Excerpt from Louis Navellier's Marketmail - 3/26/2019
We’re closing out a wonderful quarter this week, but, as last Friday’s action demonstrated, we must watch out for any quarter-ending “window dressing” this week, as well as 90-day smart Beta ETF rebalancing.
The catalyst for the Friday sell-off was the U.S. Treasury yield curve inverting on Friday, as the 10-year U.S. Treasury bond yield declined to 2.44%, while the 1-month Treasury yield remained relatively steady at 2.49% after U.S. factory orders fell to the slowest growth rate in two years. This 5-basis point Treasury yield “curve inversion” spooked the stock market, since yield curves tend to precede recessions.
At the same time, over in Europe German 10-year bund yields fell below 0% after the weakest purchasing managers’ index in six years was released for the Eurozone, so bond rates have been falling worldwide.
There is a lot of drama unfolding in global markets “under the radar” of U.S. political news, centered on the Mueller report. First, Brian Perry covers the embarrassing “flip flops” of central bankers in the U.S. and Europe, as they are forced belatedly to admit the impotence of their policy tools. Gary Alexander examines the strange case of stock prices moving in inverse patterns to earnings growth (or shrinkage). Ivan Martchev looks at the revival of negative-yielding global debt, after a brief hiatus, indicating global deflation returning. Jason Bodner looks deeper into the evidence of unusual institutional buying and selling, indicating signs of more growth ahead. Then I’ll wrap up with a look at this narrowing market. We all agree that in this stage of the bull market, a far more selective stock-screening process is required.
Income Mail: Central Bankers “Flip Flop” Once Again
By Bryan Perry
Money is Moving into Quality Dividend Stocks
Growth Mail: The Yin and Yang of Stock Prices vs. Earnings Growth
By Gary Alexander
After Last Friday – Should You “Catch a Falling Knife”?
Global Mail: $10 Trillion in Negative-Yielding Global Debt…and Rising
By Ivan Martchev
Sector Spotlight: Does Friday’s Decline Mark an End to the Bull Run?
By Jason Bodner
What Unusual Institutional Buy/Sell Activity is Telling Us Now
A Look Ahead: The Stock Market Narrows into a “Funnel” of a Few Good Stocks
By Louis Navellier
The Fed Signals “All Clear” on Rate Increases This Year