Confusion Reigns in DC

Confusion Reigns in DC, While Markets, Earnings & GDP Rise

by Louis Navellier

October 31, 2017

*All content in this Introduction to Marketmail represents the opinion of Louis Navellier of Navellier & Associates, Inc.*

Washington DC Capitol Building Image

I was in Washington D.C. last week and all I can tell you is that our nation’s capital is “stressed out” and everyone I talked with has virtually no idea of what the future holds. However, outside the Beltway, the mood is much more positive as the U.S. economic news last week was simply stunning. Due to this positive economic news, the 10-year Treasury bond yield rose last week to 2.41%, which makes the Fed much more likely to raise key interest rates in December.  Also, the market will likely approve if Jerome Powell is appointed Fed Chairman to replace Janet Yellen. The official announcement is expected soon.

Since some of the giant “FANG” stocks announced better-than-expected third-quarter results last week, especially on Thursday, tech stocks surged on Friday. After Apple started accepting orders for its iPhone X on Friday, the supply sold out in minutes, so many Apple suppliers and the entire tech sector firmed up. (Please note Louis Navellier does currently hold a position in Apple. Navellier & Associates does currently own a position for client portfolios).

In This Issue

In Income Mail, Bryan Perry writes more about the shockingly strong tech “melt-up” last Friday and what it means for the future. In Growth Mail, Gary Alexander brings us his annual update on stocks and gold from the sometimes-spooky New Orleans investment conference. In Global Mail Ivan Martchev calls for a U.S. dollar recovery and gold decline in 2018, if not this year. In Sector Spotlight, Jason Bodner says six sectors fell last week and five rose, so is this market cup half-full or half-empty?  In the end, I’ll cover the dismal situation in Venezuela vs. the improving economic picture in the U.S. and the rest of the world.

Income Mail:
An Epiphany Moment for Wall Street
by Bryan Perry
Wake Up Call in Tech Sector Sparks Buying Panic

Growth Mail:
Halloween Spooks New Orleans…Again
by Gary Alexander
Good News – November Dawns Tomorrow Morning

Global Mail:
Why I Expect a U.S. Dollar Comeback
by Ivan Martchev
U.S. Dollar’s Effect on Gold

Sector Spotlight:
Is the Glass Half-Full, Half-Empty…or Something Else?
by Jason Bodner
Six of 11 S&P Sectors Declined Last Week

A Look Ahead:
Venezuela Continues to Sink into Chaos
by Louis Navellier
The U.S. (and Most Other Capitalist Economies) are Growing by 3% or More

Income Mail:

*All content of "Income Mail" represents the opinion of Bryan Perry*

An Epiphany Moment for Wall Street

by Bryan Perry

“An epiphany (from the Greek ἐπιφάνεια, epiphaneia, for “manifestation, striking appearance”) is an experience of sudden and striking realization… but it can apply in any situation in which an enlightening realization allows a problem or situation to be understood from a new and deeper perspective.”

 – Wikipedia article, “Epiphany”

Last week the stock market experienced what I call an “epiphany moment” – a move that now has every professional market participant recalculating their numbers for fear of undershooting just how far this rally can extend itself. It just seems that the bullish catalysts keep coming more frequently and in greater magnitude. It’s a beautiful thing – if one is long the market – and hugely frustrating if underinvested.

It’s my view that good stocks are vaulting higher because of the sudden realization that analysts’ estimates for organic top- and bottom-line growth are entirely too low, forcing a re-thinking of earnings for the S&P 500, given the very bullish third-quarter results that have flowed in so far.

The epiphany must also take into account a full decade of financial engineering by the Fed and other central banks, the shoring up of corporate balance sheets thanks to super-low interest rates, a tidal wave of stock buy-backs, hope for tax reform, reflation of the global economy, and the next great technology wave.

The rise of many transformational technologies, from the Internet of Things to Artificial Intelligence, is driving rapid change and massive business investment that is a boon to the U.S. technology community. The really good news is that the glide path for the scaling of this technology is about a decade or longer.

Seeing legacy big-cap tech companies post solid top-line growth from the secular boom in cloud computing alone is simply spectacular. What jumped off the page from all the earnings-related headlines was that Microsoft boasted 90% revenue growth in their Azure cloud division that is second in market share only to Amazon’s AWS. (I have no position in Microsoft or Amazon.) (Please note: Bryan Perry does not currently hold a position in Amazon or Microsoft. Navellier & Associates does currently own a position for client portfolios).

The vastness of commercial and consumer application from cloud computing, big data, mobile ecommerce, digital payments, 5G wireless, artificial intelligence, augmented reality, robotic vision, machine learning, autonomous transportation, and a dozen other transformational technologies are all in the very early innings of practical and economic development. What is even more dramatic is the convergence of all these next-generation technologies coming together now and the prospects of performance returns upon implementation on a large scale.

The Gartner Worldwide IT Spending Forecast is the leading indicator of major technology trends across the hardware, software, IT services, and telecom markets. Worldwide IT spending is projected to total $3.5 trillion in 2017, a 2.4% increase from 2016 with another 3.5% rise coming in 2018 (Source: Gartner.com, July 13, 2017). As the third quarter unfolds further, it would be no surprise if these estimates were adjusted higher, given the uptick in the global economy. It’s incredibly impressive and is providing a period of terrific wealth creation without the hollow promises of the dot com era.

Worldwide Information Technology Spending Forecast Table

These advanced technologies will provide untold amounts of cost-saving efficiencies and unknown levels of productivity gains that have yet to be priced into stocks and are thus part of the “epiphany” phase the market is entering. You could see it last week when companies with market caps in excess of $50 billion to $100 billion were gapping higher by big percentage gains – typically reserved for small cap stocks.

The most glaring example was Adobe Systems (ADBE), which after posting Q3 results on October 19 that beat handily on the top and bottom line, saw its shares make a shocking move higher of 18 points, or 11.8%, as the company’s business model was essentially repriced to take into full account the cloud-based subscription model adopted no more than two years ago. (I have no position in Adobe.)

Wake Up Call in Tech Sector Sparks Buying Panic

Last Friday’s 144-point gain for the NASDAQ underscored this sudden and stunning wake-up call for investors, with fund managers racing to increase big-cap tech exposure by the closing bell. This was a telltale sign of what was about to happen to many of the leading blue-chip tech stocks that saw their company business models take on a new higher premium because of what the future holds.

I’ve been in this industry for 33 years and have never seen that kind of buying frenzy in so many big-name tech stocks. The kind of money flow required to move the 10-15 top tech names by multiple points (each) is massive and historic. It truly took my breath away to see Microsoft up $7 on volume approaching 70 million shares and the broad impact it was having on sentiment. When the dust settled after the closing bell, NASDAQ had finished the day at an historic 6,701 with 2.41 billion shares traded.

The reaction by seasoned market veterans around the globe was nothing short of “Oh my God, what is happening here?” I know because I’m one of them, and I called a couple of my buddies in the business and found that they were either just as amazed or speechless. It was a widespread epiphany moment for sure and sends a strong message that the U.S. economy is getting serious growth traction that can fuel a higher stock market ahead, with or without tax reform, financial deregulation, or infrastructure spending.

The other major byproduct of this new golden era for tech investing is that dividend growth for the big blue-chip companies should be music to income investors seeking rising income that coincides with rising interest rates, inflation, and keeps pace with the yield on the 10-year Treasury. Being invested in a solid set of big-cap technology dividend growth stocks is looking like a home run winning streak in the making that will deliver on both yield and capital appreciation for many quarters to come.

Growth Mail:

*All content of "Growth Mail" represents the opinion of Gary Alexander*

Halloween Spooks New Orleans…Again

by Gary Alexander

For the last 34 years, I have been panel moderator or MC (and lately both) at the New Orleans Investment Conference, which usually falls in the last week of October. Back in 2015, it ran October 28-31; in 2016 it fell on October 26-29; and this year October 25-28. It is an excellent gold-oriented conference with some political overtones, but in my view too many speakers seem permanently bearish on the stock market.

While most New Orleans speakers covered the resource market, those who spoke about the stock market were super-bearish once again. Robert Prechter, CEO of Elliott Wave International, turned bearish last week.  In his talk, he cited the convergence of several dozen technical charts pointing to a market top.

Also, in the first afternoon session in which I served as MC, we heard Doug Casey, founder and chairman of Casey Research, offering his annual “Update on the Collapse of Western Civilization.”  He was followed by Byron King talking about “Sudden Death for the Dollar.”  Peter Schiff, CEO of Euro Pacific Capital, had a bearish workshop that night: “Why the Next Recession May be Fatal to the Market.”

To his credit, Dr. Mark Skousen remained one of the lonely bulls on the overall stock market. I attended his workshop Friday night, but only 20 were present vs. 40 (each) in competing workshops offered by Peter Schiff and Byron King.  From that evidence, it looks like the audience was 80% bears, 20% bulls.

As if there weren’t enough bears around, the NFL Chicago Bears were in town to play the New Orleans Saints. Our hotel was taken over by football Bears and stock market bears.  Ironically, Chicago also has a team called the Bulls, who won six NBA titles, 1991 to 1998 – all of them bull market years. By comparison, the football Bears were champs in the worst bear market in history: 1932-33 and 1940. Lately, the Bulls have a better recent track record in sports and in the markets than the beleaguered Bears.

In addition, Halloween costumes dominated the city the whole week I was there.  At the jazz club, Snug Harbor, the host told a packed crowd on Saturday night, “Welcome to Day #30 of our 45-Day Halloween Festival.”  He was only half-kidding. The city goes crazy with its Voodoo Festival at this time of year.  In middle America, Halloween is for kids.  Here, in the City Care Forgot, Halloween is for carefree “adults.”

Good News – November Dawns Tomorrow Morning

There’s something in human nature that finds spooks, scares, and bear markets far more intriguing than a boring bull market, but All Saints’ Day follows Halloween, as surely as November 1 follows October 31.

Last year, Jeffrey Hirsch spoke in New Orleans, reminding investors that this is the best time of year to invest in stocks. Since 1950, he said, November is the best month for the Russell 1000, second-best for the S&P 500, and third best for the DJIA.  Part of the reason is that “fourth quarter inflows from institutions drive November to lead the best consecutive three-month span, November to January.”

In the last 20 years, November is second-best (to April), with the summer months being notably negative:

Markets' Best Month Bar Chart

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

Here are the last seven years of the current bull market, in which the cold months beat the warm months:

Warm Months versus Cold Months in Current Bull Market Table

This trend does NOT mean that I recommend anyone “Sell in May and Go Away.”  After all, that trend reversed in 2016, with May-to-October edging out the previous six months. What these data mean, to me, is that early November provides investors with an especially good time to accumulate good stocks.

Gold also tends to undergo a surge from November to February, coinciding with holiday gift-giving – including the Indian wedding season, Christmas, the Chinese New Year, and Valentine’s Day.  In New Orleans and in his excellent book, “The Socionomic Theory of Finance,” Bob Prechter agreed with my long-held contention that gold is primarily a “prosperity hedge” (more so than a crisis hedge or inflation hedge).  Crises come and go, and inflation has been sporadic in recent decades, but gold tends to rise based on increasing worldwide wealth.  When hundreds of millions of formerly-poor citizens in China and India and around the world grow richer faster, they can afford to buy more gold as an asset class.

Where some of the chronic super-bears go wrong, in my view, is that they assume investments must move in opposite directions – on the theory that “if stocks collapse, investors will rush into gold.”  But it didn’t happen that way in 1987.  Stocks crashed on “Black Monday,” October 19, 1987, but gold stocks fell sharply the next day, “Bloody Tuesday” on the Toronto Stock Exchange, since investors had to sell stocks that had held up well (gold stocks) in order to meet margin calls or raise cash.  Gold peaked a month later.

For decades, I have owned a small allotment (usually 5%) in gold and silver, and I forget about it.  It is my alternative to cash – not stocks.  Gold is my “savings of last resort,” but it is not my religion.  If someone is wedded to gold by owning 50% of a portfolio in the yellow metal, and very little in common stocks, I can see why they would root for a stock market crash and dream of $10,000 gold, but it won’t likely happen. I see gold rising moderately, helping quality gold mining stocks to leverage those gains.

And now, I have an extra source of income from my bets with Ivan Martchev (see below) that gold will stay above $1,000. If I make that bet each year, I can fly first class to New Orleans in 2018. Thanks, Ivan. (See Ivan’s article: “I’m betting a colleague that gold will fall to less than $1,000 an ounce this year”)

Global Mail:

*All content of "Global Mail" represents the opinion of Ivan Martchev*

Why I Expect a U.S. Dollar Comeback

by Ivan Martchev

Last week saw the dollar rally pick up steam as interest rate differentials are increasing in favor of the greenback. The largest component in the US Dollar Index – the euro at 57.6% – is barely holding on at $1.16. Earlier in September we made it all the way above $1.20. It is my opinion that this dollar sell-off from January to September 2017 (and the inverse euro rally) will completely unwind in 2018. I am looking for the Dollar Index to take out the multi-year high of 103.83 seen on the first trading day this year and make new multi-year highs, which is a significant move since we closed last week a hair under 95. That means the euro is likely headed to parity to the dollar, a significant decline from a recent $1.20.

Euro Dollar Exchange Rate versus United States Dollar Index Chart

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

Why was the dollar so weak (and the euro so strong) in the first nine months of 2017?

In the U.S., quantitative tightening did not start until September and the Fed was very measured in its tightening. Also, the Trump economic agenda was an absolute mess. The President was in high-profile verbal spats with one Republican senator after another, making a mockery of the bombastic election promises that put this alleged “deal maker” in the White House. Still, with midterm elections a year away and with the Republican majority eager to remain in power, both the executive and legislative branches should be motivated to find a new form of cooperation. After all, after authoring “The Art of the Deal” and filing for bankruptcy in many of his ventures, the President also wrote “The Art of the Comeback.”

Expectations have been lowered enough for Trump to surprise us on the upside. If he does, that would be a big dollar positive, combined with accelerating quantitative tightening by the Federal Reserve. Plus, the forces that propelled the euro from under $1.04 to over $1.20 will no longer be with us in 2018.

Much of the euro appreciation was due to pro-EU election victories in the Netherlands, France, and Germany, although the latter saw the far-right anti-immigration Alternative for Germany get into the Bundestag. With difficult Brexit negotiations ahead for Britain and the EU, the Catalonian crisis playing out in real-time and a still-serious deflationary threat, I don't see how the euro can stay up.

Germany Two Year Schatz Yield versus United States Two Year Note Yield Chart

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

The 2-year notes in the U.S. and Germany tell a story of a Federal Reserve in tightening mode and an ECB that is still trying to get Europe out of its deflationary quagmire. The 2-year German federal notes, officially called bundesschatzanweisungen, are dubbed Schätze to avoid tongue injuries. The Schatz rate closed Friday at -0.74% and may go lower, given EU political frictions. The U.S. 2-year note, by contrast, closed at 1.59% (a +2.33% spread) and is probably headed higher, given where Fed policy is headed.

On May 2, 2015, in Up and Down Wall Street in Barron’s, there was a column titled, “German Bunds: The Short of the Century.” In that column, Randall Forsyth explained how current and former bond kings were salivating over their shorts in the German bond market – be it the bundesschatzanweisungen or the bundesanleihen, the name of the 10-year bunds. In the markets, bombastic statements can spectacularly backfire on self-assured prognosticators. So far, neither bond king, Gross or Gundlach, has been right.

European Financial Stability Facility Bond Yield Chart

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

In fact, self-assured prognosticators should take note that EU confederate bonds – aka, the European Financial Stability Facility bonds – just hit an all-time record negative yield of -0.51%. There is something about the words “financial stability” and “record negative yields” that makes the name of those bonds sound oxymoronic. The economic and political situation in Europe is not good and the temporary stabilization in 2017 may be already over, which should be negative for the EURUSD cross rate.

U.S. Dollar’s Effect on Gold

For all the reasons outlined in this column, the gold market was not as weak as I thought it would be. It looks like the odds are against me in my over-the-counter binary put option contract-of-sorts that I made in early 2017. The counterparty in that binary put contract with a strike price of $1000, Gary Alexander, has been salivating for a while on the $1,000 check coming to him through the mails on January 1, 2018. (See Marketwatch” “I’m betting a colleague that gold will fall to less than $1,000 an ounce this year.”)

Gold Price Chart

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

For all the reasons mentioned in this column, I plan to ask my counterparty to enter into an identical over-the-counter put option contract with a strike price of $1,000 for 2018. Since Gary is a good sport, I suspect that he will enter into a 2018 transaction.

Chinese Yuan versus China Foreign Exchange Reserves Chart

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

The only way that I can see gold decline below $1,000 in 2017 is if the Chinese decide to do a hard yuan devaluation and/or the North Korean situation turns into a nuclear conflict. These events are impossible to predict with accuracy ahead of time, but I think a yuan devaluation is coming and the standoff with North Korea is deteriorating. These dramatic events are now more likely in 2018 than before the end of 2017.

Sector Spotlight:

*All content of "Sector Spotlight" represents the opinion of Jason Bodner*

Is the Glass Half-Full, Half-Empty…or Something Else?

by Jason Bodner

The glass is either half full or half empty, right?  Our assumption is that an optimist says the glass is half full (and rising). The pessimist sees it half empty (and falling).  This is where the story ends most of the time, especially when trying to teach our kids a lesson. Of course, it’s not that simple. The realist sees a glass with water in it. The idealist sees a possibility for all to drink clean water in the future. A communist sees a single drop of water for everyone. The capitalist sees a business opportunity to sell the water. The conspiracist thinks the water must be tampered with by the government in order to attempt to control the mind of the drinker. The pragmatist says, “Here’s some water. Let’s drink it now and talk about it later.”

How A Glass of Water is Viewed Image

Creating many “realities” from one glass of water may seem silly, but how is this different than viewing the market, or real life, for that matter? There are so many potential outcomes, points of view, and interrelated scenarios in every situation, that defining just two possibilities seems incredibly limited.

The half full vs. half empty reduction shows how we try to simplify everything into a polarizing black and white world – in terms like left vs. right, blue vs. red states, bulls vs. bears. I saw something like this on CNBC last week: “Is the market toppy and does it need to correct? Or does this bull market have room to run? We will go over the poll results after this commercial break.” They framed it as an either/or question.

The real question to ask is this: “Presented with multiple variables in this particular setting, what are YOU going to do about it?” The best that most of us can do is to collect the data, organize it, analyze it, and plan a course of action, so let’s do that for U.S. stocks (and sectors) right now.

Six of 11 S&P Sectors Declined Last Week

The market sold off notably – for like half a day. Then, more solid tech stock earnings came out and blew away expectations, so we rallied higher.  The market seems like it has a Teflon coating and just wants to go higher. This is nothing new, but where do we continue to place our bets, and how high can stocks go?

Let’s look for some answers in the sectors and their earnings. Last week delivered another big surge in the Information Technology sector index, which posted a +2.87% rise for the week. Consumer Discretionary also posted a decent gain of +1.12%. For the first time in a while, however, we saw more sectors with negative performance than positive: six of the 11 S&P sectors were down last week.

Standard and Poor's 500 Weekly Sector Indices Changes Table

As the market continually hits new highs, anxiety builds for when the next correction will come.  Nothing can be parabolic without consequence. I wouldn’t call the overall market increase parabolic, but the Info Tech sector has popped nearly 7% for October. That’s a bit wild as the growth in the sector just seems to continue and it sits firmly in the pole position for six months’ performance. So are we headed for doom?

Standard and Poor's 500 Monthly, Quarterly, and Semiannual Sector Indices Changes Tables

Next, look at the earnings.  According to FactSet, for Q3 2017, 55% of S&P 500 companies have already reported earnings. Over three in four (76%) posted positive EPS surprises and 67% showed positive sales surprises. The blended earnings growth rate for the S&P 500 is 4.7%. The good news is that earnings and sales continue to be solid and impress. The troubling news is that the forward 12-month P/E ratio for the S&P 500 is 17.9. This is above the 5-year average (15.6) and well above the 10-year average (14.1).

Unsurprisingly, we find Infotech showing the highest number of earnings-beats for Q3 thus far, followed by Materials, Financials, and Health Care. These are the sectors that keep earning leadership positions.

Standard and Poor's 500 Earnings and Revenues Estimates Bar Charts

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

It should also come as no surprise that the same winning sectors have delivered sales beats as well.

We are at new highs once again. For some “half-empty” bears, it’s getting intensely uncomfortable the higher we go. It causes vertigo for some. The reality is that we are at highs and the market will certainly cool at some point. But for now, earnings and sales continue to please investors and with global rates low, dividend rates solid, and with a strong U.S. economy, I see the bull case for U.S. equities as still intact. We can debate the fullness of the glass all we want, but each day that goes by the market ticks higher.

A scientist can demonstrate that there are more atoms in a glass of water than there are stars in the observable universe. My problem is that I can look at the same glass and be a relativist, pragmatist, optimist, pessimist, opportunist, idealist, and capitalist all in the same moment. The best course of action for someone like me is to be an alert “reactionist.” I approach markets as dynamic and flowing organisms, so I seek to identify trends to profit from. I back that up with meaningful data analysis but also realize that losses are part of the game. I just want to extract a meaningful edge and play for the long term.

Adopting a view like this makes looking at the glass much easier. If you see a glass with water in it, it is likely not EXACTLY half full or half empty. George Carlin throws even that metric into chaos: “Some people see the glass half full. Others see it half empty. I see a glass that’s twice as big as it needs to be.”

George Carlin Quote Image

A Look Ahead:

*All content in this "A Look Ahead" section of Market Mail represents the opinion of Louis Navellier of Navellier & Associates, Inc.*

Venezuela Continues to Sink into Chaos

by Louis Navellier

Nearly every global economy is growing well, with one notable exception. Venezuela failed to make a $237 million bond payment several days ago and has accumulated $349 million in unpaid bond interest in the past month, so Caracas has $586 million in interest that it has failed to pay in the past month.

Last Friday, the Venezuelan state-owned oil company, PDVSA, had an $842 million principal payment due, plus back interest.  Next Thursday, PDVSA has another $1.1 billion principal payment due.  So, as of Thursday, Venezuela is expected to be in default on over $2.5 billion.

When I was in Miami and Washington D.C. last week, I kept asking who is going to be exerting their influence in Venezuela moving forward.  I happen to know two clients who are due money from PDVSA and they do not expect to ever be paid, due to new U.S. sanctions as well as PDVSA’s bond defaults.

Since China and Russia have invested heavily in Venezuela, the impact of Venezuela on the world oil market if PDVSA is taken over by China or Russia will be fascinating to watch.  In the meantime, the humanitarian disaster in Venezuela persists.  According to the Miami Herald (October 26, 2017), inflation is running at a 536% annual rate and monthly pension checks are worth less than $5 on the black market.

Venezuelans Standing in Line for Monthly Pensions Image

Starvation is rampant there – as it is in another isolated communist dictatorship – North Korea.

The U.S. (and Most Other Capitalist Economies) are Growing by 3% or More

Last Friday, the preliminary report on third-quarter U.S. GDP growth reflected an annual growth rate of 3%, higher than the economists’ consensus estimate of a 2.7% annual pace.  Second-quarter GDP growth was also revised to a 3.1% annual pace, so the past six months (second and third quarters) represented the strongest six-month expansion since mid-2014.  Economists were impressed that despite Hurricanes Harvey and Irma the U.S. economy continued to grow at a 3% annual pace in the third quarter.

As part of the GDP report, we learned that consumer and business spending grew at an annual pace of 2.4% and 3.9%, respectively, in the third quarter.  Exports grew at a 2.3% annual pace, while government spending declined -0.1%.  If exports continue to rise due to a weak U.S. dollar, the trade deficit will continue to decline and help boost GDP growth.  It looks like 3% GDP growth could persist for a while.

On Wednesday, the Commerce Department announced that new home sales surged 18.9% in September to an annual pace of 667,000, well above economists’ consensus estimate of 550,000 and the largest monthly increase in 25 years.  In the past 12 months, new home sales are running 17% above where they were a year ago and are now running at the fastest pace in a decade (since October 2007).

Naturally, after Hurricanes Harvey and Irma, demand for new homes in the Southeast surged by 25.8%.  Furthermore, home sales in the West will now likely be boosted by rebuilding following the devastating fires in Northern California.  One economist described new home sales as “shockingly strong.”

The Commerce Department also announced on Wednesday that durable goods orders surged 2.2% in September, well above economists’ consensus estimate of 0.8%.  Excluding the volatile transportation sector orders (rising 5.1% in September), other durable goods orders still rose a healthy 0.7%.  What was the most impressive is that business investment rose 1.3% in September, the eighth increase in the past nine months.  Business spending is now running 7.8% higher than a year ago and running at the fastest annual pace in over five years. Due to stronger-than-expected durable goods orders, economists are now revising their third-quarter GDP revisions higher, so we are seeing uniformly good economic news now.

With a growing economy and growing stock market, another Fed interest rate hike in December is likely.


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IMPORTANT NEWSLETTER DISCLOSURE: The 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 performances should be considered mere "paper" or proforma performance results. Navellier & Associates, Inc. does not have any relation to or affiliation with the owner of these newsletters. There are material differences between Navellier & Associates' Investment Products and the InvestorPlace Media, LLC newsletter portfolios authored by Louis Navellier. The InvestorPlace Media, LLC newsletters and advertising materials authored by Louis Navellier typically contain performance claims that do not include transaction costs, advisory fees, or other fees a client may incur. As a result, newsletter performance should not be used to evaluate Navellier Investment Products. The owner of the newsletters is InvestorPlace Media, LLC and any questions concerning the newsletters, including any newsletter advertising or performance claims, 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. Request here a list of recommendations made by Navellier & Associates, Inc. for the preceding twelve months, please contact Tim Hope at (775) 785-9416.

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It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. Click here to see the preceding 12 month trade report.

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 intended as an offer or 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.

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 of any offer 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 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 you. 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. Results presented include the reinvestment of all dividends and other earnings.

Past performance is no indication of future results.

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 intended or 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 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 performances should be considered mere "paper" or proforma performance results. Navellier & Associates, Inc. does not have any relation to or affiliation with the owner of these newsletters. There are material differences between Navellier & Associates' Investment Products and the InvestorPlace Media, LLC newsletter portfolios authored by Louis Navellier. The InvestorPlace Media, LLC newsletters and advertising materials authored by Louis Navellier typically contain performance claims that do not include transaction costs, advisory fees, or other fees a client may incur. As a result, newsletter performance should not be used to evaluate Navellier Investment Products. The owner of the newsletters is InvestorPlace Media, LLC and any questions concerning the newsletters, including any newsletter advertising or performance claims, 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. Request here a list of recommendations made by Navellier & Associates, Inc. for the preceding twelve months, please contact Tim Hope at (775) 785-9416.

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