Decline Breaks Winning Streak

A Tiny 0.2% Market Decline Breaks an 8-Week Winning Streak

by Louis Navellier

November 14, 2017

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

The eight-week winning streak in the S&P 500 ended last week, but I wouldn’t call a 0.2% decline anything to worry about! With approximately 90% of the S&P 500 companies having announced their third-quarter results, average sales growth is up 5.9% and average operating earnings are growing at an 8.3% annual pace – both well above analysts’ estimates. Looking forward, the analyst community is expecting the S&P 500 to post fourth-quarter sales growth of 5.4% and earnings growth of 11%. If earnings re-accelerate this rapidly, I expect to see this bull market continue well into early 2018.

Tax Reform Package Image

The stock market is also getting excited about the impending tax reform, in which American businesses are expected to be the biggest beneficiaries. The rumblings that the Senate may shelve the tax bill rattled the stock market on Thursday, but, in my opinion, this is normal Beltway gossip, since the GOP leadership knows that they must pass some meaningful tax reform or risk losing the 2018 mid-term elections.

Ironically, taxpayers in the Blue States – with lots of itemized deductions from paying excessive state income taxes, property taxes, and mortgage interest – seem to be the biggest losers of the proposed tax plan, unless they pay the Alternative Minimum Tax (AMT) and cannot utilize all their deductions. By limiting mortgage interest deductions on new homes to $500,000 and property tax deductions to $10,000, the proposed tax bill is viewed as not being very real estate-friendly and a boon to the stock market, since the bill may cause many home buyers to invest more in the stock market and invest less in new homes.

In This Issue

Bryan Perry starts off this week by analyzing how the current tax plan would impact income investors (spoiler alert: not much). Then, Gary Alexander examines the entire 104-year history of the Federal Reserve to offer some advice to our incoming Fed Chairman. Ivan Martchev examines how any Fed tightening would impact junk bonds (one-word answer: Negatively). Jason Bodner compares this bull market to a supernova that never seems to die, while I close with a look at the Fed, bitcoins, and China.

Income Mail:
The Latest Tax Reform Plan Won’t Change Much for Income Investors
by Bryan Perry
Tax Reform: Rearranging the Deck Chairs on the Titanic

Growth Mail:
Will the New Fed Chairman Learn from History?
by Gary Alexander
The Danger of Worrying Overmuch About Inflation

Global Mail:
Rumble in the Junk Bond Jungle
by Ivan Martchev
How Fed Tightening Affects Junk Bond Prices

Sector Spotlight:
History Doesn’t Always Repeat Itself
by Jason Bodner
The Big Winners and Losers Last Week

A Look Ahead:
The Biggest Challenges Facing the New Fed Chairman
by Louis Navellier
Beware a Brewing Bubble of Bitcoin Bets in China

Income Mail:

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

The Latest Tax Reform Plan Won’t Change Much for Income Investors

by Bryan Perry

No one doubts that the current effort to reform the tax code remains a highly fluid situation, but some kind of tax bill will likely find passage before the 2018 mid-term elections. With unified control of the White House and Congress, the GOP aims to pass a tax reform plan late this year, despite lingering challenges. Trimming the tax burden on businesses and individuals has long been a Republican goal. The question facing investors and the stock market is what final form the tax reform will take, and more importantly, how it will impact the bulk of our investment-related income, notably dividends and interest.

As always, the devil is in the details. The latest version of tax reform making its way through the Senate reveals serious issues facing GOP lawmakers, including large budget deficits generated by the deep tax cuts, opposition from blue-state House Republicans regarding the elimination of certain deductions, and backlash from Democrats who say the proposals will not go far enough to help middle-class workers.

Instead of trying to speculate about what new changes may take root in a final version that stands to pass both the House and the Senate, I think it might be more constructive to consider what likely won't change if this (or reasonably similar) legislation passes. Understanding where there is common ground between establishment Republicans and the fiscal conservative (Tea Party) Republicans is a good starting point, for without some agreement between the two GOP factions there will be no simple majority vote.

The current bill makes no changes to long-term capital gains tax rates, which also apply to qualified dividends. These rates are currently 0% for taxpayers in the two lowest tax brackets, 15% for the next four brackets, and 20% for taxpayers in the highest tax bracket. This proposal keeps the same income thresholds in place that apply to these new rates. In addition – to the great dismay of Trump voters – the 3.8% net investment income tax on high earners (part of the Affordable Care Act) isn't going anywhere.

Also, retirement savings tax breaks aren't changing at all. Although lawmakers had considered reducing the maximum amounts you could contribute annually to a 401K, IRA, or other tax-advantaged retirement plan, such cuts were left out of this proposal. Finally, short-term capital gains and interest income would still be taxed at your new ordinary income rate. For example, if you're currently in the 15% tax bracket (on interest income), your interest income could soon be taxed at a proposed lower rate of 12%.

Tax Reform: Rearranging the Deck Chairs on the Titanic

The part of this grand tax makeover that makes me question the wisdom (or lack thereof) of Congress is the ballooning of our federal debt in the early years of the plan. Tax cut sponsors answer by saying that tax cuts drive the economy’s growth rate, yielding massive tax revenues in the out-years of the 10-year blueprint submitted to the Congressional Budget Office (CBO) for its analysis and blessing.

While tax reform is a vital part of any economic growth strategy, so is bringing the national debt under control. As a share of the economy, debt held by the public is currently 77% of Gross Domestic Product (GDP), which is higher than it has been since the end of World War II and nearly twice the average of the last 50 years. On its current path, debt will exceed the GDP by 2033 and exceed 150% of GDP by 2047. High and rising debt threatens wage growth, the government’s ability to respond to new challenges, and the nation’s fiscal sustainability. With any tax plan, politicians need to reduce the debt, not add to it.

Historical and Projected Debt-to-GDP Ratio Chart

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

According to a report by the Committee for a Responsible Federal Budget (“Tax Reform Should Not Add to the Debt,” August 30, 2017), while well-designed tax cuts can promote economic growth that leads to more revenue, there is no realistic scenario in which “dynamic revenue” will be as large as the initial tax cut. In order for a tax cut to pay for itself, it would need to grow the economy by $4 to $6 for every $1 of revenue lost. At best, dynamic revenues from growth could pay for only a fraction of the tax cut’s cost.

The assumption that this Congress or the next Congress (elected in 2018) is going to embark on a future fiscal federal spending plan is pure fantasy. But without spending cuts that coincide with the projected tax cuts, the amount of spending cuts needed to avoid fiscal calamity in the out years balloons.

Spending Cuts needed to Meet Fiscal Targets Bar Chart

The current tax reform movement has all the makings of rearranging the deck chairs on the Titanic in that the middle class will maybe see a $500 net change in their tax savings per year – and that’s a big maybe. At the same time, the national debt will widen by at least $1.5 trillion over the next 10 years and that doesn’t include the threat of future inflation. From the chart below, headline inflation risk is at the doorstep of becoming a major talking point for the markets and for future Fed policy.

HeadlineInflation.jpg

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

The urgency to pass tax reform for political reasons doesn’t begin to take into account the long-term implications if the consequences of such actions aren’t well thought out and weighed against a responsible cost/benefit analysis. In their ineffective fight against Obamacare, the Republicans offered no change to a failing healthcare system. Let’s hope Congress learned something from that exercise and will not just pass tax reform for the sake of claiming that they “passed a tax bill” in President Trump’s first year.

Growth Mail:

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

Will the New Fed Chairman Learn from History?

by Gary Alexander

America’s central bank was born in 1913 but it was conceived in the Panic of 1907. On November 15, 1907, the Dow Jones Industrials bottomed out at 38.83, almost 50% below its peak of 75.45 set on January 19, 1906. The Dow wouldn’t surpass its 1906 high until 1916, but the 1907 Panic was relatively short-lived because private super-banker J.P. Morgan personally saved the nation by providing overnight credit and forcing other bankers to follow his lead. After the dust settled, however, Morgan, age 70, said he didn’t want to play Superman anymore, so he advised Congress to create some kind of central bank.

The new central bank had to learn through experience, with alternating bouts of inflation and deflation:

United States Inflation Rate Chart

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

First, the Fed fueled too much liquidity during World War I. The Consumer Price Index (CPI) rose by a total of 83% in four years: 1916 (+12.6%), 1917 (+18.1%), 1918 (+20.4%), and 1919 (+14.5%).

Then, the Fed slammed on the brakes in 1920, causing a flash Depression. The rate of CPI deflation in 1921 was -10.8%, followed by 2.3% deflation in 1922. Monetarily, the Roaring 20s didn’t roar much. You can see the moderate rates of rotating deflation and inflation from 1922 to 1929 in the chart, above.

After the stock market crash of 1929, however, the Fed cut the money supply by a third, resulting in three years of steeply plunging prices: -6.4% in 1930, -9.3% (1931), and -10.3% (1932). From 1920 to 1932, the CPI fell by 32.5%, but if you add up all the wild swings of inflation (1915-19) and deflation (1920-32), the average inflation rate (1913-32) would be 1.5%. That shows why so many “averages” are misleading!

The good news is that the Fed earned its sea legs and enjoyed 35 years of fairly stable management under two long-serving Fed Chairmen: Marriner Stoddard Eccles (serving 1934-1948) and William McChesney Martin (1951-1970). They helped engineer America’s mid-Depression recovery and our greatest decades of postwar growth. (Never heard of them? That’s great! A Fed Chairman shouldn’t be making news.)

The Fed then lost its way under Nixon’s appointment of Arthur Burns (Fed Chairman, 1970-78). He responded to political pressure for more liquidity by letting the inflation genie out of the bottle. Then, Paul Volcker (serving 1979-87) throttled inflation back into a manageable range of 1% to 5% since 1983.

Unfortunately, the last three Fed Chairmen have spent a lot of their time fighting “phantom inflation.”

The Danger of Worrying Overmuch About Inflation

President Donald Trump just nominated Jerome Powell as the 16th Chairman of the Federal Reserve.

The two most recent Fed Chairs (Ben Bernanke and Janet Yellen) have been gun-shy about a supposedly fragile economy after the 2008 financial crisis, so they kept key short-term rates abnormally low – below 1% for almost a decade. Now, the Fed is gingerly taking rates above 1%, still low by historical standards.

Before Bernanke, Alan Greenspan was the Fed Chairman for a near-record 18+ years. Three years ago, I was honored to interview Alan Greenspan at the New Orleans Investment Conference in a panel and also in a one-on-one conversation. I was polite in my questions, but I asked him about the Fed’s role in the business cycle and market cycle – including the Fed’s role in the market disruptions during his tenure:

  • The 1987 crash: Greenspan took the reins of the Federal Reserve on August 11, 1987. He made a rookie mistake of raising the Fed’s Discount Rate 50 basis points on September 4, fighting a return of phantom inflation. This caused a market panic: The next day, the Dow fell 2.5% and the Prime Rate rose a full point to 9.25%. After Black Monday (October 19, 1987), Greenspan quickly cut the Discount Rate back to where it was before he took office. Later, he raised rates six times in 1994.
  • The real estate crash: Greenspan left the Fed in 2006, but not before keeping the Fed Funds rate under 2% from 2002 to mid-2004. Low rates led many families to refinance their homes at a lower rate, using their homes like an ATM machine to buy better cars, bigger homes, and these wonderful new electronic toys – flat screen TVs, computers, and the emerging smart phones. Then, by raising rates 17 consecutive times from mid-2004 to mid-2006, the Fed shut off that liquidity, leading to a peak in real estate prices and a subsequent crash in mortgage derivates, leading to the 2008 crisis.
  • The 2000 crash: Greenspan raised rates from 4.8% to 6.5% in 1999, but the market kept rising. Due to widespread (but unfounded) fears of Y2K computer glitches, the Fed flooded the market with liquidity in late 1999, fearing there would be a run on cash in the banks. That didn’t turn out to be the case, so investors used that cash to create a market “melt-up” (most notably in NASDAQ tech stocks) in early 2000. Then, Greenspan sopped up some of that excess liquidity in early 2000, leading to a sudden halt in buying as many tech stocks collapsed sharply during April, 2000.

Fed Funds Rate Chart

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

Fed Chairmen, like military generals, tend to fight the current war based on the realities of the last war rather than focusing on the new weapons deployed by the current enemy. War has changed drastically and so has monetary economics. It is important to fight the risk of real inflation, but not phantom inflation.

Global Mail:

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

Rumble in the Junk Bond Jungle

by Ivan Martchev

A veteran of the bond trading business with 35 years in the trenches once told me that junk bonds: “read like a bond but trade like a stock.” He was referring to the well-known correlation of junk bond prices to stock prices – a weak junk bond market means a weak stock market and vice versa. After all, junk bonds are the riskiest bonds and stocks are even riskier due to the seniority of the claims on debt vs. equity.

This is a good place to mention the absurdity, still being taught in business schools today, that how one finances a business – with debt or equity – is irrelevant from a theoretical perspective. This might make sense in academia, but in the real word the difference between debt and equity is huge. Bonds are about the return of capital while stocks are about the return on capital. Bonds have a maturity date, so the bond holders can refuse to roll over the debt. Stocks don’t have maturity dates. While some finance professor may think that the source of funding between debt and equity is irrelevant, it matters in the real world.

Just ask a highly-leveraged shale oil producer whose junk bonds were coming due when the price of oil had fallen below the cash break-even point of production. (We had quite a few of these situations in early 2016.) If there were no debt on the books, the shale oil producer could shut down operations and resume later on, when oil prices recovered. If there were a lot of debt, however, and the bondholders refused to roll over the debt, a Chapter 11 filing would be imminent. I would love to watch some finance professor tell a leveraged oil company CEO there is no difference between debt and equity financing in business.

Bank of America Merrill Lynch Junk Bonds Chart

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

To be fair, the latest weakening in junk bond prices is not all that dramatic, but when taken in the context of a Fed tightening cycle and a Treasury yield curve that is the flattest in 10 years as of  last week – at 67 basis points, as measured by the 2-10 spread – small moves in junk bond prices become more meaningful.

At the end of November, the present economic expansion will be eight years and five months long, which will make it the third longest in the past 240 years. There are only two other economic expansions that were longer – one nine years long and one 10 – so we’re not that far away from a recession, historically. An inverted yield curve has preceded each of the past five recessions. We’re not there yet, but if the shrinking yield slope continues, along with a Fed tightening cycle continuing in 2018, the 2-10 lines should meet.

How Fed Tightening Affects Junk Bond Prices

One-word answer: Fed tightening affects junk bond prices negatively.

The tightening of credit conditions, albeit in baby steps, as the Fed has done this time around, hits the worst creditworthy borrowers first. Also, a lot of bonds are bought on leverage by institutional investors, resulting in a carry trade spread that gets riskier and riskier as the Fed tightens monetary policy due to rising funding costs as well as the effect of deteriorating economic conditions on junk bond borrowers. It’s the liquidation of leveraged carry trades in the junk bond market that resulted in the junk bond crash of 2008, which arguably was preceded and catalyzed by the mortgage-bond fiasco that began in 2007.

Because of the Fed’s various QE programs, monetary tightening will be more in the form of quantitative tightening (QT?) rather than hikes in the fed funds rate in this cycle. Presently, the Fed runs $10 billion of bonds off its balance sheet each month. That means $10 billion worth of maturing bonds that don't get reinvested in new bonds. As that rate of bond run-off rises, let's say to $50 billion a month, the Fed's balance sheet will begin to shrink and long-term interest rates will likely rise. Then, a correlation of a shrinking Fed balance sheet and rising junk bond spreads is likely to become persistent in 2018.

United States Central Bank Balance Sheet Chart

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

It appears to me that junk bond spreads to the relevant Treasuries have nowhere to go but up, meaning that 2018 should be a bad year for the junk bond market – the same way 2015 was.

The economic expansion is getting too long and the Fed monetary tightening cycle looks like it may continue in 2018. I think that will be the perfect one-two punch for the junk bond market.

Sector Spotlight:

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

History Doesn’t Always Repeat Itself

by Jason Bodner

As a science nerd, I’ve talked a lot about supernovas in this column. They are the largest explosions ever witnessed in the universe and they occur when huge stars collapse on themselves and die. What makes supernovas really cool to me is that their explosions create all of the heavier elements in the universe, like iron, silver, and gold. There is no other known force great enough to do this. Therefore, everything in the universe (including you and me) is born from star stuff. Star deaths bring new life, and the cycle goes on.

What usually happens in a supernova is that a big star runs out of fuel in its core and can't burn anymore, so its massive gravity collapses inward. The star explodes spectacularly and that's it: Game over. They typically flicker out about 100 days after the explosion. But just this past week, astronomers at Las Cumbres Observatory in Goleta, California, released reports of a star that has gone supernova and shined brilliantly for 600 days. This star has actually exploded five times over the course of two years, hurling out the equivalent of 50 Jupiters and as much energy as 10 quintillion suns. What’s even more strange, astronomers first saw it exploding 60 years ago. It just keeps on exploding, confounding scientists and turning our understanding of how supernovas work on its ear. To put in context how bizarre this is, it’s as if you met a human being who is 600 years old but who died five times already and now looks 60. Weird.

Supernova Image

Down here on earth, this stuff doesn't really mean much for how we live our everyday lives, but what it does do is highlight yet again the potential dangers of operating on the basis of false preconceptions.

Perhaps not many of us remember a little over a year ago on November 8th, 2016, that the S&P 500 closed at 2,139.56 and the DJIA closed at 18,332.74. On that night, when it became increasingly apparent that Donald Trump might win, the Dow Jones Industrial Average futures fell over 750 points during the night. The initial perception was that his presidency would be bad for the markets. If on election night, someone told you “the Dow will be more than 27% higher a year from now,” what would you have said? But a year later, on November 10th, 2017, the S&P 500 closed at 2,582.30 and the DJIA closed at 23,422.21.

Market Futures Collapse on Presidential Election Evening Image

Standard and Poor's 500 and Dow Jones Industrial Average Immediately Following Presidential Election Charts

The Big Winners and Losers Last Week

Last week, the media began talking about the market snapping its 8-week win streak, citing the potential for a bigger pullback. For the first time in a month, stocks finished lower two days in a row. Some Health Care stocks saw some blood after these analyst comments. Basically, their theory was that Amazon (AMZN) will impact the healthcare industry over the next few years. The widespread assumption seems to be that Amazon will take over every industry and disrupt everything. With that chilling prospect in the context of an overall down market, the Healthcare sector dropped -0.54% last week. (Please note: Jason Bodner does not currently hold a position in Amazon. Navellier & Associates does currently own a position in Amazon for client portfolios).

Infotech finished flat, but we are seeing some high-flyers suffer some profit taking – not unexpected for a sector that is +6.3% for the month and +40.4% for 12 months! I continue to be asked if I am still bullish on tech, and I continue to answer Yes. The sector still boasts growth in sales, earnings, and innovation.

Energy is another place to continue to watch. The sector popped +2.06% for the week and boasted great sales and earnings growth. We also saw last week why Real Estate and Financialswere decoupled into two separate sectors. Investors fled to the typically higher yield landscape of Real Estate from Financials. Real Estate boasted an eye-popping +3.21% performance while Financials suffered a -2.65% setback.

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

Human beings operate on the basis of assumptions – and then we get surprised. Then, we change our assumptions, and then get surprised again. The cycle then goes on and on and on. It happens on the macro-economic, sector, and notably on single stock levels. Think of all the analyst earnings “surprises.”

What is the best way to proceed in an environment like this? The answer is to analyze, adapt, and react. There is great appeal in following a trend: Trend-following works in so many avenues of life. We follow trends in neighborhoods, clothes, food, friends, what we talk about, and what the press covers. Why, then, should we expect smart investors to routinely outsmart the markets by moving counter to a trend?

When it comes to specific stocks, we see a company that is doing great and unique things and is well positioned for a take-off! But until it does, it’s just a hunch. I prefer to let the data tell me of a trend underway. Let the market show its direction, then let the sectors tell you who is leading. Then identify which stocks lead the strongest sectors. Look for the strongest sales and earnings growth with the healthiest financials. Then, watch for when big institutions step in to make a big bet.

Billy Beane Quote Image

As depicted in Moneyball, Oakland A’s General Manager Billy Beane used player data to turn a failing team into a success. His winning formula: “We've got to use every piece of data and piece of information, and hopefully that will help us be accurate with our player evaluation. For us, that's our life blood.”

Stacking all these odds in your favor is more powerful than making a hunch bet. Sometimes the greatest stories are just great stories. I’ll wait until they exhibit the data that identify them as leaders of tomorrow.

A Look Ahead:

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

The Biggest Challenges Facing the New Fed Chairman

by Louis Navellier

New York Federal Reserve President William Dudley announced last week that he will be following Fed Chairman Janet Yellen and Vice Chairman Stanley Fischer into retirement. So, effectively, the top three Fed officials are making way for new Fed Chairman Jerome Powell to reshape the Federal Open Market Committee (FOMC) when he takes over on February 3rd. The new Fed Chairman-designate is perceived to be more market friendly and open to tax reform than his predecessors, which should help boost stocks.

Tax reform is anticipated to speed up the velocity of money – the speed at which money changes hands. In theory, rising monetary velocity delivers more money more rapidly to more people, so it helps more people grow and prosper. The potential downside is inflation. Mr. Powell will be in charge of thwarting any inflation. Since his appointment, 10-year Treasury bond yields have moderated a bit on the perception that inflation is not expected to come back immediately, but I should also add that the bid-to-cover ratios for Treasury auctions remain healthy, so it does not appear that market rates will be rising rapidly.

Furthermore, the Treasury yield curve is now the flattest that it has been in a decade. Since the Fed does not want to invert the yield curve, it’s possible that there could be only one more Fed interest rate hike.

Speaking of inflation, West Texas Intermediate (WTI) crude oil prices have risen from $42.53 in June to $56.74 last week due to strong demand from Asia as well as the current corruption crackdown in Saudi Arabia. Currently, more than 60 princes, officials, and high-ranking Saudi officials have been detained in a Ritz Carlton. The Saudi Arabian Monetary Authority on Tuesday announced that it has frozen the bank accounts of “persons of interest” and said that the move is “in response to the Attorney General’s request pending the legal cases against them.”  This purge is expected to collect up to $800 billion in assets and help replenish depleted Saudi Arabian government accounts. This silent and orderly coup has caused crude oil prices to rise on fears of continued unrest in Saudi Arabia. Moderately higher crude oil prices are a net boom to the U.S., since more crude oil production will now likely come back on line.

Beware a Brewing Bubble of Bitcoin Bets in China

Much of the recent surge in bitcoin demand is emanating from China, where it has been the preferred currency for tax evasion and illicit activities. So as bitcoin prices continue to go parabolic, it is signaling that the underground economy in China and other countries is booming. I should also add that Chinese are notorious gamblers, so some of the bitcoin boom is also likely due to speculation. I am not recommending bitcoin, but instead prefer to play the boom in crypto-currencies via NVIDIA (NVDA), a company that benefits from the boom in bitcoin and the development of other electronic currencies. (Please note: Louis Navellier does currently hold a position in NVIDIA. Navellier & Associates does currently own a position in NVIDIA for client portfolios).

There is growing concern over China’s growth because it was announced last Wednesday that October exports rose 6.9% (down from 8.1% in September) and imports rose 17.2% (down from 18.7% in September). This “slowdown” in exports and imports is like slowing your car down from 150 mph to 135 mph. The bottom line is China is still growing very fast and any Chinese critics should take a “chill pill.”  Not surprisingly, many Chinese ADRs reported stunning third-quarter sales and earnings last week.


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.

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Marketmail Archives Trade Summary

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.

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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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