Earnings Season Delivers Second-Straight Spectacular (24%+) Gains

Excerpt from Louis Navellier's Marketmail - 08/21/2018

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This week basically wraps up earnings season and it looks like it will be the second straight quarter of 24%+ earnings growth. On Thursday, NVIDIA (NVDA) announced better-than-expected second-quarter sales (up 39.9%) and earnings (up 91.3%!). NVDA is my largest holding and it has now exceeded analyst expectations for 12 straight quarters, which is truly amazing. Unfortunately, the company lowered third-quarter sales guidance to $3.19 billion, down from $3.32 billion previously estimated due largely to the fact that its crypto data mining sales are now immaterial. Although NVIDIA beat analysts' estimates in all other sales categories, there was an adverse reaction to the crypto news. Frankly, I never invested in NVIDIA for its ancillary crypto data mining sales so in my opinion the stock remains an outstanding buy! 

NVIDIA's stock should firm up fast, just like Home Depot (HD) did after briefly consolidating after its better-than-expected second-quarter results. Home Depot on Tuesday announced better-than-expected second-quarter sales (up 8.4%) and earnings (up 31%) while raising its 2018 guidance. Initially, Home Depot stock consolidated, but then it firmed up in subsequent days. The moral of this story is that better-than-expected sales, earnings, and guidance are working, even though it sometimes happens with a delay. 

The dollar is strong while the Turkish lira is collapsing, and the Chinese yuan continues to decline. In the past three months, the yuan is down 8% to the U.S. dollar. This has been unfortunate for the Chinese ADRs that I had recommended, so I have sold most of them, despite their continued strong sales and earnings.

Navellier & Associates owns Home Depot & NVIDIA in both managed accounts, a sub-advised mutual fund and in family accounts."


In This Issue of Marketmail (Click Here to Read)

Thursday is an important day, with U.S./China trade talks, the last large list of second-quarter earnings releases, and the Kansas City Fed's annual meeting in Jackson Hole, Wyoming. First, Bryan Perry digs deep into the "end game" strategies of the coming U.S./China trade talks, while Gary Alexander looks at history for clues that may emerge from the Jackson Hole talks. Ivan Martchev turns his attention to gold, in light of the negative correlation between gold and the strong U.S. dollar. Jason Bodner addresses the all-important question of price: Should we look for low-priced bargains or winners on the rise? In the end, I'll return to look at the China trade talks and the global economic outlook in light of the Turkey crisis.

Income Mail:  

Trump's Constrictor Strategy Begins to Pay Off  

Trump's Master Plan - To Destabilize and Weaken China?

 by Bryan Perry

  

Growth Mail:  

Market Clues Point to a Strong "Final Third" of 2018  

Watch China Trade Talks and Jackson Hole for Major Market Cues

by Gary Alexander

  

Global Mail:  

What's Behind Gold's Dip to $1,160?

The Broad Dollar Index is Much Stronger

by Ivan Martchev

 

Sector Spotlight:  

Does a Higher Price Mean Higher Value?

Weekly Winners Vary, But Long-Term Winners are Consistent

by Jason Bodner

 

A Look Ahead:  

China May "Blink" First in the Trade War Talks  

Germany and the U.S. Seem Untouched by the Turkey Crisis

by Louis Navellier