Market Passes First Test

The Market Passes its First Test of the October 11-12 Lows

by Louis Navellier

October 23, 2018

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On Friday, the Russell 2000 essentially retested its October 12th intraday low on light trading volume. The NASDAQ Composite might also retest its October 12th intraday in the upcoming days, but again, as long as trading volume remains light, we should not worry – as long as there is no panic selling. Although the broader stock market may still try to retest its intraday lows, companies like Netflix, which have already announced better-than-expected third-quarter results, are not expected to retest their recent lows.

The selling pressure from index funds during the first few trading days in October is largely to blame for the recent market chaos. Specifically, the arbitrage folks were selling the Russell 2000 and buying the S&P 500, which temporarily caused small capitalization stocks to falter. However, despite Friday’s retest for the Russell 2000, I want to assure investors that small capitalization stocks can also “melt up” in the upcoming weeks as wave after wave of positive third-quarter earnings and sales results are announced.

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In This Issue

Bryan Perry says the economy and the Fed are sending mixed signals, so the market seems a bit manic-depressive this October, but clarity should emerge after the elections. Gary Alexander agrees that we have to endure the tension of the next two weeks, especially the fear generated by the press coverage of the market’s inevitable down days. Ivan Martchev has some of the brightest news this week, the relatively small spread between junk bonds and Treasuries, indicating a relatively strong economy. Jason Bodner returns from a doom-and-gloom conference in Bermuda with some tonic for what ails the pessimists – a long check list of what’s going right. Then I’ll conclude with a short wrap-up of the economic outlook.

Income Mail:
Bigtime Mixed Signals Stoke Market Volatility
by Bryan Perry
Mr. Market is not Diggin’ the Fed’s Forward Plan

Growth Mail:
The Press Loves Market Down Days but Ignores Up Days
by Gary Alexander
GDP, Stocks, or Earnings Could Tip the Election

Global Mail:
Junk Bonds Say It’s Too Early to Fret
by Ivan Martchev
What are Emerging Markets’ Bonds Saying?

Sector Spotlight:
The Left and Right Agree – We’re Doomed
by Jason Bodner
October Has Been Ugly for All Sectors (Except Two)

A Look Ahead:
President Trump “Jawbones” the Fed About Raising Rates
by Louis Navellier
The Economic News is Mostly Negative – Arguing for Caution in Raising Rates

Income Mail:

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

Bigtime Mixed Signals Stoke Market Volatility

by Bryan Perry

This past week was a true headscratcher for those trying to make sense out of today’s investing landscape. Mixed signals and dramatic sector rotations defied the normal course of events in what the Fed deemed a robust economy, in which higher interest rates would be warranted – at least in their collective view.

Following a sharp decline during the second week of October, the S&P 500 finished last week nearly flat (+0.02%), leaving its October loss at 5.0% (so far). The third-quarter earnings season kicked off on the day of this month’s intra-day low (October 12), with the nation’s leading mega-banks mostly reporting better-than-expected profits, helping to boost the S&P financial sector 0.8% higher. Meanwhile, the health care sector rallied 0.5% after Dow components Johnson & Johnson and UnitedHealth Group beat earnings estimates, while issuing above-consensus guidance. (I have no position in JNJ or UNH.)

The chart below shows the Financial Select Sector SPDR ETF (XLF) in green overlaid with a graph of the 2-year Treasury (TNX) in blue. There is a real disparity in this picture. While the yield on the 2-year has risen to 2.91% as of last Friday, the share price of XLF is trading within a point of its 52-week low. Bank stocks have historically rallied with short-term interest rate increases as net interest margin expands, resulting in higher profits. The lack of a correlation suggests that loan growth will slow going forward.

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While the latest FOMC minutes, released a week ago, reveal that the Fed is inclined to raise interest rates again in December and into 2019, there seems to be a growing disconnect with the economic data and the Fed’s dot plot schedule. Because interest rates have moved higher, 30-year mortgage rates are now hovering around 5%. That would explain the 5.3% decline in housing starts and a 3.4% decline in existing home sales in September. Also, retail sales rose only 0.1% last month, well below the 0.6% consensus.

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So, if purchases of housing, autos, and general retail are pulling back, why are bond yields ticking higher and the Fed seems dead set on another rate hike in December? Well, on the flip side of the economic calendar, the Conference Board's Leading Economic Index increased 0.5% in September after increasing an unrevised 0.4% in August. Only two of the 10 leading indicators failed to rise in September – the average workweek for manufacturing production workers and building permits.

It is important to note that in the six-month period ending in September, the Leading Economic Index rose 2.8% vs. 4.1% in the previous six months. The key takeaway from the report is that there was widespread strength in the 10 leading indicators. The strongest contribution came from average consumer expectations for business conditions, which should be constructive for consumer spending activity.

I can only surmise that the Fed is paying considerably more attention to the LEI and sees the current slowdown in housing, autos, and retail spending as only temporary. If and when evidence of a pickup comes, bank profits will widen and shares of XLF will get a lift and re-correlate with the 2-year T-Note. There is no question the economy has begun to moderate. The jury is out as to what pace it can sustain from here. I think this is what has a number of market sectors and many leading stocks trading erratically.

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Speaking of erratic, the information technology sector trailed the broader market this past week, losing 1.2%. Chipmakers were relatively weak, with the Philadelphia Semiconductor Index falling 2.2%. The bigger impact was on the high-growth tech stocks that typically reinvest all income from sales back into the business and thus show little if any earnings. Stocks in the cloud, enterprise data, cyber security, data, AI, IoT, SaaS, and subscriber-based software models all underwent severe selling.

Mr. Market is not Diggin’ the Fed’s Forward Plan

The minutes from the September FOMC meeting showed that officials generally agreed on the need for more gradual rate hikes. In addition, the minutes revealed that a number of officials saw the need to hike rates above expected levels over the long run. This latter statement seems to have gotten the market into a lather. U.S. Treasuries slipped last week, pushing yields higher. Yield on the benchmark 10-year T-Note climbed three basis points to 3.20% and the U.S. Dollar Index advanced 0.6% to 95.46.

As for the 11 S&P 500 sectors, they finished the week pretty evenly mixed between green and red. Defensive groups like consumer staples (+4.3%), utilities (+3.1%), and real estate (+3.2%) were the top performers, while growth-sensitive groups like consumer discretionary (-2.0%), energy (-1.9%), and materials (-1.4%) finished at the bottom of the sector standings. The conundrum here is obvious. If the Fed is so confident in the domestic economic outlook, why are utilities, telcos, staples, and real estate trading up with bond yields on the rise, and why are sectors leveraged to a strong economy trading off?

There is a major disconnect here and Jerome Powell & Co. should be paying attention to the radical rotational shift the market is undergoing. Mr. Market is showing concern that a determined Fed will overshoot and should rather adopt a more wait-and-see approach before committing to tighter fiscal policy. The fourth quarter will be quite telling in that consumers will show how confident they are through holiday shopping data. The housing and mortgage markets will reveal whether they have adjusted to the recent pop in yields, and year-end stock performance will have a vote on corroborating Fed policy.

Growth Mail:

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

The Press Loves Market Down Days but Ignores Up Days

by Gary Alexander

The S&P 500 ended September at 2913.98 and set a high of 2925.51 on Wednesday, October 3. It fell 6.7% in the next week, closing at 2728.36 on October 11. Last Friday’s close was 2767.78, down 5% for the month-to-date and +3.5% year-to-date, but the press coverage of up and down days is wildly different.

Julia Seymour of the Media Research Center studied the mainstream media coverage of the market this month and said, “The network evening news shows focused on the ‘major selloff’ and ‘meltdown’ on Oct. 10 and 11 and ignored a record high on Oct. 3, as well as a 500-plus point gain on Oct. 16.” When the Dow set its 15th record high of 2018 on October 3, “all three broadcasts were silent about the good news.”

From January 1, 2017 to January 26, 2018, according to Marketwatch.com, there were 82 record highs in the Dow Jones Industrials. According to the Seymour and MRC media, one or more of the three major media news outlets (ABC World News Tonight, CBS Evening News, and NBC Nightly News) reported only 20 of those 82 highs, but when the Dow fell 666 points on February 2, 2018, the Big 3 gave 33% more coverage to a single day’s drop than to the times the Dow broke through 25,000 and 26,000.

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Economist Ed Yardeni has counted 62 panic attacks since the start of this bull market on March 9, 2009. Only three of those 62 attacks have happened during 2018, one in February (over “wage inflation fears”), another in March (over “trade war talks”), and one this month (tentatively over “global growth slowdown fears”). There were only two panic attacks in 2017 – in May (a “Trump impeachment scare”) and August (“North Korean crisis”). All 57 of the other market scares came during the 8-year Obama administration.

Measuring from election days in 2008 and 2016, the Dow rose 90.5% in the eight Obama years (+8.3% per year compounded) and it’s up 38.6% (17.5% per year) in the near-two years since Trump was elected, yet the media seems fixated on the story of an Obama bull market and a coming Trump crash, an Obama recovery and a coming Trump recession. Now, with elections around the corner, we see talk of a market crash if the Democrats take control of Congress, or a debt crisis if the Republicans retain their control.

Right now, the smart money (and most polls) predict that the Senate will remain narrowly in Republican hands while the House of Representatives will likely switch from Republican to Democratic control. We don’t know for certain this will happen – polls failed us twice in 2016 with “Brexit” and Trump – but if the House comes under Democratic control, the division in our nation may become even worse than now.

GDP, Stocks, or Earnings Could Tip the Election

The Bureau of Economic Analysis (BEA) releases its first advance estimate for third-quarter gross domestic product (GDP) this Friday morning at 8:30am Eastern time, just 11 days before the election. Economists expect a slowdown to 3.3% from the previous quarter’s 4.2%, partly as a result of the new tariffs imposed last quarter. As of last Friday, the Atlanta Fed’s GDPNow model indicates a third-quarter GDP growth of 3.9%, on the verge of 4% but not quite there. A reading next Friday near 3% might oddly sound like a “slowdown,” even though it will still make 2018’s growth rate the strongest year since 2004.

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Thankfully, the next meeting of the Federal Open Market Committee (FOMC) will be November 7-8, just after the election, so the President won’t have to worry about a rate increase right before election day. On election day, I’ll be flying home from the New Orleans Investment Conference after moderating our annual political panel, featuring Jonah Goldberg, Mark Steyn, and Doug Casey. I’m sure there will be fear and trembling over House leadership flipping to Democrats, with Nancy Pelosi replacing Paul Ryan as Speaker of the House. A chill will fill the room at the prospect of Maxine Waters chairing Financial Services, or Adam Schiff ousting pro-Trump Devin Nunes on the Intelligence committee, since Schiff has a drawer full of subpoenas ready to slap on the Trump team. If the Democrats win control of the House, they could slow the gears of government to a halt, making it all about Trump’s errors and not about laws.

But there’s a positive side to that outcome! The Senate will continue to block any counter-productive moves by the House. Congress cannot repeal the tax cuts and deregulation already passed. Growth may slow, but gridlock in Washington is often a good thing, as past examples have shown: Ronald Reagan with a Democratic Congress (1980-88), or Bill Clinton with a Republican Congress (1994-2000).

My prediction is a market surge if the Republicans retain control of Congress, and a temporary market correction if the Democrats take control of the House – followed by a recovery in 2019, when the truth sinks in that “gridlock” in Washington is a proven historical formula for above-average market profits.

In the meantime, the markets will move more on earnings than politics, and the market will be in the heart of earnings season on Tuesday, November 6. In the first and second quarters of 2018, S&P 500 operating earnings were up 25.9% and 25.3%, respectively. Profit margins were at a new record high 12.3% in Q2.

Analysts are expecting another excellent quarter – not quite 25% (that would be too lucky), but third-quarter year-over-year profit growth should be 21% to 24%. For all of 2018, profit growth is expected to be +23%. That can’t continue in 2019, for a variety of reasons, but with the S&P 500 up only 3.5% ytd, stocks have some room to grow. Even if 2019 profit growth falls to 10%, stocks still have room to grow.

Global Mail:

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

Junk Bonds Say It’s Too Early to Fret

by Ivan Martchev

Because of the below-normal volatility in stocks over the past five years, save for sharp corrections that were few and far between, the recent sell-off in the S&P 500 from 2940 to 2710 has generated the usual worried calls from clients wondering if “the top is in.” My answer is that it would be very unusual for the stock market to weaken further in a good earnings environment in the seasonally strong time of the year.

As to why the S&P 500 dropped so fast, there are several factors I discussed here previously, but suffice to say such a percentage move in the month of October 20 years ago would have been viewed as normal.

When the stock market gives us mixed signals, it is usually a good idea to look at other asset classes to get a better read on the situation. The bond market is much more “rational,” for lack of a better word, and much more sensitive to the performance of the U.S. economy, while stocks have historically been more erratic in such situations. One part of the bond market that has a heavy correlation with the stock market is junk bonds, or anything rated BB or lower by S&P. If junk bonds are doing well and stocks are under pressure, that’s a good indication that the weakness in stocks is transitory.

Years ago, a veteran bond trader explained the junk bond market this way: “It reads like a bond but trades like a stock,” meaning that lower-rated bonds have higher volatility compared to Treasuries.

While Treasuries have been under pressure due to the Federal Reserve quantitative tightening cycle, we have had a flattening yield curve, which in the past month or so has steepened marginally, but it's not the absolute level of yield that matters in the bond market but the relative yield. In other words, the spread.

Narrowing spreads between junk bonds and Treasuries, even if Treasury yields are rising, is considered a sign of a strong economy. A strong economy tends to produce a strong stock market, as has been evidenced by the strong earnings growth in the first and second quarters, which is expected to continue in the third quarter. The stock market does not have to follow strong earnings performance by the S&P 500 companies immediately, but over time it typically follows it, despite any delays.

So, what are junk bonds telling us now?

When it comes to junk bond indexes, BB indexes show us the highest-quality junk, where CCC or lower indexes show us the performance of the junkiest of junk bonds. BB spreads have stopped going down and are more or less going sideways since narrowing by more than half since early 2016. At 2.34% the BB spread index to Treasuries is considered low – an indicator of a strong economy.

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The junkiest of junk, CCC or lower-rated bonds, actually show a narrowing of spreads in 2018. For most of 2017, CCC bonds had spreads to Treasurys in the 8% to 9% range. At 7.05%, junkier junk bonds show a strong economy that has gotten stronger. In 2018, we have been as low as 6.59% in late September. Despite a marginal widening, CCC spreads around 7% are considered a sign of a strong economy.

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The narrowing of credit spreads in riskier bonds is a direct consequence of the fiscal stimulus introduced by the Trump administration in the form of a tax cut at the end of 2017. While philosophically such fiscal stimulus should have come if the economy were to be weaker (like during a recession) in order to help it recover, such longer-term considerations do not appear to be the priority of the present administration.

What are Emerging Markets’ Bonds Saying?

Unlike the U.S., spreads are widening in high-yield bonds in emerging markets. In the aggregate, it is not huge, as it comes from an extremely depressed level and it would be considered normal in a Federal Reserve tightening cycle and a general outflow of capital from emerging market stocks and bonds.

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The situation is significantly more gruesome in some individual cases where local “risk-free” government bond markets are under significant pressure, causing significant pressure in the whole financial system, not just for junk borrowers. Turkey’s 10-year government bond closed on Friday with a yield of 18%.

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Turkey also has an inverted yield curve, where the policy rate is set at 24% and the Turkish 2-year note closed at 24.46%. An inverted yield curve is a sign of trouble and indication that many market participants are worried that Turkey may default on its obligations.

As a general observation, signs of stress in the U.S. bond market are low and decreasing while signs of stress in emerging market bonds are rising (from a low base) but materially so in some cases, namely in Argentina and Turkey. I think this dynamic will persist in 2019, when more bad news from emerging markets should be forthcoming, courtesy of their rampant dollar borrowing in the previous decade based on the erroneous assumption that U.S. interest rates would stay low and not materially rise.

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

Sector Spotlight:

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

The Left and Right Agree – We’re Doomed

by Jason Bodner

I wanted to say that “I am writing this to you from Bermuda,” but I can’t.

I had the honor of presenting at an investment conference on that beautiful and remote island this past week. I wanted to write from there, but I was just too busy, so I spent all my time speaking and listening. There were so many ideas rocketing around that I didn’t want to miss anything. I wrote this from home.

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This crowd was clearly right-leaning, politically. There were many conservatives, so it was fascinating to see that their overwhelming collective view was pessimistic, creating a pall of gloom and doom. There was a lot of emphasis placed on our ballooning unpayable debt. There was relentless talk of the deep personal violations that all Americans suffer at the hands of the big social media giants, which offer free services and then they yank our personal data from under us to use to sell to us a variety of products.

There were tales of how cryptocurrency will be the last free means of exchange once the fiat currencies fall and burn. There was talk of an overheated stock market with an utter disregard for debt. Speaker after speaker said we are due for some sort of cataclysmic type of event that would mirror or even upstage the Great Depression. A Wall Street event would trip the trigger. One guy, whom I highly respect, knows someone who builds bunkers for the super-rich. He is so busy he doesn’t know what to do.

In short, the world is a ticking time bomb.

After the conference, I wanted to look at “the other side” to get some balance. I have a lot of friends and family who lean leftward, but I got no relief there. More bad news; no cheer there, either. The prevailing theme: Trump is a fascist. Our modern society of demonizing the press is like early Nazi Germany. The systematic deconstruction of socially responsible laws and programs of the Obama era is soul-crushing. Women, immigrants, non-whites, non-heterosexuals, and everyone getting brainwashed are among the victims. The health system is broken, and Wall Street is a greed machine that will tip us over the edge.

The two things both sides unanimously agree on? The world is going to end, and Wall Street will signal that end. The fat cats will nudge us just far enough over the horizon that there will be no coming back.

Contrary to what my parents said, looking right and looking left is not going to help me cross the street.

Being interested in science, I Googled the “effects of negativity.” This is what I learned:

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The Left is negative. The Right is negative. The stock market is currently ugly and pessimistic. Don’t count on the news to uplift your spirit, either. So, are we really doomed?

Now is a good time to meet Dr. Masaru Emoto. He thought that human consciousness can affect the outcomes for non-emotional objects. He analyzed two batches of water crystals, one talked to lovingly, and one yelled at negatively. He concluded that downer vibes had ill-effects, even on water crystals.

His experiment was independently repeated with rice. Basically, rice flourished when talked to positively, and rice rotted when talked to negatively after a month. This experiment is lauded by believers and loathed by skeptics and debunkers, but the talk certainly had an effect on the talkers as well as the rice.

True or not, it’s not healthy to be negative! I want to be happy and positive! So, I’m going to shower you with bold statements of bloom: The world isn’t going to end! If we work together, there’s no better force at solving problems. Wall Street is a good way to make money, and stocks are going to go up!

Recent actions may not make you feel that way, so let’s look at the market for a moment. This past week started weak, then Tuesday rolled around. It was a screamer. All sectors saw a major rally. Thursday began the retest we have been talking about. The Russell 2000 tested the lows on Friday but not on big volume. The ratio I look at that tracks unusual institutional buying and selling says that we are days away from a trough before a significant recovery. In short, the bottom is either here or near.

October Has Been Ugly for All Sectors (Except Two)

Sector-wise, October has stunk so far, for every sector save Utilities and Consumer Staples. But much of the gains for those came on Tuesday and Friday of last week. October has just been ugly for stocks.

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The good news is that earnings season is here. Last week showed big beats, and I expect to see a lot more.

At the Bermuda conference, where negativity was everywhere, I realized that fear is very popular in the publishing world – fear sells better than greed, both of which sell infinitely better than logic.

Yet logic on my part continues to say:

• Record low taxes have not fully worked their way through to the bottom lines of U.S. companies.
• Record cash repatriation continues.
• Record buy-backs persist - $721 billion through September: +88% YOY according to Goldman Sachs. We will likely have $1 trillion of U.S. stock buy-backs for all of 2018.
• This will be the third consecutive quarter of +10% sales-growth and +24% (expected) earnings-growth on the S&P 500. The S&P 600 should have +34% earnings growth.
• Jobless rates are at 49-year lows.
• There are 7.1 million jobs available with not enough bodies to fill them.
• People are worried about rates ticking up. Who in their right mind would pull money out of double-digit sales and earnings growth equities to chase ~3.25% on 10-year Treasury bonds?
• Where else is there to invest? China, Europe, and Latin America are all a mess.
• Interest rates are still historically low. They are only more favorable compared to recent history.

I am bullish on U.S. equities for likely another six years. In Bermuda, I shocked some attendees by being positive – like Michael Jordan – and by giving them some “Michael Jordan stocks” for their portfolios.

Be like Mike: “Always turn a negative situation into a positive situation.”

A Look Ahead

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

President Trump “Jawbones” the Fed About Raising Rates

by Louis Navellier

President Trump has not let up on his criticism of U.S. monetary policy. On Tuesday, he called the Fed “my biggest threat.”  Specifically, in an interview on Fox Business, Trump said that “the Fed is raising rates too fast.” Although he said the Fed is “independent, so I don’t speak to him,” referring to Fed Chair Jerome Powell, he added, “I’m not happy with what he’s doing because it’s going too fast. Because…you look at the last inflation numbers, they’re very low.”  Clearly, President Trump is trying to make the Fed carefully think about raising rates at its December Federal Open Market Committee (FOMC) meeting.

The latest FOMC minutes were released on Wednesday and these minutes revealed that the Fed was inclined to raise rates again in December. However, due to President Trump’s intense and relentless pressure, there is no doubt that if the FOMC raises rates then, it will have to provide multiple reasons why it is doing so yet again when (1) retail sales have softened, (2) housing sales continue to decline, and (3) inflationary pressure is moderating. The best excuse for the Fed to raise short-term rates further is if long-term bond rates are still rising then, especially Treasury yields, so if the Treasury yields moderate, then I expect that the Fed may postpone its next rate hike. However, for now, a December increase is likely.

The Economic News is Mostly Negative – Arguing for Caution in Raising Rates

President Trump has a point. The Commerce Department announced last week that retail sales rose only 0.1% in September, substantially below economists’ consensus estimate of 0.6%. Excluding vehicle sales, retail sales actually declined 0.1%, making it the weakest month since May 2017. Furthermore, August retail sales were revised down to a 0.2% increase (from 0.3% previously estimated). Excluding vehicle sales and gas stations, retail sales were unchanged in both August and September.

On-line sales rose 1.1% in September, but I suspect that the Commerce Department is underestimating Internet sales, so do not be surprised if there is an upward revision next month. Overall, the September retail sales report is another reason the Fed should proceed cautiously before raising interest rates further.

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The Federal Reserve reported on Tuesday that industrial production rose 0.3% in September, much better than the economists’ consensus estimate of a 0.1% increase. The components of the report were especially impressive, such as a 0.5% increase in mining (which includes crude oil production) and a 1.7% increase in vehicle production. Overall, the September industrial production report was positive.

On the negative side, the Commerce Department announced on Wednesday that housing starts declined 5.3% in September to an annual pace of 1.201 million, slightly below economists’ consensus estimate of 1.208 million, while new building permits in September are running at an annual pace of 1.241 million.

Clearly, the highest mortgage rates in almost eight years, plus higher median home prices, have made home affordability more problematic. In the past 12 months, housing starts and new building permits are running 3.7% and 1% lower, respectively. This is yet another reason for the Fed to remain cautious.

Speaking of the housing market, the National Association of Realtors on Friday announced that existing home sales declined 3.4% in September to an annual rate of 5.15 million, the slowest pace in almost three years (since November 2015). This was a big disappointment, since economists were expecting existing home sales to come in at a rate of 5.27 million. In the past 12 months, existing home sales have declined 4.1% as higher mortgage rates and affordability issues have risen. The median home price has risen 4.2% in the past 12 months to $258,100. The annual rate of home appreciation is now running at the slowest pace in 11 months, so a soft landing in median home prices may have been successfully engineered. The real question is, now that inflation related to home prices is cooling, has the Fed already done enough? 

Finally, the Conference Board announced on Friday that its Leading Economic Index (LEI) rose 0.5% in September, in-line with economists’ consensus expectations. Ataman Ozyildirim, the director and global chairman at the Conference Board, said this suggests “the US. business cycle remains on a strong growth trajectory heading into 2019,” but then added, “However, the LEI’s growth has slowed somewhat in recent months, suggesting the economy may be facing capacity constraints and increasingly tight labor markets.”

Ozyildirim noted that annual GDP growth could exceed 3.5% in the second half of 2018, but said, “Unless the momentum in housing, orders and stock prices accelerates, that pace is unlikely to be sustained in 2019.”  In other words, the housing market slowdown is expected to start to slow overall GDP growth.


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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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