This Week Launches the Best Quarter of the Market Year

Excerpt from Louis Navellier's Marketmail - 10/02/2018

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According to research by Bespoke Investment Group, October has been the #1 stock market month in the past 20 years, and this year will likely get an added boost from strong quarterly earnings announcements. November is also a strong month (#3 of 12) and I expect the market to surge this year after the uncertainty of the mid-term election is resolved. Thanksgiving is also a seasonally strong time of year, when an early “January effect” typically begins, and finally, due to the highest consumer confidence in 18 years, I am expecting a record holiday shopping season, so it appears that we should have an excellent fourth quarter.

This is what I like to call “lock and load” time, when all investors should be fully invested.

I should add that, according to TrimTabs, $827 billion in stock buybacks have been announced so far this year. Furthermore, if stock buyback activity continues to rise in the fourth quarter, it is likely that we will reach $1 trillion in stock buybacks in 2018. The fact that the S&P 500 has not risen as much as its record earnings has caused P/E ratios to plummet, which encourages even more corporate stock buybacks. 

By reducing share totals, this aggressive stock buyback activity is significantly boosting earnings per share. The chart illustrates that the record stock buyback pace has picked up in second quarter.

To learn more about how the stock market is physically shrinking via stock buybacks and fewer listings, I recommend that you read our latest white paper, Honey, I Shrunk the Stock Market … click this link.


In This Issue of Marketmail (Click Here to Read)

In Income Mail, Bryan Perry opens with a warning about a serious European Sovereign debt meltdown threat coming from Italy this time. Next, Gary Alexander charts the history of stock market surges before and after mid-term elections, along with a tutorial on the media’s past job-market misinterpretations. Ivan Martchev turns his attention to the ongoing (and third in a series of) Argentine currency crises, and how locals and outsiders can play this crisis. Jason Bodner examines the new shuffling of the 11 S&P sectors, involving Telecoms, Infotech and Consumer Discretionary, while I cover the latest moves in crude oil.

Income Mail:  

The Bond Vigilantes and Short Sellers Take Aim at Italy’s Debt

A Tale of Two 10-Year Yields (U.S. vs. Italy)

 by Bryan Perry

  

Growth Mail:  

Mid-Term Election Euphoria Could Lift the Market Dramatically

The “Tragedy” of Americans Working Second Jobs…Demythologized

by Gary Alexander

  

Global Mail:  

Significant Emerging Markets Contagion is Very Much Possible

What to Do in a Currency Crisis

by Ivan Martchev

 

Sector Spotlight:  

Is the New “Hot” Trend Real, or Fake?

Introducing a “New” (Supercharged Old) S&P Sector: Communications Services

by Jason Bodner

 

A Look Ahead:  

Crude Oil Reaches a Four-Year High – What’s Next?

The Fed Raises Rates – and Signals (Maybe) One More Increase

by Louis Navellier