Tech Stock Sell-off

Tech Stock Sell-off Looks Like a Great Buying Opportunity

by Louis Navellier

June 13, 2017

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

On Friday, there was a big intraday technology sell-off, as the NASDAQ Composite fell over 200 points (-3%) in less than four hours (11:00 am to 3:00 pm), from an all-time high of over 6,340 to below 6,140.

Tennis Ball Bouncing Image

This mini-correction was a normal reaction after NASDAQ had risen so much faster than the other indexes in the first half of 2017.  I am not worried about profit taking in leading tech stocks, since this sell-off was technical in nature and there was a reversal in the last hour of Friday's trading as bargain hunters were quick to snap up great technology stocks on the pullback.  In the end, good stocks bounce like fresh tennis balls while bad stocks fall like rocks, so I expect a big bounce back in tech stocks in the upcoming weeks.

The big event this week will come from the Federal Open Market Committee (FOMC) tomorrow at about 2:00 (EDT), June 14th.  Whether they raise rates or not, I expect that a dovish FOMC statement could give the market a second wind.  After that, the annual Russell realignment, 90-day smart Beta ETF rebalancing, and quarter-ending window dressing in late June bode well for a strong finish to the second quarter.

In This Issue

In Income Mail, Bryan Perry takes a contrarian look at the sagging retail sector, while Gary Alexander examines the latest in Doomsday prophecies.  Ivan Martchev sees a possible recession ahead, but nothing like the 2008 bloodbath.  Jason Bodner sees recovery in the Tech sector and continued trouble in Energy, while I look at the flattening yield curve as an indicator the Fed may not want to raise rates much further.

Income Mail:
Shopping for Retail “Diamonds in the Rough”
by Bryan Perry
Online Retailers Setting Up Shop

Growth Mail:
Market Keeps Rising – Disaster Soon to Follow?
by Gary Alexander
Jim Rogers: Worst Crash in Our Lifetime is Coming”

Global Mail:
Stock Market Chartology
by Ivan Martchev
Some Background on the Last Three Stock Market Crashes

Sector Spotlight:
New Energy Sources are Nearly Infinite
by Jason Bodner
Leaders (like Tech) Lead and Laggards (like Energy) Lag

A Look Ahead:
A Flattening Yield Curve May Give the Fed Second Thoughts
by Louis Navellier
Last Thursday’s UK Elections Could Also Flatten the Yield Curve

Income Mail:

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

Shopping for Retail “Diamonds in the Rough”

by Bryan Perry

The news surrounding the retail property sector has been smothered in hopelessness for those that operate businesses at America’s shopping malls. Amazon.com, the 800-pound gorilla has led a transformational shift in retail buying to the Internet that is applying a crushing blow to the brick-and-mortar retail chains.

The weekly chart of the SPDR Retail ETF (XRT), which includes the entire gamut of retailers, shows the pain exacted from shareholders of a sector that is rapidly separating the good from the bad and the ugly. Holders of this ETF have endured 14.5% losses over the past six months.

SPDR Retail ETF Chart

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

Carving out the S&P 500 Department Store Index, the loss is even more severe, dropping from a 52-week high of $200.49 to close last Friday at $124.28, delivering a 38% downside hit (seen in the chart below).

Standard and Poor's 500 United States Department Store Index Chart

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

At the same time, local neighborhood and community shopping mall operators have experienced little if any falloff in foot traffic and purchasing of goods and services. Let’s face it, everyone’s got to eat, get their hair cut, swing by the coffee shop, drop off the dry cleaning, get the kid some music or karate lessons, have a beer at the sports bar, or go to other stores whose products require your bodily presence.

Stores that provide home and garden products, groceries, beauty items, coffee and baked goods, auto parts, pet products, tires and auto maintenance, prescriptions and personal care items, haircuts, pedicures, and booze along with all manner of restaurants and gift shops are where 90% of suburbanites shop.

The outgoing tide of fund flows from anything and everything retail has taken its toll on all but a handful of retail-oriented assets. I view this washout as a prime opportunity for dividend investors to take a position in truly blue-chip stocks trading at steep discounts that I don’t believe will last very long once the smoke clears and the wheat is separated from the chaff. There just isn’t an Internet or ecommerce solution for having to survey greeting cards and wrapping paper options at the Hallmark store to package a gift for a party you’re attending in three hours – or stopping by a Dunkin Donuts before heading off to work.(Please note: Bryan Perry does not currently hold a position in Amazon. Navellier & Associates does currently own a position in Amazon for any client portfolios).

Online Retailers Setting Up Shop

One of the biggest changes in the retail segment is coming from companies that began online and now want to centralize distribution in neighborhoods. They’re now starting to open brick-and-mortar stores as pickup points because that provides the most efficient way to get their products to customers. This trend could have a dramatic impact on the grocery-anchored malls. Having one’s online purchases delivered to a secure, climate-controlled location close to home removes the risk of theft or any perishables going bad.

More successful retailers will pursue this dual approach that marries technology to brick-and-mortar stores. Well-located shopping centers will serve as relevant distribution channels for these sellers and add a new dynamic to the future of leasing retail space that complements ecommerce rather than suffering from it. This is a big “Aha!” moment for the sector. This is why I’m seeing this massive pullback in strip mall REITs as a potentially lucrative buying opportunity given the steep discounts they are currently trading at.

I could go on and on about the endless list of needs and services these neighborhood strip malls provide. They are, by definition, integral to the daily lives of the majority of Americans that do not live in cities. Some of these neighborhood shopping REITS are trading at levels not seen since the Great Recession of 2008-2009 and now represent what I consider a deep value proposition where a few standout companies paying yields of 5% to 6% make for outstanding entry points and terrific long-term investments.

The SPDR U.S. Retail REIT Index is down by over 25% in the past six months, making it one of the least-loved sectors in the stock market universe. That said, every sector finds a bottom and bottoms can take months to form, but within this blown-out sector there are a few gems that don’t deserve to be punished. Herein lies the opportunity that I find in my radar to be legitimate and credible.

Late last week, I noticed strong rotation of fund flows into some of these blown out, high-yield neighborhood strip mall operator REITs. I wondered to myself if this is a serious multi-year buying opportunity under the notion that ecommerce pairs up with community brick and mortar to where both models live in harmony with each other. Logically, it is a rational proposition. Time to go shopping?

Growth Mail:

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

Market Keeps Rising – Disaster Soon to Follow?

by Gary Alexander

“Markets Take Off in Lockstep, Raising Worries of a Reversal”

--Page 1 Headline, Wall Street Journal, June 7, 2017

The Wall Street Journal argued last Wednesday that 2017 has been strong for stocks, bonds, gold, and bitcoins.  They said this “unusual lockstep” is raising concern of a “sharp reversal” in the months ahead.

Not everything is up this year.  Oil is down 14.7%, the CRB commodity index is down 8.2%, and the WSJ  Dollar Index is down 4.8%.  Several sectors are hurting badly, including retail stores (see Bryan Perry’s column, above).  That’s why this negative spin on a positive situation is so unnecessarily confusing.  Why can’t we simply enjoy good market outcomes without a scolding?  Headline writers must think like this:

“Star Student Scores Straight A’s, earns scholarship; Parents fear lower grades will follow”
Or: “Couple celebrates 50th wedding anniversary; friends fear an imminent divorce”
Or: “Five days of great weather raise the probability of a really lousy day tomorrow.”

I’m also baffled by the terms “risk-off” and “risk-on.”  Are investors really so manic-depressive that they have alternating “risk-off” and “risk-on” days in quick succession, like “bad hair” days?  Reporters also like to say, “Stocks fell on profit-taking.”  Aren’t there buyers for all those stocks?  How do they know these stocks were sold at a profit?  Smart investors also sell their losers, don’t they?  Sometimes they sell because they need the money.  Why not just say that a stock index rose or fell without making up reasons?

Media moguls know that bad news sells, since fear is a more powerful emotion than joy or hope – or even greed.  The press has found a wonderfully easy whipping boy in President Donald Trump, so they are working overtime to fan the flames of fear about what he once did, is doing now, or may do next.  That is their privilege.  We shouldn’t begrudge them the best path to publishing profits – fear, anger & outrage – but they are also ignoring a whole raft of good news, not necessarily attributable to President Trump, but happening on his watch and therefore off limits since colleagues might accuse them of being pro-Trump.

Negativity is getting worse.  A Harvard study published May 20 revealed that three of four major news outlets produce more than 90% negative coverage of President Trump.  The study focused on the tone and content of four shows typical of each network’s news coverage: CNN’s Situation Room, NBC Nightly News, CBS Evening News, and Fox’s Special Report.  According to the study, CNN and NBC aired 93% negative coverage of the President.  CBS was next at 91%, while the much-maligned Fox News network turned out to be the most “fair and balanced” with 52% anti-Trump coverage.  Among the leading national newspapers, The New York Times was 87% negative on Trump, the Washington Post was 83% negative, and even Wall Street Journal came in at 70% negative in their coverage of President Trump.

Overall, the media surveyed in the Harvard study were 80% negative on Trump vs. half that level (41%) for President Barack Obama, 57% negative for George W. Bush, and 60% negative for Bill Clinton.

Tone of Presidential News Coverage Bar Chart

While musing over these predictable patterns of negativity in our human nature, I logged on Saturday morning to write this column and was assaulted by a series of negative headlines, including this doozy:

Jim Rogers: “Worst Crash in Our Lifetime is Coming”

Investor Jimmy Rogers, whom I have occasionally introduced at investment conferences, is a friendly and humorous gentleman who has traversed the world on motorcycles and written two books on the subject, “Investment Biker” (1994) and “Adventure Capitalist” (2003).  He has also written a timely books on “Hot Commodities” (2004) and “A Bull in China” (2007) – great titles, good timing, and entertaining reading.

In his televised interview with Business Insider’s CEO Henry Blodget, Rogers said, “Some stocks in America are turning into a bubble. The bubble’s gonna come. Then it’s gonna collapse.”  Fair enough. Some specific stocks are likely in a bubble condition, but when Blodget asked, “How big a crash could we be looking at?”  Rogers responded, “It’s going to be the worst in my lifetime” (Rogers was born in 1942).

A decade ago, the S&P 500 fell 57.7% in 17 months, from 1,576 on October 9, 2007 to 666 on March 9, 2009.  It will be a dismal planet indeed if we see a 60% S&P drop – or 22% in a day (as on October 19, 1987), but Jimmy Rogers is apparently expecting the greatest drop since the 1930s within a year or two.

This prediction flies in the face of U.S. and global growth of 3%, rapidly rising earnings, the potential for a corporate tax rate cut this year or next, low borrowing costs, low inflation, and 4.3% unemployment.

Rogers is not alone.  I’ve been reading Doug Casey’s books and newsletters for 40 years.  He always seems to be predicting the next great crash.  Each morning, I get a Casey Daily Dispatch.  Here are four consecutive headlines from last week’s Casey dispatches.  They seem to crescendo in their level of fear:

Sunday, June 4, 2017: “The U.S. Economy is in for a Huge Shock”
Monday, June 5: “All Hell is Breaking Loose”
Tuesday, June 6: “Do These Three Things to Profit When Stocks Fall”
Wednesday, June 7: “The U.S. is Going to Have a Crash and It Will Be Massive”

--The opening headlines in the “Casey Daily Dispatch” (from Casey Research)

This perma-bear proclivity isn’t limited to maverick newsletter editors.  Economist Ed Yardeni wrote last Monday (in “Hannibal Spirits,” June 5, 2017) that he attended an investment strategists’ and portfolio managers’ conference the previous week and noted their concerns over stock price overvaluations, but, Yardeni added, “Most of them have been bearish on stocks since the beginning of the bull market.”

Specifically, Yardeni told CNBC last Friday that there have been 56 Wall Street “anxiety attacks” since the current bull market began.  “I’ve kept a diary of these things since March 2009,” he said on CNBC’s “Halftime Report” (June 9).  These anxiety attacks were most frequent early in the bull market, he said. Then, “I started to detect after we didn’t go over the fiscal cliff in 2013 that my clients were starting to get anxiety fatigue. They were just tired of being scared that we were going to fall into 2008 all over again.”

Last Friday, even though we had fallout from the poor showing of British Prime Minister Theresa May in the U.K. elections, and damaging testimony by former FBI Director James Comey regarding President Trump, the market shot up rapidly Friday morning while the CBOE volatility index dropped to its lowest point in over 23 years (since December 27, 1993).  According to CNBC, Friday marked the 17thday this year that this “fear index” traded below 10, “accounting for nearly half of the 35 occurrences on record going back to 1990.”  This indicates that many investors are getting as tired of the fear mongers as I am.

Global Mail:

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

Stock Market Chartology

by Ivan Martchev

In my experience, purely technical traders don't care for the fundamentals, and vice versa: Fundamental analysts don’t follow the technician’s playbook. Still, I have not met a single futures trader who does not know how to read a chart – and futures trading is a big business. While I don't dismiss charts out of hand, I need to know what is going on behind those charts – the fundamentals, if you will – to see how they play out on that chart. With that in mind, what is this chart of the popular S&P 500 Index saying?

SPDR Standard and Poor's 500 Exchange Traded Fund Chart

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

This is what an uptrend looks like – where the upward zigs are bigger than the downward zags, creating a series of higher highs and higher lows. Also, the popular 50- and 200-day moving averages are rising smoothly. They say that bulls live above the 200-day moving average and bears live below it. To qualify this trading maxim further, bears like to see a declining 200-day moving average, which clearly we do not have at the moment. It takes several intermediate-term sell-offs to turn a 200-day moving average lower.

In that context, we saw some interesting trading action on Friday. The SPDR S&P 500 ETF (SPY), which trades off the S&P 500 futures market and not the cash market, performed a rather interesting trading pattern called “an outside-down” day. You can see last Friday’s action in the final red bar on the chart above, which shows that the market opened up, made an all-time high ($245 on the SPY), and then saw an influx of sell orders that caused it to trade below Thursday’s lows and close below those lows.

An outside-down day is a short- or intermediate-term reversal pattern, suggesting that we may see a short- or intermediate-term correction. It certainly does not mean that “the world will end” in the bearish sense of the term. It is impossible to say at this point if this all-time high registered on Friday will be an all-time high that will stick for some time, or will be taken out after we complete this correction. All corrections in the past year ended in the vicinity of the 50- or 200-day moving average, which is a sign of a strong trend.

Fundamentally speaking, I see trouble brewing in the White House. Without sensible tax reform and an infrastructure program, I think that the chances of seeing a recession before President Trump is out of office in 2021 are close to 100%. This prediction is not a political statement but a statistical one. In the 240-year history of the United States there has never been an economic expansion longer than 10 years. Since we just completed Year 8 of the present economic expansion, I have a great deal of trouble figuring out how Mr. Trump will boost economic growth with a former FBI director (Robert Mueller) as a special counsel with all the resources of the FBI available, breathing down his neck. This has to be one of the all-time great presidential distractions. We are all innocent until proven guilty, but it sure fuels high ratings in the masterful first season of Trump’s new reality hit show, which I will dub The Presidential Apprentice.

Some Background on the Last Three Stock Market Crashes

Having a recession does not mean a repeat of 2008. I do not see the financial system in the kind of trouble we saw with the implosion of the mortgage market right at the time of the all-time high in October 2007, coupled with an inverted yield curve (for more, see my June 6, 2017 MarketWatch article, “The bond market is giving the stock market a stern warning”). While we don't have an inverted yield curve yet we have a flattening yield curve, which means the bond market is predicting a slower economy, most likely in 2018. This also means the bond market no longer believes the President's bombastic election promises.

Dow Jones Industrial Average from 2000 - 2010 Chart

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

The 2002 bear market (above) seemed severe, until we experienced 2008. The reason why a 2008-type decline is not probable now, even though the possibility can never be ruled out with 100% certainty, is that we need to have more than a recession for a stock market crash. Crashes of such magnitude have happened for very specific reasons three times in the last 100 years, specifically, 1929, 1974, and 2008.

Dow Jones Industrial Average from 1926 - 1936 Chart

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

In my opinion, the 1929-32 crash (above) is most similar to 2008 as both were credit-bubble driven. The difference is that in 1929 the Federal Reserve was clueless and added fuel to the fire by exacerbating the popping of the credit bubble with tightening of monetary policy at precisely the wrong time.

The other moronic maneuver was the Smoot-Hawley Tariff Act that was signed into law on June 17, 1930. Ultimately, the economic disaster catalyzed by the Smoot-Hawley Tariff Act helped FDR and the Democrats come into power and, in effect, repeal it with the Reciprocal Trade Agreements Act of 1934.

While it can successfully be argued that the Federal Reserve has learned from their Great Depression mistakes, this has yet to be determined when it comes to the present day political establishment.

Dow Jones Industrial Average versus Crude Oil Chart

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

The 1974 crash had to do with the oil price shock from the oil embargo and the Middle Eastern mayhem. While the Mideast mayhem part is still alive and well, we don’t have an oil embargo. In fact, the oil price is rather weak in what should be a seasonally strong period of the year. I am thinking that the start of a long-overdue economic downturn in China may be one reason for the drop in the price of oil this year.

Crude Oil Price Chart

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

The economic situation in the U.S. does not yet indicate a bear market ahead in stocks, but we are overdue for a correction. I think the global economic risk is centered on China first and Europe second, which raises interesting questions about the broken-down correlation of the MSCI Emerging Markets Index that has deviated from its long-standing correlation to the price of crude oil. It is my experience that those two can deviate sometimes but that correlation tends inevitably to reassert itself. If I were given the choice today to pick between the S&P 500 and the MSCI Emerging Markets Index, I would pick the S&P.

Sector Spotlight:

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

New Energy Sources are Nearly Infinite

by Jason Bodner

Energy is everywhere. It’s in the air, it comes from the sun, the plants, the wind, the water, and even from atoms. The trick is accessing it and converting it into something useful. A few years ago, my 10-year-old son impressively recognized this and set out to do a science project on the subject. He thought about his hot hand on a cool table one day and asked me this very simple question, “Can I make electricity?”

I replied “Yes,” since we have electricity in our bodies. He had identified one thermo-electric effect, the phenomenon of creating electricity simply by having a difference in temperature. Given enough of a temperature differential, electrons begin to flow and you have electricity. He developed a thermo-electric module – a superconductor in a ceramic housing with two wires for positive negative electron flow.

Sounding more complicated than it is, his display cost just $5, plus a $2 hobby motor. He placed one side of the module on a cold bottle of water. Warming his hands Mr. Miyagi style, he pressed his palm on the other side of the module and waited. Sure enough, the fan began to move and he was a human battery!

He generated about half a volt and realized that wouldn't do much work. Then he asked himself: What if we made a chair for students lined with these modules. There is space for 20 to 25 students per class. The number of students in Florida is 2.5 million and that could generate 12.5 million volts of power. All 50 states could provide enough juice to power half a gigawatt per year, lighting about 50 million LED lightbulbs. His notion reminded me of a kinder, gentler concept of The Matrix and it won him awards at his science fair. Great new ideas can come from anywhere – even from asking very simple questions.

Science Fair Palm Electricity Generator Photos Image

This leads me to comment on the tech sector. When asked to name executives or companies that currently dominate the tech sector, Elon Musk, Bill Gates, Tim Cook, Mark Zuckerberg, Larry Page, and Sergei Bryn come to mind. Innovation drives markets and global progress. Investors love to see new ideas, and they typically reward these ideas on speculation alone. Oftentimes stocks are snatched up on hype, lacking any evidence of a business plan (as with the Internet bubble of the late 1990s). We see it all the time. But what about when companies actually start to make money and begin firing on all cylinders?

We’ve seen a massive tech rally of 30.64% in the past 12 months. Unlike the internet bubble, this time it's built on the good stuff: Revenues and earnings. Everything was chugging along nicely until last Friday.  The tech sell-off was swift and unexpected, but others pointed out that the sector was simply overbought.

The media loves to seize on events like this and kick the hornets’ nest. One CNBC article was headlined, “The five biggest tech stocks lost nearly $100 billion in value on Friday.” The author accurately pointed out that these five big stocks lost over $97.5 billion in market value between Thursday’s close and Friday’s close, according to data from FactSet, “Dragging the NASDAQ to its worst week of the year.”

Standard and Poor's 500 Daily, Weekly, Semi-annual, and Yearly Sector Indices Changes Tables

Leaders (like Tech) Lead and Laggards (like Energy) Lag

Is there really cause for worry in tech stocks?

Leaders lead and the undisputed leader in the past 12 months has been Information Technology. It is natural for all rallies to become overheated at times. Friday’s sudden burp may indeed just be profit-taking. Looking at the weak performance of those top five stocks losing nearly $100 billion in one day, let’s remember that over the last 12 months those same stocks added more than $800 billion dollars of market cap. There was no sudden event that radically altered the landscape for strong tech stocks. In fact, earnings and sales have been performing wonderfully, and I would expect that trend to continue.

Laggards also tend to continue to lag. I’ve been picking on Energy for a month because the financial markets are a meritocracy. Energy has done little beyond improving its dismal earnings and sales. The uptick in crude prices from their lows seems to be over for now. Building on the weakness of the last two weeks, Wednesday saw a more than 5% drop in WTI crude. As the drop in physical commodity prices intensifies, we should see equities begin to follow suit. I suspect Oil and Gas exploration companies should be among the first to crack. In the energy destruction of 2014, they were the first companies to lead the energy equity sector lower, due to their leveraged nature and high reliance on an elevated physical commodity price to maintain margins. Look at XOP, the Oil & Gas Exploration ETF:

Standard and Poor's 500 Oil and Gas Exploration and Production Exchange Traded Fund Chart

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

Someday oil prices may not matter and we can all just become human batteries, like my son’s science experiment. For now, we have heavy reliance on energy from fossil fuels, which have been looking weak for a while. If prices break lower, it could have negative implications on the broader market. But tech remains the best in class, and I personally view any sort of pronounced sell-off as a buying opportunity.

Markets trend, as do individual stocks. If they didn't, it would be very difficult to make money. Trends often start small and then gather steam. We have been watching energy weakness for a while now. Tech weakness is very recent. Tech is most likely taking a natural breather before some more longer-term appreciation. Trends start small and, like great ideas, they can come from anywhere, at any time.

Thomas Fuller said it best in 1732: “The greatest oaks have been little acorns.” The trick is to know which acorns will take root and sprout, and which will just fall with a thud, feeding an opportunistic squirrel.

Squirrel in an Oak Tree 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.*

A Flattening Yield Curve May Give the Fed Second Thoughts

by Louis Navellier

The most fascinating development in financial markets is what is happening to the yield curve.  Ivan Martchev explained this trend in last week’s Global Mail column, which he then adapted as a post in MarketWatch last week, titled, “The bond market is giving the stock market a stern warning.

Essentially, Ivan pointed out that when the yield curve “inverts,” it has correctly predicted the past five recessions.  Although the yield curve has flattened considerably, it is not yet inverted; so it is not predicting a recession, but the flattening yield curve has reversed the trend in many of the “Trump trade” stocks.  Specifically, many of the financial, infrastructure, material, and some energy stocks that surged after the November election have fizzled as the yield curve flattened and inflation fears have dissipated.

Last Thursday’s UK Elections Could Also Flatten the Yield Curve

The aftermath of the British election on Thursday is that Brexit is going to be much more difficult now, due to a divided Parliament after Prime Minister Theresa May’s stunning defeat.  Prime Minister May had called for this election in order to try to get a bigger majority in Parliament, but she ended up hurting her own party by losing seats, so a new coalition government now has to be formed.  It is very possible that this new coalition government could force Prime Minister May out of her leadership position, since many of her closest allies have resigned and a new leader may emerge from her Conservative Party.

Capital flight may also further flatten the yield curve due to investors fleeing a weak British pound.  The yield curve has flattened more dramatically in Europe than in the U.S.  In fact, capital flight away from international markets seems to be the primary force pushing Treasury bond yields lower in recent months.

The next big event to impact the yield curve is expected to be the results of the Federal Open Market Committee (FOMC) statement tomorrow, June 14th.  Fed watchers like myself are expecting that the FOMC will say that inflationary pressures are ebbing, so the Fed may choose to postpone further key interest rate hikes until inflation re-emerges.  Either way, I expect that a very dovish FOMC statement could give the market a “second wind” since stocks remain a bargain relative to Treasury bond yields.


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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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