“Melting Up”

Small Stocks are “Melting Up” in May

by Louis Navellier

May 22, 2018

As the first-quarter earnings announcements wind down, the announcement of new dividend increases, stock buy-backs and new acquisitions have put a strong foundation under many stocks. In addition, the amount of stock outstanding continues to shrink, so there are fewer shares to buy. The main switch in allocations over the last month has been caused by a resurging U.S. dollar, which is causing many institutional investors to cut their allocations in multinational stocks as they focus on domestic stocks. As a result, the small-cap Russell 2000 has risen by 5% so far in May vs. just 2.4% for the S&P 500.

Goldfish Image

The 10-year Treasury bond has risen decisively above the 3% level to the highest yield in seven years. However, thanks to strong buy-back activity and positive analyst community reports, there is persistent institutional buying pressure, so every dip should be viewed as a buying opportunity. Since computers and algorithms tend to sell without thinking, this opens up plenty of buying opportunities most weeks.

In This Issue

Bryan Perry examines the likely market impact of a new trifecta of economic concerns: a rising dollar, spiking oil prices, and rising interest rates. Gary Alexander examines the latest data to expose another false alarm in the recent concern over “peak earnings. Ivan Martchev examines the recent decline in gold and silver prices in light of a rising U.S. dollar and gold buying in China and Russia. Jason Bodner focuses on the once-weak, now-strong Energy sector. In the end, I’ll also look at the energy fundamentals, along with hopeful signs for 2nd and 3rd quarter GDP growth based on the Leading Indicators and other data.

Income Mail:
Strapping in for the Summer Stock Market
by Bryan Perry
A Trifecta of Macroeconomic Headwinds

Growth Mail:
The “Peak Earnings” Scare May be as Bogus as “Peak Oil”
by Gary Alexander
Despite the Clear Evidence, Marxism Just Won’t Die

Global Mail:
The Great Gold-Silver Divergence
by Ivan Martchev
The Mainland Midas Effect

Sector Spotlight:
Sometimes “Twinkie” Stocks Lead the Market
by Jason Bodner
Energy Has Been the “Sleeper” in This Year’s Market

A Look Ahead:
Leading Indicators Point to a Robust Economy in Late 2018
by Louis Navellier
Oil Prices Are Up Due to Concerns over Iran and Venezuela

Income Mail:

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

Strapping in for the Summer Stock Market

by Bryan Perry

The stock market as a whole struggled last week, giving back some hard-fought gains of the prior week's advance, with the S&P 500, Nasdaq, and the Dow losing between 0.5% and 0.7%. However, shares of smaller, domestically-focused companies that are less affected by a rising dollar outperformed, sending the Russell 2000 1.23% higher, closing at a new record high in each of the last three sessions of the week.

While stocks have made a nice comeback from a crucial technical test of the 200-day moving average, there are some clouds forming on the horizon that I see as potential obstacles. A lot of attention is being given to the U.S.-China trade talks where some progress was made over the weekend with China agreeing to buy more U.S. goods to narrow the gaping trade deficit that was a record $375 billion in 2017.

Chinese trade officials, however, would not commit to a hard dollar figure on how much more they would import and over what period of time. As such, I chalk this up as a victory for China, because the threat of tariffs is essentially lifted. China can claim they made concessions on imports, which they can string out for years. Any time trade officials come away saying, “We’ve made meaningful progress” or “We agreed on a framework” without any numerical specifics, then I view it as a deal without much substance.

Speaking of empty deals, House Speaker Paul Ryan set a May 17 deadline for the Trump administration to submit a new NAFTA deal with Mexico and Canada to Congress for approval. That deadline has now come and gone. After nine months of negotiations, U.S. officials said that the three nations are nowhere near a deal on NAFTA. So, it now looks like any new NAFTA deal will fall on next year’s Congress.

NAFTA Trade Deal Image

In other international developments, the U.S. pullout from the Iranian nuclear deal is pushing oil prices higher and Kim’s stonewalling about the June 12 summit in Singapore is raising concerns that North Korea is not serious about striking a deal on denuclearization. According to U.S. officials, North Korea has already failed to abide by some of their commitments in the “Panmunjom agreement” that was signed on April 27 at the inter-Korea summit between North Korea’s Kim Jong-un and South Korea’s Moon Jae-in. The negative change in the Korean narrative is disappointing, but not unexpected.

As far as geopolitics go, these situations certainly deserve investor consideration in assessing whether any news is good enough to lift the market or bad enough to provoke any real downside risk. For now, the market is content giving the benefit of the doubt to the notion that cooler heads and rational dialogue and negotiation will prevail. We can see this in the persistently benign level of the volatility indicators.

A Trifecta of Macroeconomic Headwinds

Beyond this mix of potential market-moving headlines, however, I see three other areas of concern as fundamental risks to the market’s near-term uptrend. They would be (1) the strong dollar, (2) spiking oil prices, and (3) rising interest rates. This could be a trifecta of trouble if they all continue to trend upward in a coordinated fashion. A stronger economy warrants higher energy prices from rising demand; a rising dollar computes when considering that the Fed is shrinking its balance sheet, and rising interest rates make sense when the Fed is tightening its fiscal policy after nearly a decade of financial stimulus.

Crude oil has been touching levels last seen over three years ago as global supplies tighten amid fears over the implications of the Iran nuclear accord break-up. As of last Thursday, North Sea Brent traded at $80.00/ bbl., while WTI crude hit $71.50. The summer driving season officially kicks off Memorial Day weekend, just a few days away. Average gasoline prices across the U.S. are fast approaching $3.00 per gallon, which is a serious budget item to contend with for many Americans who commute long distances.

Brent Crude Oil Price Graph

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

A sharp 5% rise in the U.S. Dollar Index in the last month will surely show up as a foreign exchange headwind to profits for most multinational companies when they report Q2 earnings. Here too, companies have enjoyed Goldilocks conditions for so long that the market may react negatively if the dollar continues to climb. And from a technical standpoint, it looks very much like it will. The U.S. Dollar Index (DXY) currently trades at 93.66 with overhead resistance at 95. A move through that level opens the way for a further rally to 100, a level which would be very problematic for companies doing more than 50% of their business overseas. This explains the pronounced rotation of late into domestic small- and mid-caps stocks by professional fund managers seeking to lighten up on multinational stocks.

And while rising oil prices and the bullish move in the dollar are more apt to be curtailed by new crude supplies hitting the market and central bank injections to stem further price increases, there is little the market or outside forces can do to slow the rise in bond yields if the market senses inflation and a hawkish Fed. This is where I see the current rally running into some volatility as we approach the next Federal Open Market Committee (FOMC) meeting on June 13. There is currently a 95% probability the Fed will raise Fed Funds by a quarter point to 1.75%-2.00%, according the CBOE FedWatch Tool site.

Target Rate Probabilities Bar Chart

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

Such a move would be the second hike this year, with Fed Chairman Jerome Powell openly suggesting there could be four rate hikes in 2018. That would imply a third rate hike in September and a fourth in December. With the domestic GDP expanding at a 3%+ clip, inflation ticking higher, and second-quarter corporate sales and earnings growth looking to exceed that of the first quarter, the market being a forward discounting mechanism will spend the next few weeks weighing out the forces of rising wages, business investment, and consumer spending against higher costs to operate businesses and higher interest rates.

To that point, I think the market can transition through these eventualities, but not without some bouts of volatility along the way that will test the mettle of investors – similar to what occurred during February and March. Essentially, I do not expect a smooth ride for the stock market during the summer months, but I believe investors should maintain a cautiously optimistic stance on how they manage their portfolios.

Stock picking is always a paramount concern, and there is always a bull market somewhere, but heading into the summer, it’s my view that stock selection – like beach-front property – will come at a premium.

Growth Mail:

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

The “Peak Earnings” Scare May be as Bogus as “Peak Oil”

by Gary Alexander

This is the 10th May of this bull market and I’m happy to report that both the Dow and S&P 500 are on track for their best May gains since 2009. Despite the roller-coaster news of the up-and-down status of North Korean disarmament talks, China trade talks, Iranian treaty talks, domestic probes into Russian hacking, and all the soap operas surrounding our controversial President, this market runs on corporate earnings and global economic growth, both of which are growing well enough to justify a rising market.

For the last three weeks, I have mocked what may be one of the most clueless pieces of punditry offered in recent years – that stocks are going down because earnings momentum peaked last quarter. When a car slows from 75 mph to 55 mph, it is still moving rapidly forward, despite its slowdown in momentum.

We tend to forget that a major tax bill passed last December. It focused on corporate tax reform more than on individual rates, and corporations are now showing us how these tax cuts boosted their performance:

  • Just before the tax cut passed, industry analysts were projecting S&P Earnings growth of 11.2% this year – a nice gain for sure – but now they are projecting almost twice that growth, +21.3%. Their outlook for S&P 500 earnings for all of 2018 as of May 3 is a record-high $160.14, and $175.48 (+9.6%) for 2019. By the end of 2018, markets will be looking forward to 2019 earnings, so if the S&P 500 indeed earns $175 in 2019, a modest 16 P/E implies an S&P 500 reading of 2,800 by year’s end – a modest increase from here – but a healthier market mood could command 18 P/E, which could push the S&P 500 to 3,150.

  • Revenues are also set to grow at a near-record pace. According to Ed Yardeni’s morning briefing last Monday, industry analysts covering the S&P companies have raised their full-year 2018 revenue-per-share growth rate by 3.4% since September 2017. Yardeni writes: “They now expect that revenues will be up 7.4% this year and 4.7% next year.” Analysts have raised their revenue expectations the most for growth-oriented sectors like energy and tech, which implies they see sustained global GDP growth rates

Standard and Poor's 500 Profit Margin Measures Graph

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

  • Profit margins are also expanding. Industry analysts raised S&P profit margin estimates from 11.1% this year (and 11.7% in 2019) last December to 11.9% and 12.5%, respectively, as of May 3, according to Yardeni. If these numbers come to pass, it would be the first time in decades profit margins topped 12%.

Despite the Clear Evidence, Marxism Just Won’t Die

While I enjoy toasting the fruits of capitalist wealth production, I also see that our enemy refuses to die. This month marks (or is that Marx?) the 200th birthday of Karl Marx, whose ideas killed more people than any other person in history. The two worst mass murderers (Stalin and Mao) and the most recent (Pol Pot) were Red acolytes of the Marxist playbook. Now that Cuba’s Raul Castro has resigned, we are down to what may be the last dregs of hardline communist ideology in the pudgy face of Korea’s Kim Jong-un.

Marxism was always violent. The 1848 Communist Manifesto openly declared that their ends “can be attained only by the forcible overthrow of all existing social conditions.” After the February publication of the Manifesto (in German), there were March insurrections in Berlin which quickly spread throughout Europe. Tens of thousands were killed, but that was just a down payment on the Communist death toll.

A century ago, the newly-born Russian Communist Party executed Czar Nicholas II and his family in Yekaterinburg. Over the next 35 years, according to R.J. Rummel in his book, “Death By Government,” Lenin and Stalin murdered over 50 million of their own citizens and 60 million total. Mao Tse-Tung was next in line, killing over 35 million of his fellow Chinese. (Hitler comes in at #3, killing 20 million.)

Fifty years ago, students took over Columbia University and other U.S. campuses, and in Paris, students occupied the Sorbonne buildings, converting them into a commune, as striking workers and students took over the Paris streets. On May 24, 1968, revolutionary students seized the Paris Stock Exchange (the Bourse), raising a communist red flag over the building, and then tried to set it on fire. Students in France and America were enamored with the Communist solution to life’s problems. College students wore Che Guevara T-shirts while reading Mao’s little red book. In France, over 10 million workers went on strike:

May 1968 - Month of Revolution Graph

How fitting that a French economist revived the popularity of Marxist economics five years ago. In 2013, a young (born May 7, 1971) French economist, Thomas Piketty, had the top-selling “business” book of the year, eventually selling 2.2 million copies. The title of his book, “Capital in the 21st Century,” bears a faint resemblance to Marx’s Das Kapital, and his policy prescriptions called for the radical redistribution of wealth in a coordinated international attack on the rich through high (up to 80%) income taxes and an annual 2% tax on the net worth of the rich. This, of course, would lead to slow growth and forced asset sales, driving wealth-seeking entrepreneurs to those remaining nations that refused to attack capitalists.

Piketty admitted (in his introduction) that he hadn’t left Paris much since age 25. I’d say: Get out of your ivory tower and look at the world around you. The world is an economics laboratory. Marxism in Russia and China impoverished the masses and led to the death of over 80 million citizens. By creating capitalist business zones, China created 400 million middle class citizens and lifted one billion out of poverty.

The final gasp of Marxian madness may end if North Korea follows through with their promise of non-proliferation and negotiation – and if Venezuela and Cuba come to their senses in our home hemisphere.

Global Mail:

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

The Great Gold-Silver Divergence

by Ivan Martchev

In my experience, when precious metals are seeing strong investor interest, silver tends to outperform gold. This is because “poor man’s gold,” as silver is sometimes called, is a smaller market and therefore it is easier to move. The same dynamic works in reverse: When investors are not so hot on precious metals, silver declines faster than gold, so I am not surprised that silver is weak, now that the dollar is rallying, but I am surprised that gold is not weaker. This gold-silver divergence is also a bit of a head scratcher.

Gold Silver Divergence Chart

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

From a pure “chart” perspective, even though I am not much of a chartist (it has always been more important for me to understand the fundamentals that drive the charts), silver has made a series of lower highs and looks like its forming a “descending triangle” that’s getting ready to break lower. The weird part is that gold has made a series of higher lows, even though it ran into resistance at its 2016 highs.

United States Dollar Index Chart

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

I think I have a good understanding of why the dollar is rallying and why it is likely to end the year over 100, as I have explained often in this column, but I cannot say I have a good understanding of why gold bullion is not much weaker by now. Could it be the Russians or the Chinese propping the gold price?

Russian and Chinese Gold Reserves Chart

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

First, let’s look at the Russians, who have been very consistent buyers of gold bullion for self-defense purposes, as they are quite uncomfortable with quantitative easing and all the kinds of monetarist maneuvers being played by the Federal Reserve, the European Central Bank, the Bank of Japan, and the Bank of England. They are also uncomfortable with the bull market in Treasury issuance and debt issuance in general in the developed and developing world. (For more on this issue, see the November 20, 2017 Saint Louis Fed publication, “Global Debt Is Rising, Especially in Emerging Economies.”)

United States Government Debt Chart

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

While I agree that the Russians have been very cunning when it comes to their military operations and foreign policy, one place where they have been completely frank is their disdain for monetarist operations in the developed world. They have decided to put a large part of their financial resources in gold bullion.

Russian Budget Situation Chart

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

This aggressive Russian buying of gold bullion comes at a time when their government budget situation is stabilizing and their foreign exchange reserves are climbing courtesy of the rebound in price of their biggest export, crude oil. Russian President Vladimir Putin, love him or hate him, knows how to run a tight fiscal ship and has brought economic order, which is why he gets such a high approval rating.

Putin Approval Rating Chart

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

The Mainland Midas Effect

The Chinese also have been consistent buyers of gold bullion, but their reporting is significantly inferior to anything one sees from the developed world, or even Russia. I would take a Russian economic release with a much higher degree of confidence over a Chinese one as the mainland bureaucrats are notorious doctors of GDP statistics. For instance, Chinese economic statistics did not show a recession in the early 1990s, yet mainland bank loan-loss ratios showed evidence consistent with a bad recession that forced the People's Bank of China to devalue the yuan to the tune of 34% in December 1993; so when it comes to the PBOC telling the world how much gold they have – or how the Chinese economy is doing for that matter – I  don't quite take their numbers with a solid-gold guarantee.

It’s a definite possibility that China could be buying more gold bullion than they are reporting. Their foreign exchange reserves have started to go down again, which is rather peculiar as their trade surplus with the U.S. is headed for another record in 2018, so the supply of dollars in China should be plentiful.

Chinese Yuan versus China Foreign Exchange Reserves Chart

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

I am keenly aware that the recent decline in Chinese foreign exchange reserves may be due to the resuming capital outflows, courtesy of their busted credit bubble, which should result in a hard landing similar to the one experienced in the Asian Crisis in 1997-1998. Or, we could see capital outflows and more Chinese gold buying at the same time as only they have a good idea how bad the situation in their financial system truly is. I suspect it is quite a bit worse than they are letting the world know.

Whatever the reason for the mysterious bid in the gold market at present, I don't think that it will last, given how far the dollar is likely to rally in 2018 and 2019. Not even the giant Presidential egos of Vladimir Putin and Xi Jinping will be able to keep the gold price from breaking $1000/oz. if the dollar experiences a giant synthetic short squeeze courtesy of the explosive effects of the rampant global dollar borrowing in the past 10 years, catalyzed by 2018’s accelerating Federal Reserve quantitative tightening.

Sector Spotlight:

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

Sometimes “Twinkie” Stocks Lead the Market

by Jason Bodner

Maybe it’s quantity not quality after all. Consider this:

In 2010, a nutrition professor at Kansas State University wanted to prove a point. Mark Haub went on a diet in which 2/3 of his food intake consisted of Twinkies, Hostess cupcakes, Doritos, sugary cereals, and some Oreos. Now you may think he ballooned in size while his health fell apart. The truth is he lost 27 pounds in two months. His good cholesterol went up and his bad cholesterol went down. His body fat went from over 33% to under 25%. I couldn’t believe it either, but sure enough, you can read the story for yourself (“Twinkie diet helps nutrition professor lose 27 pounds,” by Madison Park, CNN, Nov. 8, 2010).

Twinkie Diet Image

The key to his success was limiting calorie intake. Diet, like almost anything, is simple science. In this case, it’s simple math. If calories burnt are more than calories consumed, your weight goes down. Haub proved this, whether eating Ho-Ho’s and nacho-chips, or salads and steamed fish. The fact that his health technically improved was not necessarily expected and, to be clear, he doesn’t condone this sort of diet.

I think inherently we all know that eating lower quantities and healthier foods will ultimately give us a longer and better life. But sometimes that cheesecake looks sooooo good. The key is moderation.

What’s interesting here is that the argument of quantity vs. quality was dealt a serious blow with this study. This was similar to an epiphany I had about 15 years ago when I studied stocks. Sometimes the market would go up en masse, but the stocks leading the rallies would not always be the ones with the strongest fundamentals. Sometimes the Twinkies would lead the market, not the fish or steamed veggies.

When I look for stocks, I am looking for the power-foods of the market, the ones with the best growth-promoting nutrients coupled with the strongest performance, so I constructed a rather elaborate screening method to find them. One key portion of the screen involves identifying which sectors are leading and which stocks are powering the market higher. This is a purely technical measure with no regard for the “nutritional value” of the stock or the company it represents. Sometimes market leadership comes from previously-hated sectors where investors suddenly find value. An obvious recent example is energy.

Energy Has Been the “Sleeper” in This Year’s Market

The case was strong in 2014 for the hatred of energy. The prices of physical energy commodities began plummeting in August of 2014. There was overproduction and underconsumption. The glut of product meant the world was drowning in oil. Simple supply/demand economics played out in spectacular fashion as the price of oil plunged from nearly $120/barrel to below $30 by early 2016. The collapse of oil took down several oil and gas exploration stocks and put major pressure on many “healthy” energy companies.

Crude Oil Price Chart

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

For a while, energy stocks were widely looked at as the “junk food” of the market. Whenever there was a rally in the sector, it seemed to be short-lived and not fundamentally based on quality. But times have changed. From summer of 2017 to now, oil has rallied from about $45/barrel to around $80 last week.

Looking at the stocks that are leading the sector, we see what was once considered junk-food may now actually be nourishing spa food. Oil & Gas stocks have been prominent in my writings for weeks now. The market often moves first, causing a lot of debate over the cause. Explanations tend to come later. Naturally, with higher oil prices, Oil & Gas Explorers see direct boosts to their margins. Profits start piling up, and sales and earnings growth metrics start exploding. The refiners do well with a wide spread between refined and raw product. In short, Oil & Gas-related companies and refiners are looking better.

Looking at how the sectors have been performing shows us clearly that energy, once considered toxic, is now the power-food of the market. The second strongest sector of the week has been the clear winner for three-months. The Energy Sector Index is up +15.3% for that time frame and +25.5 % for nine months.

Standard and Poor's 500 Sector Indices Changes Tables

It should come as no surprise that I like sectors containing a solid fundamental basis. Therefore, Energy has been my spotlight sector for a while now. It’s worth mentioning that the Energy sector is currently overbought by a few metrics that I look at. The rise of both the commodity and the oil stocks has been meteoric and appears unsustainable at this pace. I should add, however, that if crude oil prices do keep surging, we may see a protracted period of extreme bullishness in energy stocks. What this means is that exuberant buying may remain for a bit, but, at these levels, just be watchful for a near-term pullback.

This reminds me of the Woody Allen movie “Sleeper.” He played Miles Monroe, a health food store owner in 1973 who was cryogenically frozen and revived 200 years later. When he awoke, he wanted wheat germ and organic honey for breakfast. The scientist who heard this was dumbfounded, wondering why he wasn’t asking for grease, steak, cream-pies, or hot fudge, which were health foods of the future.

Sectors flow in and out of favor – as do food and fashion fads. Most of the time, leaders should contain attractive qualities, but sometimes the dreck pushes higher. It’s at that moment – when crud becomes gold – that we need to overcome our prejudice and take notice. Energy stocks are currently the beneficiaries of a surging commodities market. The companies are looking healthier and healthier—just like steak and fudge will be 200 years from now. Irony tends to span long time frames. What was once bad is now good. As Woody Allen said, “This stuff tastes awful. I could make a fortune selling this in my health food store.”

Woody Allen Quote Image

A Look Ahead:

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

Leading Indicators Point to a Robust Economy in Late 2018

by Louis Navellier

The “leading indicators” are so named because they tend to lead the economic news. They are primarily business indicators that predict the future direction of the GDP. On Thursday, the Conference Board announced that its leading economic index (LEI) rose 0.4% in April as eight of the 10 LEI components improved. Furthermore, the March LEI was revised up to a 0.4% increase, up from 0.3% previously estimated. In the past six months, the LEI has risen a robust 3.3%. Only building permits and stock prices were negative in April and these components are expected to be positive in May, so the LEI is expected to remain strong. This indicates that the GDP for this quarter and the next should be robust.

Backing up this verdict, the Commerce Department announced on Tuesday that retail sales rose 0.3% in April, in-line with expectations. March retail sales were also revised up to a 0.8% gain, up from the 0.6% previously estimated. Overall, the retail sales report was positive, especially the March upward revision, but economists are worried about how higher gasoline prices will impact consumer behavior in the future.

The one dismal note last week was when the Commerce Department announced on Wednesday that new housing starts declined by 3.7% in April to an annual pace of 1.29 million, down from a revised 1.34 million in March, but the fact that April was the coldest in 20 years may have impacted housing starts. So far, higher mortgage rates have not derailed housing starts, but affordability issues may eventually emerge. Overall, the housing market remains healthy due primarily to tight inventories and rising prices.

Oil Prices Are Up Due to Concerns over Iran and Venezuela

Iran’s defiance is temporarily putting upward pressure on crude oil prices. Light sweet Brent crude oil futures briefly hit $80 per barrel on Thursday on concerns over Iran’s oil supply. France’s Total warned that it might abandon a multi-billion natural gas project in Iran if it could not secure a waiver from U.S. sanctions, which cast further doubts that European countries could salvage the Iranian nuclear deal.

Oil Pipeline Image

The other wildcard potentially impacting the crude oil market is Venezuela, where incumbent President Nicolás Maduro won a second six-year term in a sham election held on Sunday. The Wall Street Journal reported on Friday that discontent in the military is at an all-time high due to shortages of food and evaporating salaries that are causing troop desertions. As a result, the Venezuela military is not happy with President Maduro, so a coup is increasingly likely, despite Sunday’s Presidential election. The WSJ reported that an Army captain that fled to a foreign country said, “The Venezuelan military is a time bomb, a pressure cooker,” and added that “It could explode at any time because everyone is unhappy.”  President Maduro has arrested many officers in a military purge that encompassed at least 124 servicemen that were imprisoned in January and February on rebellion, mutiny, espionage, and other charges.

Many Venezuelan citizens are urging the military to take matters into its own hands and are encouraging a coup. Senator Marco Rubio via Twitter said, “I think the world would support the Armed Forces in Venezuela if they decide to protect the people and restore democracy.”  President Trump’s top adviser on Latin America, Juan Cruz, told a conference on hemispheric security in Miami in April that “There has never been a key moment in Venezuelan history that has not involved military participation.”  The food shortage is so acute in Venezuela that the military can no longer feed its own troops. Obviously, the current situation in Venezuela is dire, so it is just a matter of time before a military coup occurs.


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.

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.

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.

Marketmail Archives