High Frequency Trading

High Frequency Trading Often Leads to Wide Daily Market Swings

by Louis Navellier

May 4, 2015

Last week, Wall Street panicked over weak GDP growth and lackluster first-quarter sales and earnings, but Friday’s strong recovery seemed to indicate that traders would continue to buy stocks on weakness.

Stock Market Corrections ImageI expect that the stock market will continue to rally after corrections, like it did last Friday.  There’s also a great deal of sector rotation going on. Last Monday, for instance, healthcare and pharmaceutical stocks corrected on virtually no news.  In this age of High Frequency Trading (HFT), what goes down one week often goes up the next week.  For instance, semiconductor stocks, which were hit in the previous week, rebounded strongly on Friday. Many other stocks were hit with  profit-taking. This rotational correction is eerily similar to the first half of October 2014 before the intraday reversal on October 15.

Despite rising volatility, stock dividends and buy-backs continue to drive this market higher.  In 2014, companies returned $904 billion to shareholders via dividends and buy-backs.  Furthermore, Bespoke said last Monday that the S&P 500 now yields more (1.96%) than 10-year Treasury securities (1.94%). In addition, they isolated 315 of the S&P 500 stocks that yielded more than 5-year Treasuries and 131 S&P 500 stocks that yielded more than 30-year Treasuries (as of their report’s issuance date on April 27).

Dividend Yields of S&P 500 Stocks Relative to Treasuries Chart

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

Historically, after the three previous times in which the S&P 500’s dividend yields exceeded the 10-year Treasury yields, the S&P 500 rose by an average of 31.5% in the next 12 months (source: MarketWatch).

Given a choice,  I believe investors often prefer dividends over an equivalent amount of interest income, since most dividends are taxed at a maximum rate of 23.8%, while interest can be taxed at a 43.4% maximum rate.

In This Issue

In Income Mail, Ivan Martchev will take a close look at the ultra-low bond rates in Japan and Germany as well as the Greek exit situation and the shrinking possibility for multiple rate increases at the Fed. Then, in Growth Mail, Gary Alexander will counter the media’s downbeat post-mortem on stocks in April, plus the madness of “selling in May” (or going away).  Later on, I will cover the latest GDP and consumer confidence statistics, which in my opinion gives us more evidence that the Fed is unlikely to raise rates any time soon.

Income Mail:
The “Short of the Century” May Last a Little Longer
by Ivan Martchev
More Silver-Platter Gifts from the Greeks
Fed to Economy: “Mission Accomplished”

Growth Mail:
Believe it Or Not, April was a Positive Market Month
by Gary Alexander
Don’t “Sell in May” (or Go Away)
A Review of Buffett’s “Woodstock for Capitalists”
Don’t Bet Against America – Even in Tough Times

Stat of the Week:
First-Quarter GDP Rose Only 0.2%
by Louis Navellier
Consumer Confidence Surveys Send out Conflicting Answers
Even China is Now Considering Quantitative Easing

Income Mail:

The “Short of the Century” May Last a Little Longer

by Ivan Martchev

I remember how in 2003 the late legendary Barton Biggs, a strategist for Morgan Stanley, proclaimed in one of his Investment Perspectives that 10-year Japanese government bonds (JGBs) were “the short of the century.” Japan had just gone through 10 years of deflation and the 10-year JGB yields had gone from nearly 8% at the time of the all-time high in the Nikkei 225 benchmark index (at near 40,000 in December 1989) to a hair shy of 40 basis points (0.4%) in 2003. The Japanese government bond market did sell off as deflation seemed to be abating and riskier asset classes like stocks were coming out of the 2000-2002 bear market; but the 10-year JGB yield in Japan never decisively crossed the 2% mark and again sank into deflationary territory to make yet another all-time low in January of this year at 20 basis points.

Japanese Ten Year Government Bond Yields Chart

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

“The short of the century” should not take 12 years to work out. Still, if one shorted JGBs in 2003 one probably made some money over the next couple of years; but 2003 was clearly not the all-time low for JGB yields. My point is that these deflationary situations can be very difficult to get out of as the Japanese central bank has been accused repeatedly of doing too little too late to the point that stagnation in Japan has now lasted for over two decades.

We now have a new “short of the century.”  The two bond kings themselves – Bill Gross and Jeffrey Gundlach – have declared that German bunds are the short of the century. I have no doubt that they have made some money as German 10-year bund yields went from a low of 7 basis points on a closing basis a couple of weeks ago to the present lofty level of 37 basis points.

Germany Ten Year Government Bond Yields Chart

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

Gundlach’s point is simple: If you short a bond that is trading at a negative yield – like the German two-year bunds – you can’t really lose: At maturity you are getting paid at par.  So if one leverages the trade at 100X on a bund that at the time was yielding -0.20%, one makes 20% at maturity. Sure, he is using wholesale funding markets for leverage that can carry lower interest rates than what a mortal individual investor can get, so his math works. I don't doubt he can make money in the short-term, or even in a year or two, just like Barton Biggs did with JGBs in 2003, but are bunds really the new “short of the century?”

In institutional markets, as the Gundlach example shows, the leverage can be 100X or higher in some cases so a fraction of a percent yield can be capitalized upon. Such sophisticated trading is not within the reach of the individual investor, nor should it be as 100X leverage is almost an assured road to the poorhouse. One rookie mistake at 100X can wipe out a retail investor.

There are a few ETNs that reflect reflect the performance of JGBs and bunds in the US market, but they raise a different issue. An ETN might walk like a duck (ETF) and quack like a duck/ETF but it is NOT a duck/ETF. It’s an exchange-traded note and as such it is unsecured debt of the issuer. Sure, it performs like the index it tracks, but it is a computer model often full of derivatives that help it do just that. ETFs actually have underlying baskets of stocks or bonds that are real assets, i.e., there is no such “real asset” as an ETN. This is why when Lehman went bust all of its ETNs went to zero!

Granted, the risk of a big ETN issuer going bust is negligible at the moment as the Greenspan-Bernanke-Yellen “put” has never been more ”in-the-money,” since the present central bank leadership does not want to relive another Lehman moment, but the risk is can still there. I have seen ETNs go to zero and I don’t want to see it again. This is why, if given the choice to pick between an ETN and an ETF with similar characteristics, I will always pick the latter.

More Silver-Platter Gifts from the Greeks

What appears to have happened over the past couple of weeks is that the Greeks have folded.

They have run out of money and they have lost the support of their electorate to carry their demands to the point of being forced out of the euro. Realizing that leaving the euro might cost him his job as Prime Minister, Alexis Tsipras removed Finance Minister Varoufakis from the negotiating team with the troika, in effect delivering his political head on a silver platter as a gift to re-start negotiations. Tsipras had been withstanding numerous demands from the other side to replace Varoufakis. Finally yielding to these demands is a form of concession and an indication that Greece is willing to make a deal.

Why should investors care if Greece leaves the euro? Because there is no concrete mechanism for exiting the euro, many financial markets may have to face the unknowable. Theoretically, a euro disintegration scenario could be bigger than another Lehman-sized bank failure. As I am writing this over the weekend, there is no news yet of a finalized Greek deal, even though the Hellenic Republic is clearly running out of time and money. Still, indicators from financial markets did show the Grexit risk premium being priced out.

Euro Dollar Exchange Rate - Monthly OHLC Chart

Source: Barchart.com

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

The euro continues to rebound, gaining about eight cents over the last three weeks of April I have great doubts that the euro can rally past the previous $1.15 to $1.20 area of support, which now should act as resistance.  I think that after this Greek diplomatic overture is over – if there is a last minute deal –I believe the euro may take out the recent low of 1.045 and head back to parity later in 2015 as Europe’s QE keeps on going and the Fed, in my opinion, may be getting prepared to hike interest rates as a symbolic victory over the Great Recession.

There are very few Greek investments available to U.S. investors to play this resolution. The false hope that Greece gave in February caused them to completely unwind their rallies and make new lows in the case of the Global X FTSE Greece 20 ETF (GREK). Still, GREK had been making progress over the past week as Varoufakis was being removed from the negotiating team, and it may make some more progress if a deal is reached. The same is true for National Bank of Greece(NBG).

Fed to Economy: “Mission Accomplished”

Just like George W. Bush found out in his Peter Pan maneuver by landing on an aircraft carrier with a sign “Mission Accomplished,” a sign is not a victory. Right now, in my opinion a symbolic single rate hike seems likely.  (The Federal Reserve may reverse course in 2016, but those are worries for another year.)

Thirty Day Fed Funds - Daily Line Chart

Source: Barchart.com

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

As time has passed, fewer Fed rate hikes have been predicted by the fed funds futures markets. Since fed futures are primarily institutional, the “smart bond trading money” is betting on fewer rate hikes. You can see the forecast for the reduced number of rate hikes by looking at the narrowing differential between December 2015 (black) and December 2016 (green) fed funds futures. (More rate hikes as of the date of the contract means a lower price as those trade at 100 less the expected rate upon contract settlement.)

Since early March, the December 2015 fed fund futures (ZQZ15) contract is showing the probability of one less rate hike by December 2015 by rallying from 99.42 to the Friday close of 99.64 (a 22 bps rise). Typically, the Fed hikes in quarter point increments although it has been known to use 50 bps increments in the past. At the same time, the December 2016 fed funds futures (ZQZ16) have taken away about two quarter-point rate hikes by rallying from 98.55 to 99.05 earlier in April to settle at 98.92 as of last Friday.

So if one was so inclined to trade on the idea that there won’t be four quarter point rate hikes by December 2016, that ZQZ16 futures contract would be the way to express that view. One can make money predicting monetary policy, or one can lose money, as often happens in the markets.

Growth Mail:

Believe it Or Not, April was a Positive Market Month

by Gary Alexander

“The enemy is noise.  By noise, I mean not simply the noise of technology, the noise of money or advertising and promotion, the noise of the media, the noise of miseducation, but the terrible excitement and distraction generated by the crises of modern life…. non-situations that look real, non-questions demanding consideration, opinions, analyses in the press, on the air, expertise, inside dope, factional disagreement, official rhetoric, information – in short, the sounds of the public sphere.”

– Saul Bellow in “There is Simply Too Much to Think About.”

The Friday Wall Street Journal may as well have shouted, “May Day! May Day!” in large print across the top of page 1.  The May 1st WSJ cover showed a volcano exploding in Chile with a big headline beneath it shouting, “Turnaround Rattles Markets: April ends on a bitter note as bets that had worked early in year backfired; Dow takes a tumble.”  My wife looked at Page 1 and asked, “Did the market crash in April?”

“Not really,” I responded. “Thursday was down but the S&P rose 1% in April.” As it turns out, we were reading the Journal over lunch on the West Coast, so the Dow had just scored a 184-point gain on Friday, erasing almost all of Thursday’s 195-point loss.  The major indexes eked out a gain for the full month, so (for fun) I quipped, “Let’s take a look at the fine print and see if the Journal mentions that April was up.”

No such luck.  The page 1 article began, “April proved a cruel month for investors in financial markets, many of whom had bet the U.S. dollar would continue its march higher, oil prices would fall further and the rally in bond markets around the world would gain steam. Instead, the trades that had proven winners in recent months backfired.”  The article went on to mention that the euro rose 4.5% in April after falling 11% in the first quarter. It mentioned Twitter’s collapse (losing 22% in April after gaining 40% in the first quarter), but nowhere in the 24-paragraph page 1 article did the WSJ say the S&P rose 1% in April!

  Most Leading Indexes Rose in April (and Year-to-Date)  
  Source: Bespoke Investment Group, May 1, 2015
  Index     ETF     April     YTD  
  S&P 500 SPY +0.98% +1.42%
  Dow Industrials DIA +0.34% +0.17%
  NASDAQ 100 QQQ +1.92% +4.24%

 

I put down the Journal and sighed, “I bet the ‘sell-in-May-and-go-away’ crowd sold stocks yesterday, right on schedule.” I explained to my incredulous spouse that some investors unload stocks on April 30 since the vast bulk of historical stock market profits have come from November 1 to April 30, so that by selling on April 30, such investors aim to avoid the low-growth half of the year and profit from the best months.

Don’t “Sell in May” (or Go Away)

Based on the S&P 500 and NASDAQ, the “Sell in May” formula hasn’t worked very well in recent years.  Two years ago, our opening headline in MarketMail (for April 29, 2013) was “This Bull Market Has Legs: Don’t ‘Sell in May & Go Away.’”  That may have been good advice.  In the last two years, the S&P 500 has gained an average 8.53% from May 1 to October 31 (the “bad” months), while it has averaged only 5.3% from November 1 to April 30.

NASDAQ’s seasonal shift was more dramatic. After soaring 17.75% from May 1 to October 30, 2013, NASDAQ rose less than 5% from November 1, 2013 to April 30, 2014.  The same trend happened in the next year, with NASDAQ rising 12.55% from May 1 to October 31, 2014, then +6.7% to April 30, 2015, so NASDAQ has averaged a 15.2% gain in the warmer months vs. just 5.8% gains in the colder months:

  Source: Yahoo Finance
  Six Months Ending     S&P 500     NASDAQ  
  October 31, 2013 +9.95% 17.75%
  April 30, 2014 +7.25% +4.97%
  October 31, 2014 +7.12% 12.55%
  April 30, 2015 +3.34% +6.71%

 

In my opinion, the “sell in May” theory has another potentially major flaw. Most summer months have been relatively strong. Over the last 100 years, according to the “2015 Bespoke Market Calendar,” the summer months are positive:

  Summer is Historically Positive in the Last 100 Years  
  Source: 2015 Bespoke Market Calendar
  Month     Average gain     Rank  
  June +0.41% #8
  July +1.51% #1
  August +0.91% #5

 

Although May ranks #11 (of 12 months) in the last 100 years, it averages a barely positive +0.01%, with most of May’s gains coming in the final week of the month. According to Bespoke, the first 24 days of May have been negative in the last 20 years, while the last week (May 25-31) has delivered a turnaround near the Memorial Day weekend and the traditional beginning of summer. In the last 10 years, May 1-24 has delivered an average 1.25% loss in the S&P 500, while the final week of May averaged a 1.06% gain.

Is “Sell in May” is a crapshoot at best?  For taxable accounts, such sales could cause onerous paperwork and a steep capital gains tax tariff; but even for tax-sheltered accounts, there is no guarantee that stocks will fall in the fall. (I believe most Octobers are harmless.)  Human nature is the enemy of market timing.  We tend to resist buying stocks back at higher levels than we sold them, so timers tend to remain on the sidelines.

In short, markets always carry risk, especially late in a bull market and in historically weak months like May or September, but that only means that wise investors keep an eye out for relative value –focus on strong fundamentals in stock selection – a discipline which Louis Navellier and his associates have been practicing for decades.

A Review of Buffett’s “Woodstock for Capitalists”

A good antidote for the “Sell in May” phobia is “Woodstock for Capitalists,” the whimsical name for the annual meeting of Berkshire-Hathaway, run by Warren Buffett in Omaha.  Lucky attendees get to take part in a newspaper throwing contest with Buffett, who tossed 500,000 papers in his youth (and now owns dozens of them).  At 6:20 am Saturday morning, early risers got to see Norman and Jake, two Texas Longhorns, parade down 10th Street to the CenturyLink to the annual meeting, which starts at 7:00 am.

At Navellier, we don’t necessarily advocate buying Berkshire Hathaway, which is like a closed-end fund for Buffett’s wholly-owned companies; but  his recent takeovers of stocks once held in our portfolios, like Kraft (KRFT) *and Heinz (HNZ), or Lubrizol and Burlington Northern.  We also honor Mr. Buffett, 85, and his partner Charlie Munger, now 91, for their positive bullish spirit and their 50 years of superior profits.  Anyone who says that money managers can’t beat the market should look at Buffett’s track record.

Buffett wrote in his annual report that since he took over Berkshire 50 years ago, “the purchasing power of the dollar declined a staggering 87%.  That decrease means that it now takes $1 to buy what could be bought for 13 cents in 1965.  There is an important message for investors in that disparate performance between stocks and dollars…. The unconventional, but inescapable, conclusion to be drawn from the past 50 years is that it has been far safer to invest in a diversified collection of American businesses than to invest in securities – Treasuries, for example – whose values have been tied to American currency.”

Buffett explains the tradeoff like this: “Stock prices will always be far more volatile than cash-equivalent holdings.  Over the long term, however, currency-denominated instruments are riskier investments – far riskier investments – than widely diversified stock portfolios that are bought over time and that are owned in a manner involving only token fees and commissions.  That lesson has not customarily been taught in business schools, where volatility is almost universally used as a proxy for risk.”  Buffett then inveighs against “active trading, attempts to time market movements, inadequate diversification,” and borrowed money, concluding his diatribe by saying “market forecasters will fill your ear but [not] your wallet.”

Don’t Bet Against America – Even in Tough Times

I love reading Buffett’s positive vision of America.  Elsewhere in his 2015 Berkshire Hathaway annual report, Buffett describes a big acquisition his company made in 2009 “amidst the gloom of the Great Recession.”  He said, “I have always considered a ‘bet’ on ever-rising U.S. prosperity to be very close to a sure thing. Indeed, who has ever benefited during the past 238 years by betting against America?”

I’ll go even further back. Last week, I talked about the dismal conditions 100 years ago in World War I, as the Lusitania was sunk (100 years ago this week).  I also mentioned dismal conditions 50 and 75 years ago.  I made these points to demonstrate the powerful growth in the stock market over the last 50, 75, and 100 years. If you go back even further, you can see that America has overcome a lot more risk than now faces timid investors who quail in front of every scary story the Wall Street Journal or CNBC can muster.

  • In May 1765, the British started quartering troops on American private property. Permission to do so was granted by Parliament on March 25, 1765, and the first Quartering Act was given Royal Assent on May 15, 1765.  Quartering – which basically mandated feeding and housing soldiers –led to a specific grievance in the Declaration of Independence and the Third Amendment to the Constitution.  As if quartering troops weren’t enough to sour America on Britain, the hated Stamp Acts were passed later in 1765.  Still, it took another 25 years to give birth to this great nation.
  • In May 1815, two centuries ago, Andrew Jackson had won the Battle of New Orleans on January 8, but news traveled so slowly that sea battles raged between Britain and America until March 23, when Britain had to turn its attention to a more urgent matter.  Napoleon escaped from his island exile in February and was back in power by March, raising an army in just 100 days, leading to his Waterloo in June.  Then came peace….right? Not exactly. A more important event happened on April 10, 1815 in Indonesia when Mount Tambora exploded in the worst volcanic explosion of the last 750 years. Tambora’s ashes led directly to Europe’s “year without summer” in 1816, and to snow in America in June. Tambora’s ashes led indirectly to cholera epidemics, the starvation of millions when crops failed, and then America’s first serious Depression in 1819, lasting years.
  • In May 1865, the Civil War was over, but the Union’s victory was short-lived when President Abraham Lincoln was killed on April 14 by John Wilkes Booth, who was hunted down, caught, and killed on April 27.  (Confederate President Jefferson Davis wasn’t captured until May 22.)  The Civil War killed 620,000, over 2% of the U.S. population, equivalent to seven million deaths today – a Vietnam Wall running miles in length. Booth was a southern sympathizer, but his act destroyed the South’s hope for recovery. Lincoln’s death led to a brutal period of Reconstruction, which likely would have been far less oppressive under a President who had said that he bore “malice to none, charity to all” in his last Inaugural Address, uttered just 40 days before his death.

Each of these three episodes came at the end of a long war (the French & Indian War, ending in 1763;, the Napoleonic wars; and the Civil War); but in each case postwar challenges continued for a decade or more.

That’s why Warren Buffett said in his 2015 annual report that, “If you compare our country’s present condition to that existing in 1776, you have to rub your eyes in wonder. In my lifetime alone, real per-capital U.S. output has sextupled. My parents could not have dreamed in 1930 of the world their son would see. Though the preachers of pessimism prattle endlessly about America’s problems, I’ve never seen one who wishes to emigrate (though I can think of a few for whom I would happily buy a one way ticket).  The dynamism embedded in our market economy will continue to work its magic. Gains won’t come in a smooth or uninterrupted manner; they never have.  And we will regularly grumble about our government, but most assuredly, America’s best days lie ahead.” And that’s bullish for the stock market.

Stat of the Week:

First-Quarter GDP Rose Only 0.2%

by Louis Navellier

The biggest economic news last week happened on Wednesday, when the Commerce Department announced that its preliminary estimate for first-quarter GDP was only 0.2% (annual rate), substantially below economists’ consensus estimate of 1%.  Lackluster business investment, slower-than-expected consumer spending, lower-than-expected construction from a severe winter, and a cautious energy sector all contributed to suppressing first-quarter GDP growth.  Interestingly, inventory growth contributed 0.7% to overall first-quarter GDP growth, so excluding rising inventories, first-quarter GDP growth fell 0.5%!

Co-incidentally, the GDP announcement came out during the Fed’s Federal Open Market Committee (FOMC) meeting, so the FOMC had yet another good excuse to postpone raising key interest rates.

Speaking of the Fed, the official FOMC statement on Wednesday said that economic growth “slowed” due in part to “transitory factors” (i.e., winter weather, port closures, and other short-term concerns).  Furthermore, the FOMC said, “Although growth in output and employment slowed during the first quarter, the committee continues to expect that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the committee judges consistent with its dual mandate.”  Translated from Fedspeak, the FOMC essentially blamed the weather for slower GDP growth and hopes that the U.S. economy might get back to normal.  So overall, whether the Fed blames the weather, the strong U.S. dollar for suppressing exports, the energy patch slowdown, the faltering job market, or all of the above, the fact of the matter is that I don’t believe the Fed will be raising key interest rates anytime soon, so the Fed’s 0% interest rate policy will continue.

Consumer Confidence Surveys Send out Conflicting Answers

The other news on Wednesday was that the Conference Board announced that consumer confidence fell to 95.2 in April, down from 101.4 in March. This sudden decline was due to worries about the job market, higher housing costs, and the fact that consumers’ “present situation” has not improved noticeably.  Since consumer spending is now the primary driver of GDP growth, due to faltering business investment and lackluster trade, it is imperative that consumers cheer up; otherwise GDP growth will continue to sputter.

Well, consumers apparently cheered up by Friday, when the University of Michigan announced that its consumer confidence index rose to 95.9 in April, up from 93 in March.  (Clearly the Conference Board and the University of Michigan must be surveying different consumers or asking different questions!)

The contradiction in these consumer sentiment surveys may be explained by different sectors of the job market. For example, the Institute of Supply Management (ISM) announced on Friday that its manufacturing index was unchanged in April and remained at 51.5, due largely to the fact that the ISM employment component declined to 48.3 in April, down from 50 in March.  In March, manufacturers scaled back their employment to the lowest level since September 2009, which is not a good sign.

Most of these layoffs appear to be in the energy and mining sectors, since ISM reported that 15 of the 18 industries it surveyed reported growth, up from only 10 industries in March.  So overall, outside of energy and mining, manufacturing activity remains healthy and energy jobs could return if oil prices stabilize.

Even China is Now Considering Quantitative Easing

Last Tuesday, The Wall Street Journal reported that China’s central bank signaled that it is “planning to launch its own version of innovative credit-easing adopted by its counterparts in developed countries.”  Specifically, the WSJ said that the People’s Bank of China would allow Chinese banks to swap local-government bailout bonds for loans as a way to bolster liquidity and boost lending.  This strategy, called Pledged Supplementary Lending, is similar to the long-term refinancing operations used by the European Central Bank right before it embarked on full quantitative easing.  China has mounting local government debts, so it appears that its Finance Ministry is going to help reduce the interest rate burden on local governments by allowing them to sell new bonds with government guarantees.

In a statement on Tuesday, China’s Finance Ministry urged local governments to “speed up debt issuance and scheduling, rationally set debt-issuance times and urgently complete the work of issuing bonds.”

On Friday, China’s National Bureau of Statistics said that its official purchasing managers index (PMI) remained at 50.1 in April, the same reading as March.  The good news is that China’s official PMI was above economists’ consensus estimate of 50.  Since any reading above 50 signals an expansion, China’s manufacturing sector is still expanding.  Within the PMI components, new orders remain unchanged at 50.2, while production rose to 52.6, up from 52.1 in March.  China’s National Bureau of Statistics on Friday also released its nonmanufacturing PMI measuring the service sector, which slipped to 53.4 in April, down slightly from 53.7 in March.  So overall, China is still growing, but apparently at a bit slower pace.


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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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