We're Seeing the Best Earnings

We’re Seeing the Best Earnings Growth Since 2011

by Louis Navellier

May 16, 2017

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

According to FactSet (in “Key Metrics,” May 12, 2017), 91% of the companies in the S&P 500 have reported their results for the first quarter, with 75% beating analysts’ earnings estimates and 64% beating sales estimates.  FactSet also says, “The blended earnings growth rate for the S&P 500 is 13.6%.”  If that rate holds, it will be “the highest year-over-year earnings growth for the index since Q3 2011 (16.7%).”

White House Image

With just 9% of S&P 500 companies left to report, Q1 is already the best quarter for earnings surprises in nine quarters and the best quarter for sales surprises in 10 quarters.  But the financial news media isn’t focusing on this great news, since they prefer to obsess about President Trump’s firing of FBI Director James Comey and a variety of other political sideshows, which have little or no bearing on stock prices.

In This Issue

It’s our job to cover the vital market news for you each week, not the Washington DC political sideshow; so this week, Bryan Perry dissects the economic indicators released last Friday and what they mean for income investors.  Gary Alexander takes a look at current U.S. and global GDP trends to show how the first quarter’s dip to 0.7% is misleading.  Ivan Martchev offers a plausible reason for last week’s market decline – due to politics “Trumping” any hoped-for progress in tax reform.  Jason Bodner uses Mother’s Day to toast what he calls the “Mother of All Sectors,” Information Technology.  Then, in the end, I will return to cover potential gains in small stocks in June and energy stocks over the summer months.

Income Mail:
What the Latest Economic Data is Telling Us
by Bryan Perry
A Soft Look at the Hard Data

Growth Mail:
Why 0.7% GDP Growth is Temporary and Misleading
by Gary Alexander
Will We See 3.6% U.S. GDP Growth in the Second Quarter?
Happy 225th Birthday to the New York Stock Exchange!

Global Mail:
More Trouble with the Trump Trade
by Ivan Martchev
Hope is Still Priced into the Market

Sector Spotlight:
How Can Markets Fall While Earnings Rise?
by Jason Bodner
Infotech – The Mother of All Sectors

A Look Ahead:
Look for a Small-Cap Stock Surge in June
by Louis Navellier
Time for Energy Stocks to Recover?

Income Mail:

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

What the Latest Economic Data is Telling Us

by Bryan Perry

As first-quarter earnings season is winding down, the question being asked by investors is what will keep the rally going? In Income Mail, I’ve been making a case for how and why this market rally and the larger economic recovery is not “long in the tooth” at all and is in fact still in the mid-expansionary phase of the business cycle, but the resounding report card of S&P 500 earnings is already priced into stocks. That is why we saw some consolidation late last week. It’s quite logical, well deserved, and very constructive.

At the same time, there are a few counter-intuitive developments going on that have confounded many pundits. The almighty dollar index (DXY), which had rallied a full 10% after the election, has retreated 4.8% while the left-for-dead euro has responded during the same period with a rally of 5.0%. All this comes while the Fed is tightening rates and the ECB is still pumping QE at a clip of 60 billion euros per month after reducing the program 20 billion euros in April. ECB President Mario Draghi insists that this isn’t “tapering,” but currency traders quite frankly don’t see it that way. Marco Valli, chief economist at UniCredit SpA in Milan noted, “All seems to suggest that by the end of next year, QE should be over,” (Bloomberg – March 30, 2017, “Draghi Dials Down ECB Stimulus as QE’s Distant Fate Debated”).

New York Stock Exchange Currency Shares Euro Trust Chart

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

In yet another quirky development, bond yields look to be going nowhere fast. In light of what can only be described as a robust earnings season that points to 3.0%+ growth for GDP for the second quarter, bond investors are in no hurry to jettison maturities on the long end of the curve. The yield on the 30-year Treasury closed last Friday at 2.99%, hardly a harbinger of what President Trump and Treasury Secretary Steve Mnuchin are forecasting as a reincarnation of the “Roaring ‘20s” (as in 2020-2029), when their tax plan is in full motion. Based on the latest popularity readings for Mr. Trump by his Capitol Hill cohorts, investors should be careful not to hold their breath about the passage of anything…anytime soon.

CBOE United States Thirty Year Treasury Yield Index Chart

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

A Soft Look at the Hard Data

Where oh where does this leave income investors, who target their investible capital for maximum safe income when there are clear signs of economic improvement both here and abroad? To me, it’s pretty clear that higher interest rates will take longer to materialize. This is a major positive for stocks and especially blue chip dividend growth stocks that pay out yields that cover the rate of household inflation while being taxed at a maximum rate of just 23.8% versus 43.4% for bond interest. Taking these two tax brackets into account, top income earners have to obtain an equivalent bond yield of 4% to match that of a qualified dividend yield of 3%. And the only bonds paying 4% now are those below investment grade. As a reference point, investment grade corporate bonds are paying on average 3.25% for 10-year maturities.

CBOE United States Ten Year Treasury Yield Index Chart

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

Yields on 10-year Treasuries topped out at 6.8% in early 2000 and have grinded lower since then despite some significant dips and rallies over the last decade. After the most recent reset, we’re in the midst of a proving-out period for the economy. At this point, focusing on the post-earnings-season economic calendar is key. Here’s a quick take at last week’s slew of data, most of them released on Friday:

  • Retail sales increased 0.4% (consensus +0.6%) on the heels of an upwardly revised 0.1% increase (from -0.3%) for March. Excluding autos, retail sales rose 0.3% (consensus +0.5%) after jumping an upwardly revised 0.3% (from +0.2%) in March. This puts consumer spending on a path toward being a much better contributor to second-quarter real GDP growth than it was in the first quarter.
  • Business inventories increased 0.2% in March (consensus +0.1%) following a downwardly revised 0.2% increase (from 0.3%) in February. Total business sales were flat after rising 0.2% in February. The key takeaway from this report is that business inventories remain elevated relative to sales, which is standing in the way of restoring pricing power.
  • Sentiment: The University of Michigan's Preliminary Consumer Sentiment Report for May checked in at 97.9, well above the consensus estimate of 96.5 and the final reading of 97.0 for April. My take: Consumers now enjoy some of the most favorable real income expectations in a dozen years, yet their buying plans were reportedly mixed. That disconnect seems to fit with the divide that has been seen between "soft" data, like this survey, and "hard" data like the personal spending report.
  • Inflation: The Consumer Price Index (CPI) increased 0.2% (consensus +0.2%) while the all-items CPI, excluding food and energy, increased 0.1% (consensus +0.2%). On a year-over-year basis, the all-items index was up 2.2%, versus 2.4% for the 12 months ended March. This is well above the 1.7% average annual increase over the last 10 years. The key takeaway from the CPI report is that consumer inflation pressures moderated a bit in April. That won't change the thinking that the Fed will raise rates at its June meeting, yet it could temper concerns about the Fed possibly needing to be more aggressive with its rate hikes (source: Briefing.com, May 12, 2017: Bond Market Update).

The response to this array of data has been a positive one for the Treasury market, as yields have pressed lower across the curve. The initial reaction to this data was that it reflected more of the same, which is to say it didn't point to an economy that was doing really great or really bad. All in all, it appears that Goldilocks still has a firm grip on the economic joystick. Accordingly, in my opinion, the economic data has tempered concerns about the Fed needing to be overly aggressive with its rate hikes this year.

The ratings war between the new season episodes of “House of Cards” (with Kevin Spacey playing President Frank Underwood, below right) and the ongoing reality show series of “The Apprentice in the White House” should provide viewers with plenty of suspense and surprises that keep us all guessing what could come next. Thankfully, summer is almost here and the signs for equity investors are being firmly planted on the beaches east of Wall Street in the Hamptons: “Come on in, the water’s fine.”

Kevin Spacey (

Growth Mail:

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

Why 0.7% GDP Growth is Temporary and Misleading

by Gary Alexander

How can this be the best earnings season in two years while at the same time Q1 GDP was a paltry +0.7%?”  -- Steve Reitmeister, Executive Vice President, Zacks Investment Research, May 2, 2017.

In Growth Mail, I take a close look at domestic and global growth statistics for clues to the market’s direction.  Many investors are questioning how the market and first-quarter earnings can grow so rapidly while economic growth is near zero.  Like any savvy analyst, Steve Reitmeister (quoted above) already had his answer in mind when he posed the question.  Here is his answer to the question he posed:

The world economy is rebounding, especially in Europe, Japan, and parts of South America. Even China is showing more pep in its step. Thus, with over 40% of the earnings for S&P 500 companies coming from outside the U.S., increased global growth is making up for the shortfall in the States.”

Let me take an analogy from sports.  In the current NBA playoffs, the San Antonio Spurs lost the first game of their best-of-seven series with their rivals in Houston, by 27 points – in San Antonio!  The next game, the Spurs lost their veteran point guard, Tony Parker, for the rest of the series.  Then, in Houston, they lost another game by over 20 points, and the next game they lost their best player, forward Kawhi Leonard.  This was a “perfect storm” of bad luck on an already-aging team, so what happened next?

San Antonio returned to Houston for Game Six and….won by 39 points!  What happened?  With the loss of their star, Kawhi Leonard, 10-year veteran LaMarcus Aldridge had the game of his life, scoring 34 and rebounding 12.  Two aging foreign-born players also stepped up their game, 39-year-old Spanish center Pau Gasol and 36-year old Argentine-born sixth man Manu Ginobli, while Australian-born Patty Mills filled in for French-born point guard Tony Parker.  In other words, their global talent pool rescued them.

There’s something about great coaching and tradition going on here, too.  Under coach Greg Popovich, the San Antonio Spurs have won five NBA titles in the last 18 years, just like the New England Patriots under Bill Belichick have won five Super Bowls in the last 15 years.  The Patriots won the 2017 title game despite having their injured star tight end out of the game and another in jail – after their quarterback was benched four games.  Neither Popovich nor Belichick will win points for good cheer – especially with the press – but they know how to motivate replacements to step up and win the key contests at season’s end.

In the same way, a healthy global economy relies on some countries and continents taking the lead when others suffer setbacks – or some sectors rallying while others fail – keeping the global engine running.

In this week’s statistical listings in The Economist (May 13, 2017), the only nation among the top 42 economies on earth that has a negative GDP rate in 2017 is starving Venezuela.  The two most populous nations on earth – China and India – are credited with 2017 GDP growth of 6.6% and 7.1%, respectively.

In recent years, the doomsday press has poured out special scorn on global growth – notably Europe, Japan, and emerging markets, led by China.  In the two key European elections held this year, moderate candidates won easily in Holland and France.  The latest data from Europe show that the euro-zone economies expanded by a 2% annual rate in the last two quarters.  In April, euro-zone manufacturing grew at its fastest pace in six years.  Also in April, the European Commission’s economic-sentiment index – based on surveys of service industries, manufacturers, builders, and consumers – rose to its highest level in a decade.  Europe’s Purchasing Managers’ Indexes (PMIs) are also up sharply since last August:

Manufacturing in Major Economies Continues to Expand Chart

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

Since 2009, the U.S. market has run laps around European stocks, but that trend has reversed this year. The European stock markets, as measured by the EMU MSCI, are up 11.6% in euros and 15.6% in U.S. dollars since the start of the year through May 8 (source: Yardeni Research, May 10, “Outperforming”).  The US MSCI is up only 7.3% in the same time frame – less than half Europe’s gain in dollar terms.

There’s a second reason not to worry about 0.7% U.S. GDP growth – that number may soon multiply!

Will We See 3.6% U.S. GDP Growth in the Second Quarter?

“There will be Growth in Spring.”

– Peter Sellers as Chance the gardener, addressing the U.S. President in “Being There” (1979)

Last year at this time, I showed how second-quarter growth statistics are usually the strongest of the year and first-quarter statistics are usually the weakest.  This happens year after year, yet economists and press pundits keep over-obsessing about slow first-quarter growth, only to be “surprised” by the spring revival:

Quarterly Gross Domestic Product Change Table

During the last 10 years, the middle two quarters have delivered over 90% of America’s net growth.

In last Monday’s morning briefing, Ed Yardeni noticed this trend: “…there has been a funky tendency for the Q1 numbers to be among the weakest ones since the start of the current economic expansion.”  That’s why Yardeni’s team gives “more weight to the year-over-year comparisons, which showed a gain of 1.9% over the past four quarters, consistent with the roughly 2.0% growth in this measure since 2010.”

The current quarter looks much better.  The Atlanta Federal Reserve bank’s GDPNow model projects the second quarter to accelerate at a 3.6% annual rate.  That would be a five-fold increase from the 0.7% figure in the first quarter.  Can we trust the Atlanta Fed?  Well, they were very close in predicting that the opening quarter of this year would be super-weak.  They forecasted 0.6% and 1Q came in at 0.7%.

The market should continue to follow the current earnings recovery.  In his Wednesday morning briefing (“Outperforming,” May 10, 2017), Ed Yardeni wrote, “Analysts’ consensus expectations in early May showed earnings growth for the S&P 500/400/600 of 11.4%, 10.5%, and 9.8% this year. Next year, they expect estimate growth rates will be 11.9%, 13.6%, and 19.8%.”  The S&P 500’s first-quarter earnings, mostly now in the books, show year-over-year gains of 13.9%, justifying the market’s lofty levels.

Happy 225th Birthday to the New York Stock Exchange!

The New York Stock Exchange was officially formed on May 17, 1792, under a buttonwood tree, outside 68 Wall Street.  On this date, 21 brokers and 3 firms signed “the Buttonwood Agreement,” which basically set a minimum brokerage commission and a preference for trading with member firms:

New York Stock Exchange Formation Image

“We the Subscribers, Brokers for the Purchase and Sale of the Public Stock, do hereby solemnly promise and pledge ourselves to each other, that we will not buy or sell from this day for any person whatsoever, any kind of Public Stock, at a less rate than one quarter percent Commission on the Specie value and that we will give preference to each other in our Negotiations. In Testimony whereof we have set our hands this 17th day of May at New York, 1792.” – The Buttonwood Agreement.

Global Mail:

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

More Trouble with the Trump Trade

by Ivan Martchev

The firing of FBI director Comey last week is bringing forth somewhat premature parallels with Richard Nixon. The parallels are premature as 20 people were convicted of criminal offenses relating to Watergate while Nixon was unconditionally pardoned by President Gerald Ford to save him from prosecution after he resigned (see “The Independent,” Richard M. Nixon, January 21, 2009). However, the Comey firing has put the Trump economic agenda in limbo. The firestorm raised the legitimate question: With the talk of special prosecutors digging for evidence, how is the president's economic agenda going to progress?

One indicator of the “Trump trade” – the expected shift into high gear of the U.S. economy because of the promised (but not yet delivered) tax cuts and deregulation – is the U.S. Treasury yield curve. Any way you slice it, the yield curve has flattened massively as the initial euphoria after the election wore off.

Ten Year Treasury Constant Maturity Minus Two Year Treasury Constant Maturity Chart

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

A popular measure of the yield curve – the 2-10 spread – went from 76 basis points (0.76%) on July 8, 2016 to 133 bps (1.33%) on December 22. Since then we have lost more than half of the yield curve gap, dropping as low as 100 bps (1%) on April 18 (chart, above). I realize that a discussion of the slope of the yield curve may be esoteric, but this is a $20 trillion indicator (the size of the U.S. Treasury market), which is telling us that the Trump policy agenda has ground to a halt. This particular president is a “come from behind” kind of guy and it is too early to write him off, but suffice to say that the same manner in which he won a low-odds election is not working nearly as well since he moved into the White House.

The slope of the yield curve is highly relevant to the banking sector, which was a standout in the rally that commenced after the Presidential election (see the late-2016 rise in the chart below). The banking sector’s initial lead in the relative bank index (reflected in the BKX/SPX chart below) has now paused and it is too premature to say if this is “the pause that refreshes” or “the end of an affair.” I think it will all depend on how fast President Trump can find his rhythm. So far, the jury is out on the Trump trade.

KBW Bank Index / Standard and Poor's 500 Large Cap Index Chart

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

Hope is Still Priced into the Market

Earnings Scorecard: As of today (with 91% of the companies in the S&P 500 reporting actual results for Q1 2017), 75% of S&P 500 companies have beat the mean EPS estimate and 64% of S&P 500 companies have beat the mean sales estimate.

Earnings Growth: For Q1 2017, the blended earnings growth rate for the S&P 500 is 13.6%. If 13.6% is the actual growth rate for the quarter, it will mark the highest (year-over-year) earnings growth for the index since Q3 2011 (16.7%).

Earnings Revisions: On March 31, the estimated earnings growth rate for Q1 2017 was 9.0%. Nine sectors have higher growth rates today (compared to March 31) due to upward revisions to earnings estimates and upside earnings surprises, led by the Industrials sector.

Earnings Guidance: For Q2 2017, 61 S&P 500 companies have issued negative EPS guidance and 29 S&P 500 companies has issued positive EPS guidance.

Valuation: The forward 12-month P/E ratio for the S&P 500 is 17.5. This P/E ratio is above the 5-year average (15.2) and the 10-year average (14.0).

So far this year, the S&P 500 is up way less than the 13.6% EPS growth last quarter. From a glass-half-full perspective, this means the market can go quite a bit higher if last week’s kerfuffle in Washington turns out to be a tempest in a teapot. From a glass-half-empty perspective, if what happened last week gathers momentum – with special prosecutors and the like – I believe that tax reforms will be delayed.

One major reason for the explosive nature of the stock market rally after the election was hope for tax reform, which is highly necessary, in my view. Tax reform is also one of the major reasons why stocks are trading at above-average valuations, even though they are not close to historic extremes. If tax reform fails to pass in 2017 – and it is starting to look that way – there will be many disappointed investors.

All this tweetstorm drama comes at a time when the U.S. economy is expanding for a far longer time than the historic norm. Next month will mark “year 8” of the present economic expansion (96 months), which is the third longest in recorded history. In such a mature economic expansion the question that needs to be asked is: Can we beat the all-time record of 120 months, or 10 years, from March 1991 till March 2001?

Business Cycle Duration Table

My answer: Under the right tax reform and deregulation plan, a record recovery looked possible as of January 21, 2017. Nearly four months into Trump’s first term, my answer is that I simply don't know.

Sector Spotlight:

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

How Can Markets Fall While Earnings Rise?

by Jason Bodner

Mother’s Day is firmly in the rearview mirror. With the Sunday Morning political talk shows obsessed with politics, however, it seems that honoring our mothers is certainly worthy of some revisiting here.

Mother’s Day developed slowly from its roots in Greek and Roman spring festivals honoring mother goddesses, but the modern “Mother’s Day” owes its biggest debt to Anna Jarvis. While she had no children, she wanted to honor her own mother’s wish of having a day for mom. She lobbied determinedly and at last on May 8th, 1914, President Woodrow Wilson signed a Joint Resolution designating the second Sunday in May as Mother’s Day. So now we celebrate typically with flowers and pampering.

This contrasts with former Yugoslavia, where kids would tie up their mother on Mother’s Day. The only way she could get free would be to pay her way out with treats. Others deface themselves, some badly:

Mother's Day Defacement Image

For many of us, Mother’s Day is a time of joy. The pleasure of this arguably underrated holiday may have provided many families with a brief respite from the daily onslaught of troublesome news headlines last Sunday, but stunning events keep emerging from Washington DC on an hourly basis. The latest stories will have ripples that remain to be seen, but one thing is for sure: The world is watching.

Political headlines are dominating every outlet. The financial media are devoting a significant amount of their time to the impact of the DC circus, but they aren’t giving equal time to positive sales and earnings reports that have been truly impressive and should be making investors quite happy with their results.

Despite these lofty earnings, the market was less than jubilant last week. Although NASDAQ posted a respectable weekly gain of +0.34%, the remaining broad-based indices were mostly negative, with the S&P 500 falling -0.35%, the DJIA off -0.53%, and the Russell 2000 down over 1% (-1.02%).

Overall, this may be a much-needed pause due to profit taking as earnings season winds down, but there were bright spots. Last week and throughout earnings season, Information Technology was the leading sector in terms of earnings with well over 80% of reporting firms beating estimates, and 77% beating sales estimates. In fact, eight sectors had more than 70% of their companies beating estimates. This either means the bar of expectation was set pretty low, or things are genuinely improving. Telecommunications Services, while the smallest sector, remains the largest disappointment of this earnings season (so far).

Standard and Poor's 500 First Quarter 2017 Earnings and Revenues Estimates Bar Charts

Infotech – The Mother of All Sectors

This top earnings sector – let’s call it the Mother of All Sectors – has also been the overall best sector in terms of performance for one-week, month-to-date, and for 3-month, 6-month, 9-month, and 12-month performances. This may not “feel” like an Infotech bonanza, but that sector continues to be on fire.

Last week, I happened to be studying the relative strengths of the Russell 1000 Index on a very short-term basis. The results were interesting, in that Financials and Consumer Discretionary stocks yielded amongst the lowest Relative Strength Index (RSI) readings. This makes sense given the poor performance for financials and retail throughout the week. Despite the weakness, Consumer Discretionary is the second strongest sector for three months. The three weakest sectors are Financials, Telecom, and Energy.

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

It’s worth noting – although you have likely heard this already – that the CBOE Volatility Index (VIX) closed at its lowest levels in nearly a quarter century last Monday. This is significant because extremely low levels on the VIX are often thought of as a precursor to an uptick in volatility.

CBOE Market Volatility Index Chart

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

Loosely translated, low VIX means trouble ahead in many people’s minds. Specifically, I recall one standout period of low volatility 10 years ago – in the spring of 2007 – when one-day volatility on the S&P 500 hit 4. Traders who relied on volatility were all complaining and agonizing. Needless to say, the housing crisis began shortly thereafter and volatility soared. Be careful of what you wish for!

Is this new 24-year low in the VIX a sign of choppy waters ahead? Will the catalyst come from Washington? Or is it smoother sailing ahead as companies will have reported and the summer lull begins? Which sector will lead the way? As we look at the Mother of All Sectors (Infotech) chugging along, it brings to mind an anonymous quote: “Life doesn’t come with a manual, it comes with a mother.”

Moms Rule 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.*

Look for a Small-Cap Stock Surge in June

by Louis Navellier

After peaking at a record high over 2,403 early last Tuesday, the S&P 500 dropped 0.35% last week.  To me, that seems like a pause before the storm – the interim between earnings reporting season and window dressing season. Specifically, I see three specific engines I expect to push small-cap stocks higher in June.

June will be a pivotal month for small-capitalization stocks, since the annual Russell index rebalancing occurs in late June.  Furthermore, at the end of each quarter, equally-weighted ETFs are rebalanced, which translates to even more buying pressure for small capitalization stocks.  The amount of money pouring into equally-weighted ETFs in turn causes small capitalization stocks to “melt up” on persistent order imbalances.  Finally, June is also the end of the second quarter, so institutional investors will be doing a lot of window dressing in the last week of June.  That’s a 1-2-3 “punch” supporting small-cap stocks in June, so I expect that the “melt up” we’ve seen recently in small-cap stocks will continue in June.

At the same time, we have seen the lowest volatility in 23 years based on the CBOE’s VIX index.  Last Monday, I was on CNBC to comment on this lack of volatility, which I attributed to the attractive 1.95% yield on the S&P 500, which draws investors into stocks whenever a normal correction comes along.

Time for Energy Stocks to Recover?

In addition, I see an opportunity in energy stocks.  Crude oil prices melted up last week as crude oil inventories tightened.  Specifically, on Wednesday, the Energy Information Administration (EIA) announced that U.S. crude oil inventories declined by 5.2 million barrels in the latest week, the largest weekly drawdown since December.  Furthermore, the EIA also announced a surprise decline in both gasoline and distillate inventories that should also help to shore up the prices for refined products.

Essentially, it now appears that the higher seasonal demand as the weather improves is clearly underway.  As a result, many energy-related stocks are firming up fast, since high seasonal demand during the summer months will help to keep crude oil prices high until seasonal demand drops in September.


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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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