New All-Time High

S&P 500 Finally Ekes Out a New All-Time High

by Louis Navellier

August 28, 2018

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After last week’s guilty pleas by former Trump associates Michael Cohen and Paul Manafort, talk of impeachment is once again swirling in Washington DC and the mainstream press, but the stock market hit a new all-time high, so obviously the rest of the country isn’t taking this threat seriously. Both political sides have to admit that the economy is strong, so political consultant James Carville’s famous proclamation that “It’s the economy, stupid” will unquestionably be retested in the November mid-term elections.

The S&P 500 rose 0.86% last week and finally eked out a new high, less than two points (0.06%) above last January’s high. More importantly, there was an impressive resurgence in fundamentally superior stocks. When stocks are meandering higher on light trading volume, as they did last week, then it’s likely they will surge even more when trading volume picks up in the upcoming months, as more traders return.

I do not think we should overreact to any political gossip, since if the Republicans keep control of the House, any impeachment threat will likely fizzle fast. Furthermore, even if the Democrats take control of the House after the mid-term elections, two-thirds of the Senate still must vote for an impeachment.

In This Issue

Bryan Perry notices the decline in home and vehicle purchases at the same time retail sales in other areas are rising. This will no doubt cause the Fed to rethink any more rate increases after September. Gary Alexander examines the latest barrage of doomsday articles and magazine covers which often spring from the unconscious political bias in New York and Washington. Jason Bodner once again uses the laws of science to ask us to check our premises when examining markets and sectors, as he sees the clear winners emerging in 2018. In the end, I’ll bring you more on Fed policies and ETF mechanics. Ivan Martchev is off this week, on his way back from his native Bulgaria. He will write his usual Global Mail next week.

Income Mail:
Big Ticket Purchases Trending Down in Front of FOMC Meeting
by Bryan Perry
More “Buy Now, Pay Later” Showing Up in the Data

Growth Mail:
Bias Blinds Many New York & Washington Pundits
by Gary Alexander
Is the End of the Bull Market Near? Will 2008 Happen Again?

Sector Spotlight:
When Worlds are Turned Upside Down…
by Jason Bodner
Late Summer “Churning” in the S&P Sectors Continues

A Look Ahead:
Why the Fed is Likely to Stop Raising Rates After September
by Louis Navellier
Reflections on What Happened 3 Years Ago and its Impact on ETF Trading

Income Mail:

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

Big Ticket Purchases are Trending Down in Front of FOMC Meeting

by Bryan Perry

It’s all but a foregone conclusion that the Fed will raise short-term interest rates by a quarter-point at the next FOMC meeting in late September. The Fed Watch Target Rate Probability tool is currently showing a 96% probability of the Fed Funds moving up to 2.00%-2.25% at the September 26 meeting and a 62.1% chance of another hike at the December 19 FOMC meeting (charted below). However, there is growing evidence that the Fed might find it harder to justify the December rate increase – or any rate hikes in 2019.

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

If the Fed doesn’t act in December, there is currently a 60.7% chance that they will raise rates in January 2019. However, if the auto and housing markets continue to show signs of further softening, the Fed will likely step to the sidelines after the September rate increase. Recent auto and housing totals are down:

Domestic auto sales for July decreased to a seasonally adjusted annual rate (SAAR) of 3.93 million from a SAAR of 3.95 million in June. The July sales rate was 12.7% below the year-ago period. Domestic truck sales decreased by 3.5% to 9.14 million SAAR in July, down from 9.47 million SAAR in June.

Looking at the July data (year-over-year) for each major auto company, most company sales were down:

  • BMW                              -0.3%
  • Fiat Chrysler                   +5.8%
  • Ford                                -3.3%
  • GM (estimated)                -3.0%
  • Honda                             -8.2%
  • Hyundai-Kia                     -5.1%
  • Mercedes-Benz USA      -20.1%
  • Nissan North America     -15.2%
  • Subaru                           +6.7%
  • Toyota Motor                   -6.0%
  • VW Group of America     +7.9%

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

On the housing front, there are several variables that together are negatively impacting recent data. The key takeaway from last week’s July Existing Home Sales report is that supply constraints continue acting as a drag on overall sales. Lower inventory, higher mortgage interest rates, and higher prices on available inventory are crimping affordability, especially for first-time buyers. All prospective buyers are facing affordability pressures resulting from home prices increasing at a faster pace than income.

With that said, there are a couple of notable changes in the underlying trends. While supply is tight at 4.3 months, it is well up from March’s 3.5 months’ supply. Additionally, during this same time frame, the year-over-year median price increases have declined from 5.6% in March to 4.6% in July. This implies a positive trend and not some one-off or seasonal situation, as some economists have suggested.

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New Home Sales for July didn’t fare any better, decreasing by 1.7%, led by a stunning -52.3% decline for the Northeast region. The July Building Permits report revealed that single-family housing starts rose just 0.9% to 862,000, a modest pace that reflects the headwinds builders are facing with higher costs for materials, labor, and land. Regardless of the fact that there is an affordable housing shortage, especially for first-time home buyers, builders are not stepping up the pace of permits to build low-cost housing. The profit margins just aren’t there to offset the aforementioned rising costs.

More “Buy Now, Pay Later” Showing Up in the Data

Even while auto and home sales declined, retail sales ex-auto rose 0.6% in July, implying that spending on small ticket items is robust. The Thomson Reuters Same Store Sales Index is now looking at 3.3% Q2 2018 growth, up from 1.2% in Q2 2017. All sectors are expected to post stronger comps this year.

So, if wage growth is nominal and the cost of housing, medical, travel, entertainment, education, elder care, food, and gas is up across the board year-over-year, what accounts for the rise in discretionary spending? Answer: Credit card debt soared to an all-time record high of about $1.04 trillion in June.

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

The benefits of tax reform are clearly seen in the rise of the U.S. stock market averages, but this newfound optimism has also spurred consumers to spend more. The percentage of U.S. households revolving their credit card debt from month to month has been rising recently to 38% in 2018 after steadily falling from 41% since 2010, while delinquencies are starting to rise, primarily among the small community banks, according to the National Foundation for Credit Counseling. Add in record student loans of $1.5 trillion and record auto loans owed of over $1.1 trillion and it gets the Fed’s attention. I leave out the $15 trillion in mortgage debt outstanding because, barring a repeat of 2008, real estate is an appreciating asset.

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Americans are in a borrowing mood, and their total tab for consumer debt could reach a record $4 trillion by the end of 2018, according to Lending Tree, which analyzed data from the Federal Reserve on non-mortgage debts, including credit cards, auto, personal, and student loans. Americans owe more than 26% of their annual income to these forms of debt, up from 22% in 2010.

What this tells me is that these trends, while still manageable for consumers in the aggregate, should give the Fed pause in considering any future rate hikes after September. A further pop in short-term rates could really move the needle in the debt-to-household-income ratio. But given what the data is already showing us, the Fed is already repositioning its posture from that of being hawkish to that of being more neutral.

If at any point after the September FOMC meeting the Fed signals a no-go on a December rate hike, U.S. stocks should rally and thus remain the center of global investing attention. And if the market gets a real whiff of the Fed standing pat on any further rate hikes, dividend growth stocks should lead the year-end rally, with the retail sector not too far behind. Leave no doubt. America does love to shop.

Growth Mail:

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

Bias Blinds Many New York & Washington Pundits

by Gary Alexander

“The more I see New York, the more I think of it.
I like the sight and the sound and even the stink of it.”

 – From “I Happen to Like New York,” by Cole Porter,
a song from his 1930 Musical, “The New Yorkers”

I live on a small island, which is 12 miles north to south and 2-3 miles wide – about the size of Manhattan – but we have only 2,000 people year-round, as opposed to the 2,000,000 who crowd into the Big Apple. But human nature is the same everywhere. My island is heavily anti-Trump, and so is Manhattan. I dare not say a positive word about Trump’s economic policies, and neither can most New Yorkers. I subscribe to both New Yorker and New York magazines for their excellent writing, but the group-think of their left-wing politics and anti-Trump rants grows tedious over time. The same goes for The New York Times.

As for Wall Street, market pundits have their own form of myopia – often based on flawed formulas from the past. I keep seeing some of the same silly arguments arise, like “this is the longest bull market ever” (not so, as I have shown) or that “valuations are historically high” (not so, when looking at rising forward earnings) or “the yield curve is nearly flat” (not so, when you compare the Fed funds rate to 10-yr bonds).

Another bugaboo is a fear of September or October, but the last third of the year has been positive lately:

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

Turning to Washington DC, there’s something about the Beltway that causes otherwise sane and brilliant people to lose track of what’s happening outside of that magic circle that surrounds the capital city. Each Sunday morning, I force myself to watch NBC’s “Meet the Press” and assorted other Sunday talk shows. I actually time their discussions and find that over 90% is Trump-phobic or Beltway-related trivia. There is virtually not a single word about any other issue in the wide world swirling around outside the Beltway.

Venezuela is falling apart in social chaos and starvation under the socialist leadership of Nicolas Maduro (but not a word on Meet the Press). South Africa President Cyril Ramaphosa is channeling Zimbabwe’s Robert Mugabe (still alive at 94) by confiscating white-owned farms without compensation – all without much notice by the U.S. press. Also, you wouldn’t know the status of the nuclear deals in Iran or North Korea by listening to the Sunday morning talk shows or the evening news – not a peep. Turkey was the “flavor of the week” for a week, but not a word about any foreign nation on the latest Sunday gab fests.

Is the End of the Bull Market Near? -- Will 2008 Happen Again?

Negative news sells, and it sells a lot better when coupled with fears of an unpredictable President. The August cover for FORTUNE magazine went hard-core into “End of the World” fears in a 9-page article by Geoff Colvin, while New York Magazine created “slasher film” imagery in its mid-August cover:

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The August Fortune article begins by reminding us that this expansion is 110 months old, the second oldest in history, but that means nothing. Please repeat after me: “Economies don’t die of old age – and neither do bull markets. Average ages mean nothing.”  Colvin adds some legitimate concerns, like (1) “a trade war makes other problems worse” and (2) “rising oil prices will gum up global gears,” but after his article was written (in mid-July), trade negotiations have eased tariff fears and oil prices have come down.

Due to long magazine lead times, this article was written in mid-July, before earnings season began, but now we know that S&P revenues rose 10.3% to a new record high and earnings rose 25.6% to new record highs. Profit margins are also at a record high, but the S&P 500 is barely at a new record high. That leaves some room for more growth in the “P” of the Price/Earnings ratio to catch up with 2018’s earnings surge.

The New York cover article (“2008: 10 Years After the Crash”) hardly deserves a serious response. The editors know that millions of younger readers love horror films, so their cover is based on the “Scream” franchise mask. The articles inside maintain this overtone of horror. The main article is titled, “The financial crisis broke the modern world, and we are still living in the ruins.” Yah, sure: Global wealth in constant exchange rates has risen over 60% since 2008, making the crisis look like a blip. Some “ruins”!

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

 

In New York’s 18 pages of scary articles, the longest is “America Stopped Believing in the American Dream,” by Frank Rich. Equally cynical posts were: “Every Job Became a Hustle,” “A Generation Lost Trust” and “The Market Was Revealed as a Casino.” Then came a statistical spread, “It Was Bad – Real Bad,” with this lead-off buzz-kill: “Total US household net worth dropped by $11.1 trillion in 2008,” but why didn’t they follow up that dismal statistic with this: “Households Gained $45.8 trillion, 2009-18.”

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

After U.S. household net worth dropped $11 trillion from 2007 to 2009, U.S. household net worth soared 83.5% in the next nine years, from the first quarter of 2009 to the first quarter of 2018, rising from under $55 trillion to over $100 trillion. (Second-quarter 2018 statistics will be released in early September.)

Tell the whole story, New Yorkers. You don’t have to let your anti-incumbent bias cloud your analysis.

Sector Spotlight:

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

When Worlds are Turned Upside Down…

by Jason Bodner

Human bias. We are all guilty of it. We approach decisions about outcomes based on our experience. This is normal and “hard-wired” into our brains. The problem comes when we trick ourselves into believing that we know everything. We know winter comes every year. We know that it gets hot in the summer. We know that the sun rises in the east and sets in the west. These are indisputable truths, right?

Well, no actually. What’s winter for us in the Northern Hemisphere is summer for our friends south of the equator. Surf’s up at Christmas down-under. As for sunsets, looking west to catch one is an “earth thing.” If you were Venusian, you would have to look east. Venus spins opposite to most in the solar system. So, to catch a sunset on Venus, you would look east. And a day is longer than a year on Venus. A Venus day is 243 earth days long, while its year is only 224 days long. Keep that in mind next time you visit Venus.

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I know what you’re going to say: “None of this is relevant to me.” That may be true, unless of course you have relatives in Australia – or even Venus, for that matter. The point is, we humans are pre-programmed for our local bias. It allows us to slip into the comfort of a routine, which we crave on an instinctual level. This means when change rips through the system, or the system is not predictable, we get uncomfortable.

The market is a place where everybody wants to see some sweet and soothing predictability. When it’s calm, investors consistently get lulled into quiet relaxation, with an innate assumption that the market will float along higher forever. That assumption is both true and not true. Markets have been steadily climbing since the early 1900s, but that ancient timeline is just too long to be comfortable for most of us. Year by year, the market can rise or fall very sharply, as we have seen several times over the last few decades.

The average investor also develops situational bias. For example, when the general market indexes surge higher, a general feeling develops that “the markets are good,” but when markets come under pressure, people generally seek out the guilty sector that is causing it – like tech stocks in 2000 or housing and financials in the 2008 mess. My point is that it pays to know the environment beyond your comfort level.

Markets are strong now, but why are they strong? What is powering them higher? And what can drag them back? The most important question you should ask yourself each day is: Where is the leadership? If you’re not constantly asking this question, you run the risk of tricking yourself into a false comfort.

This is why I look at the S&P’s 11 sectors for you here each week.

Late Summer “Churning” in the S&P Sectors Continues

The S&P 500 posted a reasonably strong week, with a +0.86% close for the week, but the sectors are still sloshing around, meaning one week the leaders lead and the next week they lag. This is typical in summer and not something I am overly concerned about. But we should be aware of it. Let’s look a little deeper:

The leading sectors of a couple of weeks back are this week’s losers: Real Estate, Telecom, Utilities, and Consumer Staples. These are typically more “defensive” sectors. They get bought up when uncertainty rises. Investors like to buy stocks with high yields (safer and more predictable dividends) like Utilities, Telcos, and Real Estate, with known outcomes like Consumer Staples. (Everyone will still buy toothpaste and toilet paper, even if things get ugly.) These were leading sectors for a week or so and now they lag.

The top three sectors last week were Energy, Consumer Discretionary, and Information Technology. This has me giddy for a few reasons. Let’s leave energy aside for a moment, since this is a commodity that is usually seasonally-driven. Consumer Discretionary and Info-tech are growth-oriented sectors. These sectors perform well when there is perception of smooth sailing and calmer markets. These sectors are the six-month winners, as you can see below. But for the past few weeks and months, these sectors have been bouncing around as money moves from one to the other, in search of “alpha” (return above the indexes).

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

 

This says one important thing to me: Stocks with strong fundamentals are getting rewarded again. This sets up well for the fall. When volume picks up as traders return from their vacations, we want to be in the fundamentally strong sectors that should lead the market higher. Infotech, Consumer Discretionary, and Health Care is where we want to see leadership, now that earnings season is over. When these sectors sport growing sales and earnings, they tend to signal a strong economy, and that is an encouraging sign.

Last week, the financial media made a big deal out of the “longest bull market ever” (depending on how you measure it), but I feel this bull market has a lot of room left to run. There will be stories and headlines to rock the boat for sure, but all in all, the backdrop seems to be a great prognosis for strong market performance in the coming months, and possibly years. We have record low corporate tax rates, record high sales and earnings growth, corporate buy-backs, and a record high stock market. Take that, bears!

If you are going to be bullish or bearish, do so based on facts and data. Try not to develop environmental bias, just because it feels good. Remember, there is a southern hemisphere with a warm Christmas. And don’t put too much of your credence in the media. It’s entertaining, no doubt, but its main purpose is just that – to entertain enough viewers to sell ads. Jerry Seinfeld had a point when he said: “It's amazing that the amount of news that happens in the world every day always just exactly fits the newspaper.”

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A Look Ahead:

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

Why the Fed is Likely to Stop Raising Rates After September

by Louis Navellier

The Kansas City Fed’s annual conference at Jackson Hole last week provided some market clarity, since after Chairman Jerome Powell’s speech on Friday, the stock market rallied on his assurances that the Fed would only raise key interest rates “gradually.”  After Chairman Powell’s reassuring comments, I expect we’ll see a dovish Fed statement in mid-September, since the Fed does not want to invert the yield curve.

Since other major central banks have not followed the Fed’s series of key interest rate hikes, especially the European Central Bank (ECB), I suspect that the FOMC will eventually have to concede that due to rising uncertainty, the Fed may pause raising key interest rates after its September FOMC meeting.

To back up this theory, the last FOMC meeting minutes were released on Wednesday. These minutes implied that if the U.S. economy performs in line with expectations it would “soon be appropriate to take another step” in raising rates, but the FOMC minutes also discussed changing its monetary policy to “accommodative.”  This would be a welcome change in policy, since the Fed would essentially admit that it is now “neutral” and unlikely to raise key interest rates if inflation remained within the FOMC’s 2% inflation target range.

One big reason for the Fed to pause raising rates after its next FOMC meeting is that the National Association of Realtors on Wednesday announced that existing home sales slipped 0.7% in July to a 5.34 million annual pace, the slowest rate in 2½ years (since February 2016). Existing home sales have now declined for four straight months, caused partly by higher mortgage rates. Currently, there is a 4.3-month supply of existing homes for sale, a very tight supply that could cause median home prices to keep rising.

Speaking of housing, the Commerce Department announced that new home sales declined 1.7% in July to an annual rate of 627,000, the slowest pace since last October, led by a huge 52.3% sales decline in the Northeast, the biggest one-month decline since 2015. Growing affordability problems and a lack of inventory continue to weigh on new home sales. Since itemized deductions, like mortgage interest, have been capped at $750,000, it will be interesting to see if this weighs on the sales of high-cost properties.

On Friday, the Commerce Department announced that durable goods orders declined 1.7% in July, much worse than economists’ consensus estimate of a 0.8% decline. Due to some order cancelations at Boeing, which caused new orders for commercial aircraft to plunge 35.4%, new transportation orders declined 5.3% in July. But excluding transportation, durable goods orders rose 0.2% in July. Even better, business investment, excluding aircraft, rose a robust 1.4% in July. Overall, durable goods orders have risen 8.6% in the first seven months in 2018 compared to the same period in 2017, so GDP growth remains strong.

(Please note: Louie Navellier does currently hold a position in BA in Mutual Funds. Navellier & Associates does currently own a position in BA for client portfolios).

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The trade talks that resumed last week between China and the U.S. have not yet resulted in any meaningful progress, so trade fears may resurface in the upcoming weeks, but outside of the Fed, virtually no other major central banks seem to want to raise key interest rates. Because of that fact, I expect the U.S. dollar to remain strong, causing the Fed to postpone further interest rate hikes after its September meeting.

As soon as the Fed signals that further interest rate increases are not likely, I expect a big resurgence in dividend growth stocks. Bespoke issued a report last Wednesday (“Dividend Model Portfolio Update”) that reports that year-to-date, the stocks in the Russell 1000 with the highest dividend yields (top decile) are down 3.8%, while the stocks in the Russell 1000 with no dividend yields are up a whopping 18.2%!  Many of these stocks with no dividend yields have benefitted from short-covering rallies. Since short-covering rallies typically do not last more than six months, I expect that many of these heavily-shorted stocks, like Tesla, will roll over and allow dividend growth stocks to resurge in the upcoming months.

Reflections on What Happened 3 Years Ago and its Impact on ETF Trading

Friday marked the 3-year anniversary of an “intraday flash crash” that had devastating consequences.

On August 24, 2015, 1,278 stocks “gapped down” more than 5% at the opening, so the NYSE stopped trading those stocks. However, ETFs containing those stocks continued to trade without investors knowing the value of the stocks within that ETF. Some ETF specialists abruptly dropped their bids approximately 35%. The apparent reason the ETF specialists dropped their bids 35% was that in the May 6, 2010 5-minute “flash crash,” all trades that dropped 40% or more were reversed, as if they never happened, so ETF specialists knew that if they did not cross that 40% threshold, their trades would hold, so they picked off everybody by 35% instead! The chart below shows the carnage.

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

The reason I showed the iShares Select Dividend ETF (DVY) being hit 34.95% intraday on August 24, 2015, is that I wanted to prove that a big, well-respected ETF, with high Morningstar ratings and a nice dividend yield was not immune to intraday Wall Street specialist shenanigans. Furthermore, on the chart below, I chart a high dividend stock, KKR, plunging 58.82%, apparently fueled by margin calls from investors that unwisely bought KKR and other high dividend stocks on margin.

(Please note: Louie Navellier does not currently hold a position in KKR. Navellier & Associates does not currently own a position in KKR for client portfolios).

chart8.jpg

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

The moral of the August 24, 2015 intraday flash crash is that Wall Street is only liquid at a deep discount and that stop loss orders cannot protect you from intraday ETF and stock price anomalies. (On September 13, 2015, The Wall Street Journal published an excellent analysis of what went wrong in the structure of ETF trading on that fateful day in an article entitled: “Wild Trading Exposed Flaws in ETFs.”)

When you look at the prices of ETFs at the end of the day, it tends to show a very pretty picture, but our friends at Bespoke Investment Group recently published a fascinating article called “Fear the Day,” in which they pointed out that if you bought the biggest and most liquid ETF, namely SPY, at the opening and sold it at the close every day since January 1993 between January 1993 and January 2018, you would lose 11.9%. On the other hand, if you bought SPY at the close and covered it at the opening every day since January 1993, you would make 565%!  This amazing 577% return differential is due to the fact that Bespoke’s research proved that more than 100% of SPY’s gains since 1993 happened after market hours.

If you want to be a successful ETF investor, you apparently have to stop trading ETFs during the day!  Well, not exactly. If you can successfully buy or sell an ETF at or near its net asset value – or what Morningstar calls its Intraday Indicative Value – then go ahead and trade during market hours. However, as too many ETF managers have learned, moving big blocks of ETFs during market hours can be problematic

The moral of this story is that managed ETF success comes from (1) waiting to trade ETFs during orderly markets with minimal premiums/discounts relative to net asset value, (2) avoiding poor trading platforms that prohibit “step out trading” to more effectively move big ETF blocks, and (3) naturally buying great smart Beta ETFs.


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

Although information in these reports has been obtained from and is based upon sources that Navellier believes to be reliable, Navellier does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute Navellier's judgment as of the date the report was created and are subject to change without notice. These reports are for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of a security. Any decision to purchase securities mentioned in these reports must take into account existing public information on such securities or any registered prospectus.

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Marketmail Archives Trade Summary

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

Although information in these reports has been obtained from and is based upon sources that Navellier believes to be reliable, Navellier does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute Navellier's judgment as of the date the report was created and are subject to change without notice. These reports are for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of a security. Any decision to purchase securities mentioned in these reports must take into account existing public information on such securities or any registered prospectus.

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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