by Louis Navellier
June 16, 2026
After Iran shot down a U.S. helicopter last Tuesday, President Trump announced on Thursday the U.S. plans to hit Iran “VERY HARD,” with a goal of “total control” over Iran’s oil and gas markets. On Truth Social, Trump said the U.S. would take Kharg Island, Iran’s main oil export hub “in the not-too-distant future.” Trump also said the U.S. would “assume total control of their Oil and Gas Markets, much like we have with Venezuela, which is working out brilliantly for both Venezuela and the U.S.” Since 90% of Iran’s crude oil exports go through Kharg Island, this would represent a serious threat to Iran’s economy.
Very soon after that strong threat, however, President Trump called off any strikes on Iran due to an “imminent” peace deal. Specifically, Trump said, “The documents are in pretty final shape,” then said the Strait of Hormuz “will officially open as soon as we sign, which could be soon, very soon.”
On those words, crude oil prices meandered down from $90 to $80 and are now near a 3-month low.
Most central bankers know they cannot control food and energy prices. Nevertheless, the European Central Bank (ECB) raised its key interest rate by 0.25% to 2.25% last week, on Thursday. In doing so, the ECB said, “The outlook remains uncertain, with upside risks for inflation and downside risks for economic growth.” They also said their interest rate increase was “well positioned to navigate the uncertainty caused by the war.” Well, I cannot fix stupid, and the ECB is acting very stupidly.
I cannot sugar-coat the ECB’s level of ignorance in this matter – as it defies all economic laws: Oil prices cannot be fixed by interest rate increases. Most European economies suffer from a demographic decline, causing consumption to fall, yet the ECB is trying to further impede consumption with a key interest rate hike, which will do nothing to lower food and energy prices. Usually, currencies strengthen on an interest rate increase, but the euro declined as the EU suffers from tragic mismanagement and bureaucracy.
The Overall Market is Broadening Out, Not Contracting
The recent correction in AI-related stocks is merely profit-taking and a healthy rotation into other stocks. This means money is not leaving the stock market, but it is merely broadening out to cover more sectors.
Based on the latest quarterly back testing of our Stock Grader, the top 20% of stocks are performing the best (up from the top 10% in the previous quarterly back test at the end of February). Breadth and power also increased in the 8-factor Fundamental model to the top 65% of stocks performing the best (up from the top 30% in the previous quarterly back-test at the end of February). So, essentially, the breadth and power of the overall stock market is expanding, which is a good sign of robust economic growth.
Bank of America strategist Savita Subramanian said the gap in the tech sector between the best and worst performing quintiles’ median stock is a “whopping” 120 percentage points, the highest gap since February 2000, the peak performance month of the internet boom. Subramanian said this rich spread “rivals the dotcom bubble” when the gap reached 130 points just before the market peak in March 2000.
My problem with Subramanian’s conclusion is she is ignoring the underlying fundamentals of this market vs. the 2000 peak. Tech earnings were mostly negative back then, while the S&P 500’s earnings rose 29.3% in the first quarter of 2026. Furthermore, the S&P 500’s earnings are forecasted to rise 21.5% this year, and that could be revised higher due to accelerating GDP growth and positive analyst revisions.
The Atlanta Fed currently estimates 3.3% GDP growth for the second-quarter, but I expect upward revisions in the wake of positive ISM manufacturing and service sector surveys as well as robust retail sales. Costco announced same store sales up 8% in May, while its online sales surged 20%, so consumers are still spending up a storm, despite higher prices at the pump, which are now moderating.
Before closing, I’d like to say a word about the SpaceX IPO, which began trading on Friday and gapped up, since it was grossly over-subscribed ($350-billion chasing $75-billion in stock offered). Even though SpaceX is off to a good start, the typical IPO stalls within a few months, as insider stock lockups expire and insider selling picks up. For example, Rocket Lab (RKLB) has been under selling pressure recently on reports of significant insider selling. There is also a theory that some recent AI selling pressure was due to investors raising money to buy SpaceX, but there is still a lot of cash on the sidelines, waiting.
Frankly, I think the Anthropic IPO will be even more successful than SpaceX, since the excitement over that company’s Claude AI promises some explosive growth. In the end, the IPO boom this year will reach an all-time record, so underwriters like Goldman Sachs will prosper from underwriting revenue. An IPO boom is great for investor confidence and will help boost the entire stock market. There is no doubt we remain in the midst of a FOMO (Fear of Missing Out) market, so the investor stampede should persist!
Navellier & Associates; own Costco Wholesale Corporation (COST) in some managed accounts. We do not own Bank of America (BAC), Space Exploration Technology Corp (SPCX) or Goldman Sachs (GS) in managed accounts. Louis Navellier and his family own Costco Wholesale Corporation (COST) personally. They do not own Bank of America (BAC), Space Exploration Technology Corp (SPCX) or Goldman Sachs (GS) personally.
All content above represents the opinion of Louis Navellier of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
The ECB Raises Rates – to Bring Inflation Down?
Income Mail by Bryan Perry
The Countdown to “Q-Day” Begins
Growth Mail by Gary Alexander
Freedom and Capitalism Can Still Boost the Wealth of Nations
Global Mail by Ivan Martchev
This Market Looks Like a “Best-Case Scenario”
Sector Spotlight by Jason Bodner
Elon Musk’s Wealth Soars “To Infinity and Beyond”
View Full Archive
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Louis Navellier
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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.
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