The Dreaded Day of Decision

The Dreaded Day of Decision Has Finally Arrived

by Louis Navellier

November 8, 2016

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

Election Day is finally here!  Prior to Monday’s huge rally, the S&P 500 had declined nine sessions in a row – the longest losing streak since 1980, according to FactSet.  But losing streaks always end, as Chicago Cub fans can tell you after 108 years of waiting.  Going into Monday’s market opening, the market was heavily oversold, but it rallied strongly on the expectation that Hillary Clinton will likely win on Tuesday, due in part to the FBI retreating from its previous promise to look more closely into her email accounts.   I feel the market is poised to continue rising as soon as we have a clear decision at the polls tomorrow.  (Like most Americans, I hope there will not be endless recounts in some key swing states.)

Your Vote Matters Image

We are also in the midst of third-quarter earnings announcement season.  We have seen some profit taking in the wake of some better-than-expected sales and earnings; but I would like to remind you that good stocks often bounce back quickly while bad stocks are slower to recover, especially when their forecasted sales and earnings are trimmed.  As always, I counsel super-selectivity when it comes to stock selection.

In This Issue

In Income Mail, Brian Perry examines the market’s recent losing streak and the emergence of a buying opportunity in REITs.  In Growth Mail, Gary Alexander looks at what generally happens to the market in the first year of a new presidency.  In Global Mail, Ivan Martchev updates crude oil price trends and the Brexit vote – including how it may be unwound.  In Sector Spotlight, Jason Bodner outlines reasons why the sectors may start to establish clearer trends after the election.  Then, I will close with a look at what worked best in October and what the latest economic tea leaves say about the Fed’s decision in December.

Income Mail:
The Market Needs a Cubs-Like Rally
by Bryan Perry
Blood on REIT Street

Growth Mail:
The Market Will Fall…and then Rise Again
by Gary Alexander
A Tentative Look into America’s Future

Global Mail:
UK High Court’s Curve Ball
by Ivan Martchev
Another Crude Oil Downturn

Sector Spotlight:
Don’t Read This Column!
by Jason Bodner
All 11 S&P Sectors Declined Last Week

A Look Ahead:
This Market is Oversold – Expect a Post-Election Rally
by Louis Navellier
The Fed Delayed their Decision Until December

Income Mail:

*All content in "Income Mail" is the opinion of Navellier & Associates and Bryan Perry*

The Market Needs a Cubs-Like Rally

by Bryan Perry

Before last week, only five baseball teams had rallied from a 3-1 win-loss deficit to win the World Series. By beating Cleveland last week, the long-suffering Chicago Cubs became the sixth such team. The last time this happened was in 1985, when the Kansas City Royals rallied to beat the St. Louis Cardinals.

Using baseball terminology, the stock market is in a deep batting slump, having finished out last week hitless in nine straight games, or – in stock terms – nine straight daily losing sessions. Mr. Market is in desperate need of a fresh hitting streak so that we can mount the normal kind of year-end comeback.

Seasonals Turns Bullish in Fourth Quarter Chart

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

After the re-opening of the FBI investigation into Hillary Clinton’s emails, the polls tightened and what had been a complacent market landscape – one that seemed to reward an upbeat third-quarter earnings season – suddenly turned very sour at the notion of a possible Trump upset. A Trump win brings with it a massive reset of trade deals, international treaties, overhauling healthcare again, big changes in the tax code, immigration policy, foreign policy, government regulations, and targeted federal programs.

Good, bad, or indifferent, investors big and small aren’t prepared for what is now a very possible and huge upset for the White House that has triggered massive outflows in mutual funds and the selling of equities across the board, as investors clamor to raise cash. The great unknown of how the market will react in the short term is a fearful catalyst that is stoking investor jitters. The S&P 500 closed Friday at 2,085, down 2% from 2,126 a week ago. All 11 S&P index sectors declined last week, with technology, telecommunications, energy, and consumer staples posting the biggest drops, down more than 2% each.

Treasury yields had been steadily rising even as stock prices were coming under pressure, but as of last Tuesday the flight to safety in U.S. Treasuries became evident as the 10-year T-note yield fell from 1.88% to close out the week at 1.78%. Still, the mild rotation back into government-backed fixed income vehicles did not help stem the slide in bond-equivalent equity sectors like utilities, telecoms, and REITs.

Friday’s jobs data showed wage growth ticking higher along with upward revisions for the prior two months that all but solidified the expectation of the Fed raising short term interest rates at their December FOMC meeting. This foregone conclusion has contributed greatly to the recent REIT sell-off.

Blood on REIT Street

Shares of the widely-held Vanguard REIT ETF (VNQ), generally considered a bellwether of the entire REIT space, have sliced through their 200-day moving average like a hot knife through butter. REITs are entering territory not seen since the January-February timeframe, as shown in the following chart:

Vanguard REIT Exchange Traded Funds Chart

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

One indicator investors should keep a close eye on is insider purchases by officers and directors of REIT companies. Shares of VNQ are down 15.17% from their August high to Friday’s close and the sector is enduring a correction. I believe a full 20% decline is very possible in this very nervous trading landscape. (Please note: Bryan Perry does not currently own a position in VNQ. Navellier & Associates, Inc. does not currently own a position in VNQ for any client portfolios. Please see important disclosures at the end of this letter.)

When insiders start buying large chunks of beaten-down shares of their own companies, it has historically been a sign of value. On November 2nd, a Director of a major REIT bought 50,000 shares of the company’s stock, spending over $4.4 million of his own money. This purchase is not considered huge by any standard, but it does raise eyebrows when high quality assets have been steeply discounted. Baron Rothschild, an 18th century British nobleman and member of the Rothschild banking family, is credited with saying that “The time to buy is when there’s blood in the streets.” Maybe it’s time to start sniffing around on REIT Street.

Growth Mail:

*All content in "Growth Mail" is the opinion of Navellier & Associates and Gary Alexander*

The Market Will Fall…and then Rise Again

by Gary Alexander

“You can always count on the Americans to do the right thing … after they have tried everything else.”

--Winston Churchill

I don’t think the market will like the outcome of this election – either way.  Hillary Clinton and Donald Trump are massively unloved, even hated, but this sense of violent partisanship has been escalating over the last generation.  There was also great vitriol greeting the Presidencies of George W. Bush and Barack Obama.  New Presidents tend to be scary, especially when their ethics and overt actions fall far short of nobility.

If the results of today’s election seem clear and beyond dispute, we might see some year-end relief rallies and the normally positive holiday-fueled year-end market surge, but leading market indexes may decline in the first half of 2017 as we weigh the new President’s rhetoric and action.  Still, the lesson of history is that the market will rise again.  It always has.  Even then, I anticipate a generally sub-par year in 2017:

Four-Year Presidential Cycle: Average Annual Stock Market Gains Bar Chart

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

  • Going back to 1833, The Almanac Investor calculates that the average first year of a Presidential cycle gains less than 2.5%.  The post-election year is the worst year of the Presidential cycle.
  • Since 1833, the market has declined 24 times during the first calendar year of the new President’s term.  It has risen only 19 of 46 first Presidential years, with one year of no change.

The market tends to decline under a new President since the market likes to see predictability.  A new President in the previously-out-of-favor Party tends to bring surprises.  But after a year or so, the market (and the voting public) realize that the President is not all-powerful.  He (or she, this time) cannot fulfill all their gaudy election-year promises of new programs to take care of every imaginable voter’s desire.

Here are the six times in the last 50 years when an opposing-Party candidate beat the incumbent’s Party:

Markets When Opposing Party Candidate Beat the Incumbent Table

The two exceptions on this list came under the last two Democratic Presidents – Bill Clinton and Barack Obama.  This gives rise to the general belief that the market performs better under Democrats than under Republicans, but the truth is a little more nuanced than that.  History shows that political “gridlock” is best for investors, since it limits the harm the federal government can do.  The best bull market of our lifetime came from 1982 to 1999, under a Republican President Ronald Reagan fighting a Democratic Congress (1981-89), after which Democrat Bill Clinton had to fight a Republican Congress (from 1994 to 2000).

This winning formula seems to favor a Hillary Clinton victory, as long as the Republicans retain control of Congress, but this same winning scenario might also work if Trump wins.  Trump is not your normal Republican.  Much of the Republican leadership has repudiated him.  As a result, a Republican Congress may resist Trump’s measures – as if he were a Democrat.  Ironically, this is good for the stock market.

After the new President’s brief honeymoon, the market (and voters) will start to look toward the 2018 mid-term elections – a time when voters can (and often do) mandate a major political course-correction.  This has happened dramatically in recent years – namely, during the Republican Revolution of 1994 and the 2010 Republican Congressional surge in reaction to President Obama’s major spending programs.

The market surged notably after November 8, 1994, when the Republicans won control of both the U.S. House and the Senate for the first time in 40 years.  The stock market liked this news.  After a 1.5% decline in 1994, the S&P 500 gained at least 20% per year for each of the next five years – 1995 to 1999.

A Tentative Look into America’s Future

For the last 10 years and more, I have been honored to moderate the closing political panel, the “Summit on America’s Future,” at the New Orleans Investment Conference.  This year, the participants were all voting differently.  Economist Stephen Moore of the Heritage Foundation is an advisor to Trump and is voting for him.  Libertarian comic P.J. O’Rourke has bypassed the third parties to vote for Hillary Clinton as “the devil we know.”  Most surprisingly, conservative columnist Charles Krauthammer is not voting for either major candidate, or anyone else.  He said that he will probably write in a name like Paul Ryan.

Krauthammer said Trump “is a liberal trying to sound conservative.”  If Trump wins, he fears Paul Ryan will be forced out of his leadership role in Congress since Trump says Ryan “betrayed” him.  Whether Trump wins or not, Krauthammer thinks that the “populist wing” will be a permanent fixture of the GOP.

P.J. O’Rourke, as expected, was more light-hearted in his faint praise of his choice, Hillary Clinton.  He expressed what I suspect is a majority opinion – that she is the second-worst candidate, but she’s better than Trump.  “She’s wrong about absolutely everything, but she’s wrong within normal parameters.”

Stephen Moore offered a stunning series of charts on “The Coming American Boom,” referring to the energy boom that will make America self-sufficient, if our politicians don’t get in the way.  Moore says that there is no comparison between the tax plans of the two major candidates.  Trump’s top capital gains tax rate will be 20%, while Hillary’s will be 46%, implying far greater growth potential under Trump.

Regardless of who wins, Moore said Americans are choosing their own future by migrating to states with lower taxes and a more business-friendly environment.  Among our four largest states, he showed how net out-migration was over one million in a recent 10-year period (2003-12) in high-tax California and New York, with similar million-person migrations into Texas and Florida – which have no state income tax.

Top Domestic Migration States Chart

When Moore debated liberal New York Times columnist Paul Krugman on this trend at Freedom Fest last year, Krugman argued that such migration is “all about the weather.”  Moore granted that there is a well-established pattern of New Yorkers migrating to Florida for the weather, usually in retirement, but what sane person would move from San Diego to Houston “for the weather”?  This recent mass migration from California to Texas, he said, is about favorable tax and regulatory treatment of businesses and individuals.

No matter who wins, Moore argued, Americans will continue to seek to create a prosperous future for themselves and their families.  I agree, and I believe that fact will lead to the market’s inevitable recovery.

Global Mail:

*All content in "Global Mail" is the opinion of Navellier & Associates and Ivan Martchev*

UK High Court’s Curve Ball

by Ivan Martchev

While many had forgotten that the UK Brexit referendum was non-binding – which means that it must be ratified by a vote in Parliament – the new Prime Minister Theresa May was acting like that was not the case. She lost in a UK High Court hearing on the matter last week. The Court reminded her that a vote is necessary, as a matter of law. While it is possible that the House of Commons will vote against Brexit, as politicians may be a bit more sensible than the rural population that voted for leaving the EU, it becomes a very odd situation for politicians that campaigned against Brexit to vote for it in Parliament. (In this map of the UK, the deeper the blue, the higher percentage voting to remain in the EU last June 23rd.)

Brexit Referendum Vote Shading Image

The UK High Court’s decision may trigger a parliamentary crisis, with the odds of holding a new election before the infamous Article 50 is triggered becoming somewhat likely. (Article 50 of the 2007 Lisbon agreement contains a short 250-word passage about how a nation may exit the European Union.)

After the High Court, there is only the Supreme Court in the UK, which (unlike the 225-year-old U.S. Supreme Court) has only been in existence since 2009. Before that, the top justices were called Law Lords and were part of the unelected House of Lords for the previous 600 years. Now, there are justices on UK’s Supreme Court that are not “Lords,” even though six centuries of history is difficult to forget.

It is not certain when this hearing will take place in the UK’s Supreme Court. If all is finalized before March 2017 (which was originally the Article 50 trigger date for UK’s government), and Parliament votes against Brexit, the UK will likely hold a snap election.

Value of the British Pound Chart

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

The net result of all this drama is that the British pound – or “cable,” as traders like to call it from the days when FX quotes travelled over telegraph cables on the ocean floor – had a “dead cat bounce” last week. (A dead cat bounce is a trading term for a brief rebound in what otherwise is a pretty strong downtrend.)

There are signs that many companies are already diverting investments away from the UK and that even London’s famous property market is beginning to stumble. That suggests that the cable rate is headed lower if Article 50 is triggered, with or without a parliamentary vote.

Have the economic repercussions been enough for the House of Commons to vote against Brexit? That’s hard to say at this point; but if they vote for Brexit, the pound will likely depreciate further – I’d say $1.05 is a good target – while the UK may end in a recession courtesy of the signals from the EU that sweetheart trade deals are unlikely. It looks like the choice being put before the House of Commons is between a “hard” (no trade deal) Brexit or no Brexit at all.

With last June’s Brexit vote, I’d say Britons shot themselves in the foot, so this requirement for a vote in the House of Commons may give them an opportunity to change their minds. If Parliament votes against Brexit, however, it is unlikely that the damage already done on the UK economy will be magically reversed. Thousands of companies have already altered their business planning because of it and that will take time to reverse. Then the question remains: What happens if there is another referendum?

United Kingdom Ten-Year Government Bond Chart

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

This legal and parliamentary mess means that the backup in UK’s long-term interest rates is likely temporary. While the 10-year gilts yielded as little as 0.52% last summer and they are presently at 1.14%, I still think that the odds of them turning negative are very high, even if the House of Commons votes against Brexit. The Brexit referendum introduced a level of uncertainty in the British economy that will take time to shake off. While it lasts, the situation there is likely to become even more deflationary.

Another Crude Oil Downturn

With all the drama in the crude oil market – along with the rising number of U.S. rig counts taking advantage of the rebound in prices since the spring – there has been a significant weakening in crude prices over the past two weeks. December 2016 WTI Crude Oil futures closed at $44.07 on Friday.

If Crude oil follows historical and seasonal patterns it is likely headed way below $40/bbl this winter. An ultimate target that undercuts the $26/bbl low from early 2016 is not out of the question. The only thing standing in the way is the troop movements around Aleppo and Mosul that have not become front-page news yet, mostly due to the non-stop news about the Presidential election cycle in the U.S.

Crude Oil Chart

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

I think the only development standing in the way of oil going to $20/bbl (or lower) is the geopolitical mess in Iraq and Syria that holds the potential for spilling outside of the present boundaries of the conflict. Other than that, demand is weak and supply is strong. Any decline of crude oil volumes in the U.S. has been picked up by increased production in Iran, while the Chinese economic picture gets murkier and murkier.

China is the #1 consumer of oil. I am surprised that we have not heard more bad news from the mainland, even though we have not heard much good news, either. I think China is experiencing the effects of a busted credit bubble, which is likely to result in a nasty recession, which is negative for crude oil prices.

Russian Ruble Versus Crude Oil Chart

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

This latest downturn in oil raises an interesting question about the Russian ruble, or “рубль” as the Russians call it. The USDRUB cross rate has been as low as 85 and as high as 62 this year (the rate is inverted so more rubles per dollar means a weaker ruble). If oil takes out $40/bbl, the ruble is likely to take out 70. If we see the crude oil price at $20/bbl someday it is likely that the USDRUB cross rate will be at 100.

While I can't imagine that many readers of this column hold rubles as a store of value, the latest developments in the crude oil market suggest that the rout in commodities is not over. Another commodity markets decline carries serious consequences for the energy sector in the U.S. and for currencies, as well as debt and equity markets for many emerging economies globally.

Sector Spotlight:

*All content in "Sector Spotlight" is the opinion of Navellier & Associates and Jason Bodner*

Don’t Read This Column!

by Jason Bodner

Let’s be honest. No one really cares what I write about today: It’s Election Day! There is really only one thing on the minds of pretty much all Americans, and many other global citizens, too: Who is going to be our next President? The level of anxiety surrounding this election certainly feels unprecedented.

This election has inflamed tensions, and served to polarize the country. It feels as though our passionate opinions are propelling the nation into mitosis, instead of serious, unbiased analysis. But if we look back on history, we’ll see that, while this is certainly the least civilized election in recent history, there were plenty of shocking items dotting voting outcomes and disputed elections over the decades.

Republican and Democratic Dancing Mascots Image

  • George Washington blew his entire campaign budget on 160 gallons of liquor to serve to potential voters. He ran unopposed.
  • During the 1872 election, Ulysses S. Grant ran against a corpse. His opponent, Horace Greeley, died before the election was finalized. Grant won the election, by the way.
  • The Democrat donkey came from Andrew Jackson. When critics called him a “jackass” because of his populist views, he embraced the image, using it alongside his slogan, “Let the people rule.”
  • According to a 2016 report about voter turnout in developed countries, 53.6% of Americans voted in the 2012 election, which places the U.S. 31st out of 35 OECD nations. Belgium saw the highest percentage of eligible voters turn out for its 2014 election, with 87.2% of Belgians voting.
  • Every Australian over 18 is required by law to register to vote and to participate in federal elections. Anyone who doesn’t show up on Election Day is fined.
  • Charles D.B. King, President of Liberia, won an election with 234,000 votes in 1927, which sounds great but there were only 15,000 registered voters in Liberia. This election entered the Guinness Book of Records for the most fraudulent election reported in history.
  • In the Middle Ages, the Swedish town of Hurdenburg elected its mayor by seeing which candidate’s beard was selected by a louse.
  • Saddam Hussein used Whitney Houston’s “I Will Always Love You” as his campaign song in 2002.

Saddam Hussein Singing Campaign Image

Now, on to the market sectors – if anyone is still reading:

All 11 S&P Sectors Declined Last Week

We all know the S&P 500 has fallen nine days in a row – the first time since 1980. Not surprisingly, all 11 sectors were negative last week. The market’s leader for the past few months, namely Information Technology, was last week’s biggest loser. Along with Info Tech, Energy, Consumer Staples, and Telecommunications all finished with performance below -2%. The only sectors with any sparks of life were yield-intensive Utilities, and Real Estate – on Monday only. Those gains were given back Tuesday and Wednesday. My own institutional distribution meters have been increasing. In fact, for the past 10 days, since October 25th, unusual institutional selling has outnumbered unusual institutional buying 6 to 1.

Standard and Poor's 500 Daily and Weekly Sector Indices Changes Tables

The three-month picture also looks ugly. All 11 sectors have a negative three-month performance record. The “least bad” sector has been Financials, closely followed by Energy. These two sectors have been beleaguered by scandals, fines, and simple supply/demand issues, such as the crude oil glut, so it still is a bit surprising that they are the leading sectors for the last three months.

Health Care, Real Estate, and Telecommunications are the bottom-dwelling sectors for the last three months. (Again, we need to take into account the disproportionately small number of stocks within the Telecom sector.) Real Estate is under siege as yield-sensitive securities seem to be on watch with a potential rate hike on the horizon once the election has been resolved. Health Care continues to face pressure in the wake of anxiety over implications for the industry should Clinton win the election.

Standard and Poor's 500 Quarterly Sector Indices Changes Table

The six-month performance derby looks more upbeat. As a whole, the S&P 500 is just slightly over flat, trading up 1.34% for the past six months. The tug of war within the sector groups becomes clear when we look at the leaders and laggards. Tech leads and Telecom lags, while #2 Financials offset #10-Health Care.

Standard and Poor's 500 Semi Annual Sector Indices Changes Table

My obvious conclusion is that the market’s immediate future depends on the outcome of today’s election. A Trump win has heavy implications on trade. A Clinton win can hurt health care. But the truth is that the uncertainty in the market may not end after the presidential election. The market’s recent action seems to reflect that fear. Perhaps all of this election rhetoric, global discontent, and general sour environment accounts for the spike in cat videos; cute animal memes; and those fuzzy, sweet, oddball animal friends:

Oddball Animal Friends Butting Heads Image

I for one am tired of all the negativity. People want to see positive things start to happen again. But if you haven’t voted yet, don’t let the opportunity slip. Heed the words of Abraham Lincoln, “Elections belong to the people. It's their decision. If they decide to turn their back on the fire and burn their behinds, then they will just have to sit on their blisters.” The choice is clear, folks: Ken Bone for President!

Ken Bone for President 2016 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.*

This Market is Oversold – Expect a Post-Election Rally

by Louis Navellier

Last Tuesday, Bespoke documented the market’s major trends during October.  In their “October Decile Analysis: Value Outperforms Growth” (November 1, 2016), Bespoke said that the S&P 500 fell by “only” 2% last month, but “Small-cap indices like the Russell 2,000 and S&P 600 fell double that with drops of 5%.”

In their decile analysis of the S&P 500 stocks, they reported that the stocks that fared the worst in October (-6.12%) were the top 10% best-performing stocks year-to-date through September 30th.  Meanwhile, the biggest winner – if you can call it that, rising only 0.8% – were those stocks with the lowest P/E ratios.  If you look at the entire S&P 500, the 100 stocks with the lowest P/E ratios rose 0.2% in October while the 100 stocks with the highest P/E ratios declined by 5.2%, providing a clear advantage for lower-P/E stocks.

Clearly the stock market remains very rotational in nature, looking for direction, perhaps after the election.

Since 1931, there have been 21 previous times when the S&P 500 posted a losing streak of eight days or more.  Over the following 12 months, the index rose an average 14.2%.  Here are the last four occurrences, showing that the S&P rose an average of almost 30% in the year after a losing streak of 8 or more days:

Standard and Poor's 500 Twelve Months Later after Losing Streak Table

Please note that the last two instances were during the Presidential election campaigns of 1996 and 2008.

The Fed Delayed their Decision Until December

Buried in the middle of last week’s election mania, the Fed announced on Wednesday that it would keep key interest rates unchanged at 0.25%.  The majority (8-to-2) vote of the Federal Open Market Committee (FOMC) reflected their decision to defer action to the December FOMC meeting.  Specifically, the FOMC said, “The committee judges that the case for an increase in the fed funds rate has continued to strengthen but decided for the time being to wait for some further evidence of further progress toward its objectives.”

The Fed says their decision remains “data dependent,” so let’s calculate the outlook for a mid-December rate increase based on the latest data, including the most-watched data point each month – the jobs report.

Last Friday, the Labor Department announced that 161,000 new payroll jobs were created in October.  This was a slight disappointment, since economists expected 173,000 payroll jobs would be created in October.  However, the August and September payrolls were revised up by a combined 44,000 jobs, which is very encouraging.  Average hourly wages rose 0.4% to $25.92 per hour and are now rising at a 2.8% annual pace, so the wage growth that Fed Chair Janet Yellen had been anticipating appears to have materialized.

Workers Image

I should also add that on Wednesday, the folks that do payroll processing, namely ADP, reported that only 147,000 private sector jobs were created in October, the slowest monthly pace since last May.  This puts the Fed in a dilemma – hourly wages are finally rising sufficiently, but the new job totals are falling off.

The other big news last week came from the Institute of Supply Management (ISM).  On Tuesday, ISM announced that its manufacturing index rose to 51.9 in October, up from 51.5 in September, reaching the highest level in the past three months.  However, only 10 of the 18 industries surveyed reported growth.

In the service sector, ISM announced on Thursday that the index fell to 54.8 in October, down from 57.1 in September.  That was disappointing, but any reading over 50 signals an expansion, so the service sector is still doing fine.  Fully 13 of the 18 industries surveyed reported growth in their respective businesses.

We’ll know more about the inflation picture next week, but there are conflicting forces cancelling each other out now: On the deflationary side, oil prices are once again declining, and the Energy Information Administration (EIA) reported that crude oil inventories rose by the largest weekly gain ever, +14.4 million barrels.  On the inflation side, ISM quoted a health industry executive saying there is “uncertainty as to the ongoing status of the Affordable Care Act and the impact it is having on individual costs.”  The overall inflation picture is mixed, but the headline rate will probably be under the Fed’s target rate of 2%.


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IMPORTANT NEWSLETTER DISCLOSURE: The performance results for investment newsletters that are authored or edited by Louis Navellier, including Louis Navellier's Growth Investor, Louis Navellier's Breakthrough Stocks, Louis Navellier's Accelerated Profits, and Louis Navellier's Platinum Club, are not based on any actual securities trading, portfolio, or accounts, and the newsletters' reported performances should be considered mere "paper" or proforma performance results. Navellier & Associates, Inc. does not have any relation to or affiliation with the owner of these newsletters. There are material differences between Navellier & Associates' Investment Products and the InvestorPlace Media, LLC newsletter portfolios authored by Louis Navellier. The InvestorPlace Media, LLC newsletters and advertising materials authored by Louis Navellier typically contain performance claims that do not include transaction costs, advisory fees, or other fees a client may incur. As a result, newsletter performance should not be used to evaluate Navellier Investment Products. The owner of the newsletters is InvestorPlace Media, LLC and any questions concerning the newsletters, including any newsletter advertising or performance claims, should be referred to InvestorPlace Media, LLC at (800) 718-8289.

Please note that Navellier & Associates and the Navellier Private Client Group are managed completely independent of the newsletters owned and published by InvestorPlace Media, LLC and written and edited by Louis Navellier, and investment performance of the newsletters should in no way be considered indicative of potential future investment performance for any Navellier & Associates separately managed account portfolio. Potential investors should consult with their financial advisor before investing in any Navellier Investment Product.

Navellier claims compliance with Global Investment Performance Standards (GIPS). To receive a complete list and descriptions of Navellier's composites and/or a presentation that adheres to the GIPS standards, please contact Navellier or click here. It should not be assumed that any securities recommendations made by Navellier & Associates, Inc. in the future will be profitable or equal the performance of securities made in this report. Request here a list of recommendations made by Navellier & Associates, Inc. for the preceding twelve months, please contact Tim Hope at (775) 785-9416.

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

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

Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any securities recommendations made by Navellier. in the future will be profitable or equal the performance of securities made in this report.

Dividend payments are not guaranteed. The amount of a dividend payment, if any, can vary over time and issuers may reduce dividends paid on securities in the event of a recession or adverse event affecting a specific industry or issuer.

None of the stock information, data, and company information presented herein constitutes a recommendation by Navellier or a solicitation of any offer to buy or sell any securities. Any specific securities identified and described do not represent all of the securities purchased, sold, or recommended for advisory clients. The reader should not assume that investments in the securities identified and discussed were or will be profitable.

Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalized recommendation to you. Individual stocks presented may not be suitable for you. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. Investment in fixed income securities has the potential for the investment return and principal value of an investment to fluctuate so that an investor's holdings, when redeemed, may be worth less than their original cost.

One cannot invest directly in an index. Results presented include the reinvestment of all dividends and other earnings.

Past performance is no indication of future results.

FEDERAL TAX ADVICE DISCLAIMER: As required by U.S. Treasury Regulations, you are informed that, to the extent this presentation includes any federal tax advice, the presentation is not intended or written by Navellier to be used, and cannot be used, for the purpose of avoiding federal tax penalties. Navellier does not advise on any income tax requirements or issues. Use of any information presented by Navellier is for general information only and does not represent tax advice either express or implied. You are encouraged to seek professional tax advice for income tax questions and assistance.

IMPORTANT NEWSLETTER DISCLOSURE: The performance results for investment newsletters that are authored or edited by Louis Navellier, including Louis Navellier's Growth Investor, Louis Navellier's Breakthrough Stocks, Louis Navellier's Accelerated Profits, and Louis Navellier's Platinum Club, are not based on any actual securities trading, portfolio, or accounts, and the newsletters' reported performances should be considered mere "paper" or proforma performance results. Navellier & Associates, Inc. does not have any relation to or affiliation with the owner of these newsletters. There are material differences between Navellier & Associates' Investment Products and the InvestorPlace Media, LLC newsletter portfolios authored by Louis Navellier. The InvestorPlace Media, LLC newsletters and advertising materials authored by Louis Navellier typically contain performance claims that do not include transaction costs, advisory fees, or other fees a client may incur. As a result, newsletter performance should not be used to evaluate Navellier Investment Products. The owner of the newsletters is InvestorPlace Media, LLC and any questions concerning the newsletters, including any newsletter advertising or performance claims, should be referred to InvestorPlace Media, LLC at (800) 718-8289.

Please note that Navellier & Associates and the Navellier Private Client Group are managed completely independent of the newsletters owned and published by InvestorPlace Media, LLC and written and edited by Louis Navellier, and investment performance of the newsletters should in no way be considered indicative of potential future investment performance for any Navellier & Associates separately managed account portfolio. Potential investors should consult with their financial advisor before investing in any Navellier Investment Product.

Navellier claims compliance with Global Investment Performance Standards (GIPS). To receive a complete list and descriptions of Navellier's composites and/or a presentation that adheres to the GIPS standards, please contact Navellier or click here. It should not be assumed that any securities recommendations made by Navellier & Associates, Inc. in the future will be profitable or equal the performance of securities made in this report. Request here a list of recommendations made by Navellier & Associates, Inc. for the preceding twelve months, please contact Tim Hope at (775) 785-9416.

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