that container ship prices will remain high. The Shanghai Covid lockdown, plus renewed hopes for peace talks between Russia and Ukraine, caused a bit of a “commodity crunch” last week. In my opinion, energy, natural gas, LNG, fertilizer, and shipping stocks all remain great buys on any pullback, since they are all expected to post strong second-quarter results in the upcoming weeks.

Last Week’s Economic Indicators Still Look Reasonably Healthy

The biggest surprise last week was that the Conference Board reported that its consumer confidence index rose to 107.2 in March, up from 105.7 in February. The “present situations” component rose to 153 in March, up from 143 in February. However, the “expectations” component declined to 76.6, down from 80.8 in February. Overall, consumers are in much better shape than I (and others) had anticipated, so it is still possible that the U.S. economy could skirt a recession if consumer spending remains strong.

On the jobs front, ADP reported on Wednesday that 455,000 private payroll jobs were created in March. Leisure & Hospitality led the way with 161,000 new jobs, and Manufacturing created 54,000 new jobs.

On Friday, the Labor Department reported a similar number of 431,000 payroll jobs created in March, but that was below economists’ consensus expectation of 490,000. As I had anticipated last month, previous payroll reports were revised higher: January, up 23,000 (from 481,000 to 504,000) and February up 72,000 (from 678,000 to 750,000), respectively. The unemployment rate declined to 3.6% in March, down from 3.8% in February. Average hourly earnings rose 0.4% by 13 cents to $31.73 per hour in February and have increased 5.6% in the past 12 months. Overall, the job market remains very healthy.

On Thursday, the Labor Department announced that weekly unemployment claims rose to 202,000 in the latest week compared to a revised 188,000 in the latest week. Continuing unemployment claims declined to 1.307 million compared to a revised 1.342 million in the latest week. Although weekly unemployment claims were higher than the economists’ consensus expectation of 196,000, continuing unemployment claims were significantly better than the economists’ consensus expectation of 1.34 million. Overall, continuing unemployment claims are now at the lowest level in over 52 years (since December 1969).

Crude oil was on a roller coaster last week. The Biden Administration announced that it is releasing more crude oil from the Strategic Petroleum Reserve – up to 1 million barrels per day. Also notable is that both Austria and Germany are preparing for gasoline rationing as their supplies could fall short. An even bigger shortage of rare earth metals to build lithium-ion batteries continues to derail the EV revolution. The U.S. is not a major nickel producer and does not have the ability to mine cobalt, which comes mostly from the Congo, where children crawl into dangerous hand-tunneled 100-foot shafts to extract cobalt, so it looks to me like the EV revolution may stall unless the world can find sufficient nickel and cobalt.

Navellier & Associates owns Disney, in managed accounts and a few accounts owns Tesla per client request. Louis Navellier does not own Disney, or Tesla personally.

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

Please see important disclosures below.

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.