Excerpt from Louis Navellier's Marketmail - 5/21/2019
First-quarter announcement season is now more than 90% complete and I am happy to report that the S&P 500’s sales are up 5.9% and earnings are up 2.2%, which is a stunning surprise, since the analyst community had predicted negative earnings growth and 4% sales growth. Accelerating sales growth is a sign of overall GDP growth and a likely sign that we’ll see positive surprises in upcoming quarters, too.
Treasury rates dipped below 2.4% last week. The lower rates go, the more aggressive the corporate stock buybacks will likely be. On Thursday, The Wall Street Journal featured an excellent article entitled “Booming Buybacks Aren’t Likely to Wane Despite Market Volatility.” (Check it out, if you can.) In late May, after first quarter earnings announcement season ends, I expect to see many more stock buybacks.
Most of our authors focus on the positive side of the U.S./China trade talk impasse. The U.S. holds the winning hand and China seems to be shooting itself in the foot. Bryan Perry focuses on the slowing growth rate in China and the opportunity in U.S. defensive blue-chip stocks paying high dividend yields. Gary Alexander disputes the assumption that inflation will return if high tariffs remain in place over time, while Ivan Martchev argues that China seems to use these latest tariffs as cover for a long-term strategy of yuan devaluation. Jason Bodner covers the sectors that have sold-off in the latest “controlled-burn” correction, while I argue that these trade tensions will not hurt the U.S. economy or the market, long-term.
Income Mail: No Plans to End the “Little Squabble” Any Time Soon
By Bryan Perry
Emperor Xi Has No Clothes
Growth Mail: Will a Trade War Cause Soaring Inflation?
By Gary Alexander
The CPI Overstates Inflation, Perhaps by 2% a Year
Global Mail: The Chinese Silver Bullet Is Yuan Devaluation
By Ivan Martchev
Exchange Rate Manipulation is a Sun-Tzu-Style Maneuver
Sector Spotlight: Is This Correction a “Controlled Burn” or a Wildfire?
By Jason Bodner
The Latest Selling is Focused on Specific Sub-Sectors
A Look Ahead: Trade Tensions Spook Wall Street – But the U.S. Holds the Winning Hand
By Louis Navellier
The Economy Continues in “Goldilocks” Mode