Excerpt from Louis Navellier's Marketmail - 11/6/2018
The S&P 500 gained 2.42% last week in a recovery rally. The good news is that there has been (1) wave after wave of positive third-quarter earnings announcements, (2) more big stock buy-backs, and (3) mergers like Electro Scientific (ESIO) accepting a $30 per share buyout offer from MKS Instruments (MKSI), which was announced in conjunction with ESIO’s better-than-expected sales and earnings announcement.
Navellier & Associates owns ESIO, and MKSI, in managed accounts and a sub-advised mutual fund. Louis Navellier and his family own ESIO, and MKSI via the sub-advised mutual.
This is likely the first of many acquisitions to be announced in the upcoming weeks, now that many top-quality stocks are trading at bargain prices, with historically low price/earnings ratios. Companies often postpone their dividend increases, stock buy-backs, and acquisition announcements until their quarterly earnings are released; so, as this earnings season winds down, I expect to see more positive news!
I for one am certainly happy that October is over, since it was the worst month since February 2009 for most stock market indices. Fortunately, November is a seasonally strong month. The Dow Industrials have risen an average of 1.35% and 1.87% in the past 50 and 20 years, respectively, according to Bespoke Investment Group, making November the third best month in both time frames. An early “January Effect,” boosting small capitalization stocks, typically commences in November, usually around Thanksgiving,
I also expect to see the stock market celebrate the fact that the mid-term elections will mercifully be over tonight. No matter the outcome, this day removes much of the uncertainty that has been distracting many investors. I live in two swing states, Florida and Nevada, and I have been shocked by the long lines for early voting. Since there appears to be record turnout, we may see some surprising results tonight!
Bryan Perry sees a rise in yields being the biggest impediment to a market rise in the next two months, while Jason Bodner sees the trade resolution as the market’s main concern and biggest key to recovery. Ivan Martchev agrees, with a dollar breakout giving the trade impasse a new urgency. Gary Alexander just returned from New Orleans, where the bears roared once again, but he brings some historical parallels which could offer an election boost. Then I’ll close with some market trading insights and economic data.
Bond Yields Rise with a Spike in New Hires
By Bryan Perry
Rising Yields Pose Biggest Threat to Year-end Rally
The New Orleans Bears Growl Yet Again
By Gary Alexander
The Yin and Yang of Gold and Stocks in the 2016 & 2018 Elections
The U.S. Dollar Index Breaks Out
By Ivan Martchev
The Trade-Weighted Dollar Is Much Stronger
Market Lows Seem Lower than the Market Highs Seem High
By Jason Bodner
Trade Resolution is Now the Market’s Main Concern
A Look Ahead:
Arbitrage Traders are Targeting Tech Stocks
By Louis Navellier
Economic Indicators Turn Positive Just Before Election Week