Thanksgiving Week Rewarded Us

Thanksgiving Week Rewarded Us Bountifully, As Expected

by Louis Navellier

November 28, 2017

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

U.S. stocks notched another record high last week with the S&P 500 closing above 2600 for the first time ever, rising almost 1% for the week. That’s the second-fastest climb to another 100-point milestone in S&P history. You have to go back to the 35-trading-day surge in February/March 1998, when the S&P raced from 1000 to 1100 for a faster rise in round-number hundreds in S&P 500 history. The NASDAQ composite also hit a record Friday at 6889 and the Dow Industrial index hit a record high last Tuesday.

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Last week, I quoted our friends at Bespoke Investment Group, whose research shows how Thanksgiving week tends to kick off some historically strong rallies. Specifically, in their “Stock Seasonality” report (November 20, 2017), they showed how “the S&P’s median return from the close on 11/20 through 12/4 over the last ten years has been a gain of 1.36% with positive returns for ten straight years! That’s right, even during the midst of the credit crisis back in 2007 and 2008, the S&P 500 managed to trade in the black during the upcoming two-week period.” So…enjoy your Thanksgiving leftovers for another week!

In This Issue

In Income Mail, Bryan Perry argues that the flattening yield curve can be bullish for stocks, in that it reflects global demand for U.S. bonds, not fears of a recession. In Growth Mail, Gary Alexander compares ancient threats of Japanese dominance (now somewhat laughable) with similar warnings of Chinese dominance today. Ivan Martchev argues that the Fed’s time clock is running out on rate increases and tightening schemes, while Jason Bodner tells us why he’s still riding the tech surge, even after a 16-month 44% surge in the sector. Then, in the end, I cover Black Friday, Germany, and the Fed’s dilemma.

Income Mail:
Yield-Curve Flattening Continues with Strong Demand for U.S. Bonds
by Bryan Perry
The Base Case for Risk Assets Remains Sound

Growth Mail:
Will China Conquer the World (Like Japan Didn’t!?)
by Gary Alexander
The 21st Century May End with No Super-Power

Global Mail:
58 Basis Points to Zero
by Ivan Martchev
The U.S. Dollar: Down in 2017, Up in 2018?

Sector Spotlight:
The Cheap Car That Goes Everywhere
by Jason Bodner
Isn’t Technology Getting a Bit Pricey

A Look Ahead:
Holiday Sales Begin with a Great Black Friday
by Louis Navellier
The Germans (and the Fed) Call for a Reboot

Income Mail:

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

Yield-Curve Flattening Continues with Strong Demand for U.S. Bonds

by Bryan Perry

Conventional wisdom would have you believe that a flat yield curve is an indication that investors and traders are worried about a coming recession. But from several vantage points, the U.S. economy seems to be doing just fine. Growth, for the most part, has been trending upwards; the job market continues to shine; and inflation is becoming less of a worry for the Federal Reserve.

The flattening yield curve suggests that everything may not be as rosy as it seems. Last week’s Treasury market saw a continuation of the longstanding yield curve flattening as longer-dated maturities remained firm while the 2-year note recorded another weekly loss with 2-year futures posting their eighth weekly decline in the past 10 weeks. As a result, the 2/10 spread compressed by 10 basis points (bps) to 60 bps.

FlatteningYieldCurve.jpg

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

The continued curve flattening has been noticed by analysts and policymakers alike, but Fed officials have been quick to attribute the flattening to international demand for Treasuries stemming from sovereign yield differentials, rather than concerns about a slowdown in U.S. economic growth. The most glaring case in point is the 198-point spread between the 10-yr U.S. Treasury and the 10-yr German Bund.

With the Federal Reserve not showing much concern over the flattening yield curve from recent interviews with Fed officials, the market remains certain that the FOMC meeting on December 12-13 will produce a decision to increase the fed funds target range to 1.25% - 1.50%. The implied likelihood of a larger (50-basis point) rate hike remains at a slim 8.5% for the third consecutive week. Also, there was no significant change in inflation expectations as the 5y5y forward rate remained just below the 2.00% mark.

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A quick glance at what the rest of the world offers in the way of sovereign bond yields tells the story. Within Europe, Greece is the only country with debt paying a higher yield than the U.S. In the Asia Pacific region, only Australia, New Zealand, and South Korea offer a slight yield advantage; and then one can always roll the dice on bigger yields (7% or more) being offered by Mexico, Brazil, and India.

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So, rather than raising a red flag of a looming recession due to rising long-bond demand, I’d argue that foreign central banks and institutions awash in liquidity and freshly-minted currency are continuing to pounce on U.S. government debt like a cat on tuna. And until wage inflation shows up in a material way, the yield curve will remain flat. That in turn should feed the stock rally further.

The Base Case for Risk Assets Remains Sound

Although the current bull market is the second longest in history, and will become the longest next if it lasts until next August, the technical landscape supporting the case for a higher stock market is sound. The 2-year yield has been working higher for the past few months and, contrary to popular belief, a flattening yield curve that does not invert has historically been a precursor to very strong equity returns.

Quite frankly, I’m not sure why the talk of yield curves still gets so much attention. The Bank of Japan in essence eliminated the yield curve altogether. Core inflation in Japan is near zero and the BOJ has stated that it is committed to an over-shoot of 2.0% inflation, which means that they are committed to keeping the yield on the long end of their yield curve down for a very long time. In Germany, there is no yield curve and the ECB has said that it will be printing money until the fourth quarter of 2018.

The world’s most powerful central banks manage their various yield curves, so I’m not sure why we are even talking about concepts from the 1970s and 80s – when they were market driven. Today, central bank policy determines the yield curve. In my view, the Fed is content with a flattish yield curve. The cost of mortgages and credit is attractive these days and the U.S. is one country that can ill afford higher interest rates against its $20 trillion mountain of federal debt and expected higher deficits in the near future.

In light of the expectation of tighter Fed policy coming next month, I just don’t see the cause of a major market downturn on the horizon. I think equity investors will shrug off a quarter-point rate hike. The breadth of the latest rally has been very broad-based. It’s not just large caps. This past week, mid-caps made new highs, small-caps made new highs, and we saw rallies led by many stocks, not just a few.

The current market action is consistent with the middle innings of a nine-inning bull market, so investors should look to ride the back of this bull well into 2018 with a high level of confidence. 

Growth Mail:

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

Will China Conquer the World (Like Japan Didn’t!?)

by Gary Alexander

If you live long enough, you see it all. Fresh out of college 50 years ago, I was a cub reporter writing in breathless prose about the next economic supergiant on the world scene. In December 1967, I turned in my first major economics article to a national new magazine. Titled “Japan: Industrial Supergiant,” I began by saying, “Japan’s economic rebirth is nothing short of phenomenal.” While Western nations were satisfied with a 2-3% yearly growth, I said Japan averaged a “10% yearly increase for over a decade!”

Looking back, that sounds an awful lot like what I wrote about China when I first visited there in 1996, as does this paragraph – about all the things which Japan led the world in making – way back in 1966:

“Japan is #1 in production of ships, motorcycles, transistor radios, quality cameras, and sewing machines. She is a close second or third in such all-important industries as steel, chemicals, automobiles, paper, and electronics.  Japan lost 2,568 ships during World War II [but] for 12 consecutive years, Japan has led the world in tons launched, now amounting to 47% of world production. In 1968 Japan may be able to produce more than all the rest of the world combined!”

In the following paragraph, I sounded a lot like our Jason Bodner in using astronomical measurements to explain how big one of Japan’s latest tankers was – one with 210,000-deadweight ton (DWT) capacity:

“In December 1966, the latest behemoth was launched, the Idemitsu Maru, a 210,000-DWT capacity tanker, measuring 1,122 feet in length (longer than the Eiffel Tower is high), and generating 100,000 horsepower. Just how much is 210,000 tons of oil? It staggers the imagination! The Idemitsu Maru could hold enough gasoline to drive 750 cars to the moon and back, AND enough kerosene to cook a big breakfast for every person on the face of the earth (and have enough left over to cook dinner for everybody, too) and enough diesel fuel to drive 900 heavy trucks around the world at the equator, and still have enough fuel left in its hull to generate electricity to light all the light bulbs in Japan for two weeks!”

Clever writing for a cub reporter, wouldn’t you agree? In fact, I’m surprised that bit survived the editor’s knife. In that article, I also predicted Japan’s future dominance of the automobile industry in the 1970s: “Japan just passed West Germany in the spring of 1967 to become the world’s second largest producer of automobiles.… Datsun and Toyota were up 77 percent and 100 percent respectively for imports during the first half of 1967. This is just the beginning of Japanese infiltration of Western markets!”

My point in rehashing all this in 2017 is that we have come a long way from 1967. Japan’s economy and stock market peaked in the late 1980s when the world thought they could dominate the world by the 21st century, but for a variety of reasons, Japan went into a 25-year slow-growth tailspin starting in 1990.

JapaneseRealGDP-Growth.jpg

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

Japan’s real GDP averaged 9.5% from 1950 to 1970, then 4.2% from 1970 to 1990, then under 1%. Now, China is the new darling of super-growth. But will China fare better than Japan? Or will some other new contender enter the world scene and leave China in the dust like China has done to neighboring Japan?

The 21st Century May End with No Super-Power

So far, China has maintained its rapid annual growth rates longer than Japan did, but they have “slowed” to the 7% range recently. I believe they can avoid Japan’s fate since they are more flexible than Japan and they have demonstrated their capitalist DNA, despite their nominally communist government. For instance, the “overseas Chinese” tend to be the business and financial leaders in the Asian rim nations, so I don’t think the Chinese will suffer any long-term 20-year Rip Van Winkle snooze like the Japanese did.

Here’s a 35-year chart of China’s super-growth and a more recent three-year run of 6.9% average growth:

ChinasGDP.jpg

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

It would be a mistake to focus on China alone. China is the leader, but before China took off in the 1980s, the four Asian Tigers emerged. Hong Kong, Singapore, South Korea, and Taiwan all underwent rapid industrialization starting in the 1960s with 40+ years of rapid annualized growth rates in excess of 7%.

FourAsianTigers.jpg

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

Manufacturing plants sprang up in the Four Tigers first, before China. When wages rose there, plants in China sprang up. When wages in China rose earlier in this century, many plants moved to Thailand, Vietnam, and other lower-labor-cost enclaves. As the planet gets richer, no nation can claim to be a low-cost labor outpost for long. Workers will demand more wages and benefits and the plants will move on.

Also, India has created a specialized niche providing English-language services for U.S. companies.  Unlike China, India does not have a one-child policy and will likely become the most populous nation on earth with barely one-third the land mass of China. But India cannot hold their most talented people. College-educated Indians are skilled and well-educated in medicine and technology. They will migrate to where they are most in demand. The same is true of Chinese college students, most of whom are trained in the STEM disciplines – science, technology, engineering, and math – those disciplines most in demand on the world scene today. U.S. students who elect self-indulgent majors with no marketable applications will inherit high debts and few job offers while graduates from overseas will gladly lap up lucrative jobs.

In time, Latin America, Central Asia, and Africa will improve economically, too. In short, the 21st Century will belong more to individuals with skills and smart companies than super-powers, but any nation that practices enlightened free-market policies will prevail. Those that close their borders and minds will fail.

Global Mail:

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

58 Basis Points to Zero

by Ivan Martchev

The way I start writing these columns is not particularly scientific. I look at the major moves in stocks, bonds, currencies, and commodities and see what jumps out. Sometimes there are moves that don't quite fit my outlook, which offer plenty of material for reflection. At other times it’s “the same old, same old,” particularly in a holiday-shortened trading week like Thanksgiving, which historically tends to be very light volume and tends to be rising. In that regard, the stock market did not disappoint us last week.

YieldCurve.jpg

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

One noteworthy event did happen, however, in the bond market, where the Treasury yield curve registered another multi-year low. The slope of the Treasury yield curve, as measured by the 2-10 spread, is rapidly approaching zero after which barrier we have the rather uncomfortable territory of an “inverted yield curve,” or a situation where the 2-year Treasury note yields more than the 10-year Treasury note.

NoteYieldVersusGovernmentBond.jpg

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

Yield curves do not invert by themselves. Somebody had to invert them and in this case that someone is the Federal Reserve. This is because changes in the fed funds rate directly affect the 2-year note yield which is now rising faster than the 10-year note yield, hence the yield curve shrinkage.

Previously, when the Federal Reserve threw cold water on the Treasury yield curve with its fed funds operations causing it to retract like “a frightened turtle,” we had the market set long-term interest rates, so the rising 2-year note yield (courtesy of Fed open market operations) and the falling 10-year note yield (courtesy of investors’ reaction to the Fed action and the outlook for a slowing economy) met in somewhat natural fashion as Fed policy became more restrictive. Today, because the Fed meddles in the long-term interest rates market with its QE operations and pregnant balance sheet, you would think that they could engineer less yield curve reduction by letting long-term interest rates rise faster. One way to do that is by letting more bonds from its balance sheet mature without getting their principal amounts reinvested, or a run-off rate higher than the present $10 billion monthly rate.

I think we will get a fed funds rate hike at the December FOMC meeting and we will hear more about how that pregnant central bank balance sheet run-off rate will increase. This is why I am a little surprised at the calm in the Treasury market. If the Fed can engineer some yield curve re-steepening by allowing a higher run-off rate, they may want to do that if only to push back on investor psychology. Investors are well aware that an inverted yield curve has preceded every one of the last five recessions, which is why they dread the present shrinkage of the Treasury yield curve slope.

BalanceSheet.jpg

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

There should be no shortage of bonds to run off. At last count, the Fed’s balance sheet decreased to $4.418185 trillion on November 13 from $4.420808 trillion in the previous week. The Fed balance sheet’s all-time high is $4.473860 trillion in February 2015. Before QE operations started, the Fed had a tad over $800 billion on the balance sheet. Right now, the Fed is a little over $55 billion below its all-time balance sheet high, so it will be a long and winding road before that balance sheet shrinks by much.

I don't think the Fed has much time to engineer true balance sheet reduction. The present economic expansion started in June 2009, so that makes it 101 months long as of this week. There are only two other expansions in the history of the United States that lasted longer than 100 months. One ran from 1961 to 1969, the other from 1991 to 2001. Considering that statistical distribution of recessions and expansions, the Fed doesn’t have much time left to engineer significant balance sheet reduction.

The next recession is unlikely to be as bad as the 2008 Great Recession as there is no present problem in the financial system as serious as the mortgage bond leverage that was decimating bank balance sheets back then. In fact, there have been only two other declines as serious as 2008 – in 1929 and 1974. Only the 1929 decline is similar to 2008 because of the financial system leverage that caused it, but since the policy response in 2008 was very different, with no monetary policy tightening and no trade wars as per the infamous Smoot Hawley Tariff Act as in the 1929 case, we avoided another depression.

Since the Fed is unlikely to be as aggressively involved in the markets due to the likelihood that the next recession is likely to be less severe, perhaps they don’t have to balloon their balance sheet as much this time. Still, it boggles the mind to think how a central bank would go about unwinding a $4.4 trillion balance sheet without crashing the Treasury market.

The U.S. Dollar: Down in 2017, Up in 2018?

For all intents and purposes, 2017 was a down year for the U.S. dollar due to the unwinding of the euro disintegration trade after a wave of pro-EU election victories. Since the euro is the biggest U.S. Dollar Index component, it is natural to see the euro rally. What is not natural is to see the dollar decline when the Fed is tightening and the ECB is easing, even though that tightening has been in baby steps.

It is surreal to watch how the U.S. dollar has failed to rally heading into the assumed December fed rate hike. While we did see a rebound off the multi-year lows set in September, the greenback has given up some of that rebound. I think the dollar should rally quite a bit more and take out the multi-year high of 103.21 set January 3, 2017. As of last Friday’s close, the U.S. Dollar Index is 92.76, down 10.1% YTD.

DollarIndex.jpg

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

The other reason for the decline in the dollar this year has been the complete unwind of the Trump trade in the bond market, where the initial yield curve steepening after the November 2016 Presidential election completely disappeared and then some in 2017. I am all for “making America great again,” but there has to be some semblance of reality between President Trump’s bombastic election promises and his ability to rally his own party in order to put promises into action. There are no signs of improvement in the rocky relationship between the GOP’s leadership and their own President, suggesting more of the same in 2018.

Sector Spotlight:

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

The Cheap Car That Goes Everywhere

by Jason Bodner

Most of the time we go through our everyday lives without giving much thought about the origins of things we see every day. Take for instance that the U.S. military produced almost 650,000 utility vehicles between 1941 and 1945. That’s roughly 500 a day for the duration of World War II. These vehicles weighed 2,000 pounds; they drove over anything, were virtually indestructible, and resisted any kind of weather. They were ubiquitous in the war – in the jungles of Asia, the deserts of Africa, the forests of Europe, and the beaches of the Pacific. They were called the “Jeep,” which rhymes with “cheap.”

Jeeps were produced at $650 a pop, vs. a single tank, which set back Uncle Sam a hefty $35,000. Ironically, $35,000 in 1941 equates to $600,000 in today’s dollars, so tanks were cheap, too. Modern estimates for a tank built from scratch today comes in around $8.5 million! No matter how you measure it, when asked to pick a single symbol of cost-effective military hardware, the Jeep wins hands down.

These days, we usually associate Jeeps with rugged mountain fishing trips in TV commercials, or more realistically, soccer moms hauling around kids (or dads stuck in gridlock commutes). But back in the war, the Jeep was a workhorse with an endless job description: It was a towing truck mounted with a machine gun, an artillery vehicle, a medivac, and a transport. The Jeep did it all and it went everywhere.

JeepClimbingSteps.jpg

Where did the name come from? The first known use of the word Jeep appeared in the Washington Daily News on February 19, 1941, in which the journalist said that the GIs had chosen the name after seeing a picture of the Willys reps driving the Jeep right up the stairs of the Capitol Building (pictured above).

The origin of name Jeep, however, is actually mired in dispute and controversy. It was originally and blandly known as the Willys Overland Model MB, made in Toledo. Ford eventually manufactured a variant known as “Model GPW.” Therefore, one prevailing theory was a slurring of “G-P” or “general purpose” vehicle. Another story has Army general George Lynch yelling out “jeepers!” during a rough road test! Some used to refer to the Jeep’s bare bones configuration as “just enough essential parts.”  Another lingering theory is that Popeye’s faithful sidekick, “Eugene the Jeep,” was the inspiration, because he went everywhere. Any way you slice it, the name “Jeep” was eventually trademarked, as seen below.

EugeneTheJeep.jpg

So, here’s the real question: Why am I talking about Jeeps instead of stocks? The answer is that we look at past events to give us a more informed framework for the present and perhaps better preparation for the future. I was once again approached by a friend this weekend. He asked me: “Hey Jason, are you still bullish on tech?” I replied that I am, indeed. He asked, “You don’t think it’s getting a little ‘up there’?”

This is a great opportunity to relate my answer:

Isn’t Technology Getting a Bit Pricey

In answering his question, I described how I observed a significant breakout in the S&P 500 Information Technology Sector Index long ago, in late July of 2016. The sector vaulted to the top of the leadership table starting in August of 2016. This is an excerpt from my Sector Spotlight on August 6th, 2016:

“If we look at the sectors, there is interesting evidence to lend credibility for the thesis of a sustained rally.  This currently really boils down to two sectors: Infotech and Healthcare.  Info tech has been leading for a month now, and we are starting to see signs of life in life sciences.”

This was essentially when we began talking about the merits of the Infotech space. August 5th, 2016 saw the sector index close at 781.24. Friday saw the index close at 1122.93, a rally of nearly 44% in about 16 months! The fundamentals are backing up the sector in spades: Earnings and sales growth are strong. Valuations may be lofty (in some cases), but the P/E for the last 12 months is 21.3 vs 19.8 on the S&P 500 Index, according to FactSet, and similarly the next 12 months P/E is 19.4 vs 18.1 on the S&P 500.

Another metric I like is sales growth: One-year sales growth on the Info tech index is 7.7% vs 5.7% on the S&P 500, while EPS growth is 18.9% vs 10%. 83% of Infotech companies beat revenue estimates and 89% beat earnings estimates. So, I’ll turn my friend’s question around: Why NOT be bullish on tech? The sector is +1.76% for the past week, +13.33% for three months, +17.08 for six months, and +39% YTD.

Yes, I am still bullish on tech until something in the data suggests a material change.

Looking at other sectors, Financials, Materials, Real Estate, and Health Care continue to be six-month runners-up, while Energy is still a focus in the past three months. Energy exhibited 135% 1-year earnings growth and 19.8% 1-year revenue growth as of Q3’17. This growth trend is expected to continue in Q4.

StandardAndPoors500SectorIndices.jpg

In a world ruled by moment-to-moment data, there is great power in letting longer-term trends reveal themselves, and then develop and continue over time. Information Technology is a perfect example. How that impacts us is unique to each individual, but looking at where strength and weakness emerge over time is universal to investors. Know where you’ve been, and you will know better where you’re going.

As George Santayana put it beautifully: “Those who cannot remember the past are destined to repeat it.”

A Look Ahead:

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

Holiday Sales Begin with a Great Black Friday

by Louis Navellier

After a year of fearing Amazon and other ecommerce outlets taking over the world, retailers had a strong weekend.  Black Friday sales were apparently so strong that they overwhelmed Macy’s credit card payment system, which failed.  In fact, Adobe Analytics is forecasting that Cyber Monday will be the largest shopping day in U.S. history.  Black Friday’s sales are estimated at $33 billion, according to Customer Growth Partners, a 4.8% advance over Black Friday last year.  Shares of Amazon also soared, reaching an all-time high of $1,186 on Friday, so on-line sales are also rising.  Cyber Monday’s sales are also anticipated to be strong.  The National Retail Federation expects November and December sales to rise about 4% to $682 billion this year.  Clearly, this holiday shopping season could break all records.

Looking forward, the Conference Board announced that its index of Leading Economic Indicators (LEI) surged 1.2% in October, which bodes well for accelerating GDP growth.  Clearly, the recovery from three major hurricanes and the devastating fires in Northern California helped improve the LEI from a 0.1% rise in September to a 1.2% surge in October. All 10 LEI components rose, which is actually quite rare. Naturally, the strong LEI and economic outlook also bode well for a strong holiday shopping season. (Please note: Louis Navellier does currently hold a position in Amazon in Mutual Funds. Navellier & Associates does currently own a position in Amazon for client portfolios).

The Germans (and the Fed) Call for a Reboot

Germany’s Chancellor Angela Merkel announced last week that she cannot form a ruling coalition in Parliament and called for new elections.  I was in Europe last week and the perception is that Merkel may be forcing members of Parliament to try to get along by shaming them into holding a new election.  Nonetheless, like the U.S., when governments do not function properly due to gridlock, businesses often prosper.  With 3.3% annual GDP growth in the third quarter, Germany is leading the entire euro-zone and will likely remain its strongest economy due to its robust export growth thanks to a strong global economy.

Back in America, Fed Chair Janet Yellen announced that she will retire in February. In addition, the Fed on Wednesday released the minutes of its latest Federal Open Market Committee (FOMC) meeting in which the FOMC used ambiguous language to say that they still had doubts that low inflation would persist.  However, the FOMC minutes also said that “many” Fed officials still viewed raising rates in December as “warranted.”  This double-speak is tantalizing regarding their future actions.

The flattening yield curve may be causing the Fed to rethink their rate-raising policies, but I still expect the Fed will increase key interest rates at their December FOMC meeting – but I also expect a big stock market rally if the Fed confirms that this could be their last key interest rate hike of the current cycle.


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.

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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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