by Louis Navellier
May 6, 2025
Last Friday, the Labor Department announced that 177,000-payroll jobs were created in April, much more than the economists’ consensus estimate of 133,000 – and the market soared on this positive news – but these initial job totals are always guesswork, subject to wide revisions in future months. For instance, in last Friday’s report, the February and March payrolls were revised-lower by a cumulative 58,000-jobs!
Also, the federal workforce declined by only 9,000-jobs in April, despite all the announced DOGE cuts, so we are not really cutting federal spending by significant amounts yet. The unemployment rate also remains unchanged at 4.2%. Average hourly earnings rose only 0.2% (6-cents) to $36.06 per-hour in April and have risen 3.8% in the past year. The lack of any big wage inflation should reduce any inflation fears.
The other economic news released last week was mostly negative, including the other major employment survey. ADP reported on Wednesday that only 62,000 private-payroll jobs were created in April. This was below the economists’ expectation of 120,000-jobs and the smallest monthly increase since July 2024.
Earlier, the Commerce Department reported on Tuesday that the trade deficit soared 9.6% in March to $162-billion, so there have now been three consecutive months of dumping of goods in America to try to beat tariffs. Wholesale inventories have risen 0.5% in the past two-months, so as inventories build, their prices will most likely be discounted to move goods, which is deflationary. The soaring trade deficit, plus large gold shipments to America, have now pushed the first-quarter GDP estimate into negative territory.
Reflecting these one-time-only trade swings, the Commerce Department announced on Wednesday that its preliminary estimate for first-quarter GDP was an annual contraction of -0.3%, since the soaring trade deficit subtracted a whopping 4.8% from GDP calculations. Imports surged at a 41.3% annual pace in the quarter. A surge in inventories added 2.3% to the first-quarter GDP calculations, but consumer spending rose at a healthy 1.8% annual pace in the quarter, which was stronger than economists had fore-casted.
The Conference Board announced on Tuesday that its consumer confidence index for April plunged to 86, down almost 8-points from 93.9 in March. The “present situations” component slipped to 133.5 in April, down from 134.4 in March, while the expectations component plunged 12.5-points to 54.4 in April, from 66.9 in March. It is now at its lowest level since October 2011. This is the fifth consecutive decline in consumer confidence and frankly bodes poorly for the economy, due mostly to the sagging expectations component, so if the Fed is looking for reasons to cut key interest rates, this is one of the main reasons.
The Institute of Supply Management (ISM) on Thursday reported that its manufacturing index in April declined to 48.7 in April, down from 49 in March in the second straight monthly decline in that index after being above 50 (signaling an expansion) in January and February. The supplier delivery component slowed to 55.2 in April, down from 56.9 in March. The new exports component plunged to 43.1 in April, down from 49.6 in March, signaling that the chaos associated with tariffs may be impacting U.S. exports.
The ISM manufacturing index is at its lowest level since November, so I say the Fed must cut key interest rates to stimulate manufacturing orders, or else risk more criticism on Truth Social for being “too late.”
The U.S. Tariff Wars with China are Melting Away – But Not Fast Enough
After meeting with executives from many of our leading retailers, the President now knows he must try to avoid seeing “empty shelves” in stores, since that would be a powerful image his opposition could use against him, so do not be surprised if the President calls an audible and adjusts tariffs on Chinese goods.
Bloomberg reported that China has started to exempt some U.S. goods from tariffs, amounting to about $40-billion in imports, in what looks like an effort to soften the blow of the trade war on China. The list of exempted U.S. products covers 131 items, like pharmaceuticals and industrial chemicals, so the good news is that there is apparently a “thaw” beginning in the trade dispute between China and the U.S.
China’s National Bureau of Statistics on Wednesday announced that its purchasing managers index (PMI) declined to 49 in April, down from 50.5 in March. This is the worst monthly PMI contraction in China since December 2023, and worse than economists expected. Clearly the 145% tariffs on Chinese products are adversely impacting China’s economy. The National Bureau of Statistics said there are “no winners in trade wars.” Also, the Chinese yuan remains weak, and devaluation rumors persist. This game of chicken that China and the U.S. are having will have no winners, so I expect China’s PMI to remain under 50.
President Trump is now promising sweeping income tax cuts for people making less than $200,000 per-year. On Truth Social, he said, “When Tariffs cut in, many people’s income taxes will be substantially reduced, maybe even completely eliminated. Focus will be on people making less than $200,000 a year.”
The possibility of trade wars and continuing tariff uncertainties is also impacting earnings announcement season. Many companies are suspending guidance due to economic uncertainty. This lack of guidance is not a positive development, as it causes a wide dispersion of analyst estimates – much wider than normal.
I should add that when President Trump was in Michigan last Tuesday to celebrate his first 100-days, he lowered the reciprocal tariffs on non-U.S. content to 15% and delayed the 25% tariff hit for a year. Essentially, President Trump gave domestic auto manufacturers time to onshore operations in America.
One other interesting development is that VW Group (which includes Audi, Bentley, Lamborghini and Porsche) appears to be waiting for the EU to negotiate a more favorable deal before passing the 25% tariffs on its foreign-made vehicles, which was scheduled to begin last Saturday, May 3rd. VW Group is now Europe’s EV sales leader after its first quarter EV sales surged 113% in Europe and 51% in the U.S.
Overall, VW’s first quarter sales rose 1.4% to 2.13-million. However, VW’s earnings declined by 40.6% because EV sales are less profitable than vehicles with internal combustion engines (ICEs). Since the European Union (EU) is mandating that all vehicles be electric by 2035, VW should seriously consider moving its ICE operations to America to boost its profitability, since the U.S. does not have this mandate.
Despite this progress in trade news, negative economic news about the U.S. continues to emanate from Britain, especially about tariff uncertainties. The Financial Times interviewed former Treasury Secretary Janet Yellen, who was eager to talk about how the tariffs on major trading partners will have “tremendous adverse consequences” for American companies and consumers. Specifically, Yellen said that recession risks have “gone way up” after the Trump Administration’s proposed tariffs. Yellen also added that targeting Chinese goods could “hobble” American industries by curtailing the supply of critical minerals.
No offense, but it may help to remind Europe that Janet Yellen is no longer our Treasury Secretary.
In other earnings news, Super Micro Computer warned that a big March shortfall based on “delayed customer platform decisions” caused it to lower its quarterly revenue guidance to $4.5-billion – $4.6-billion, below the $5 to $6-billion it had previously forecast. Furthermore, the company now expects 29-cents to 31-cents in operating earnings per share, below its previous guidance of 42 to 62-cents. Ouch.
There is no evidence that Super Micro Computer’s lower guidance is impacting Nvidia, since Nvidia has sold all the Blackwell chips that it can manufacture. Interestingly, Super Micro Computer said it saw “some order push-outs in the quarter, as customers appear to be opting for next-generation products over current-gen ones.” This comment just means that the demand for Blackwell chips remains strong.
Energy-Related News Out of Canada and Spain
Canadian Prime Minister Mark Carney’s Liberal Party won 43.5% of the vote and 155-seats, while the Conservate Party received 41.4% of the vote and 144-seats in Parliament. Pierre Poilievre said Canadians voted for a “razor-thin minority government, a virtual tie.” Alberta and Saskatchewan overwhelmingly voted for the Conservative Party, since they will suffer most from PM Carney’s Net Zero goal by 2050.
Canada’s provinces have a lot of autonomy, so it will be interesting to see how they work with Ottawa. Alberta must sell most of its oil to the U.S. due to a lack of Canadian pipelines. Saskatchewan can ship its agricultural goods by rail, but Net Zero’s mandate to eliminate chemical fertilizers remains contentious.
The massive blackout in Spain, which also enveloped Portugal and parts of France, remains a mystery. Initially, the blackout was blamed on abnormally hot weather, which is scary, since it gets much hotter than this in Spain, and electricity rationing is common during heatwaves. Spain has upgraded its electricity grid with predominately green energy, so the fragility of the grid frankly remains very scary.
The Wall Street Journal had an editorial on Wednesday that blamed Spain’s over-reliance on green energy for the grid’s collapse and said the “grid was also running with a low share of turbine-based generation—around 30%. Low inertia meant playing with fire (or, more accurately, with the sun, given that Spain’s policymakers minimized thermal generation).” Just days before, Spain’s government announced that its grid had for the first time run entirely on renewable power, with new records set almost daily for solar.
Navellier & Associates; own Nvidia Corp (NVDA), and Super Micro Computer, Inc. (SMCI), in managed accounts. We do not own Volkswagen (VWAGY), or Berkshire Hathaway Inc. in managed accounts. Louis Navellier and his family own Nvidia Corp (NVDA), and Super Micro Computer, Inc. (SMCI), via a Navellier managed account, and Nvidia Corp (NVDA), in a personal account. He does not personally own Volkswagen (VWAGY), or Berkshire Hathaway Inc.
All content above represents the opinion of Louis Navellier of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
Friday’s Jobs Report Doesn’t Give the Fed a “Pass” on Cutting Rates
Income Mail by Bryan Perry
Hard Truths from Warren Buffett on the Federal Debt Crisis
Growth Mail by Gary Alexander
First-Year Flops Are Normal in Market History
Global Mail by Ivan Martchev
There is a Path to Fresh All-Time Highs for Stocks
Sector Spotlight by Jason Bodner
My Stock Market “Baptism of Fire” Was in 1998 (When Was Yours?)
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.