Excerpt from Louis Navellier's Marketmail - 2/12/2019
The market weakness in the last few days is just normal consolidation after a massive rally since the Christmas Eve lows. In the six weeks from December 25 to February 5, the S&P 500 rose over 16%, so a couple of down days are nothing to worry about. However, there is no doubt that President Trump’s National Economic Advisor Larry Kudlow’s comments on Thursday – that a “sizable distance” remains between the U.S. and China in protracted trade negotiations – spooked some nervous investors.
Kudlow said that previous talks covered “a tremendous amount of ground” and that enforcement will be very important, as well as technical and structural issues. Whether or not President Trump will meet with China’s President Xi before the March 1st deadline is uncertain, but Kudlow confirmed that in the spirit of good faith the tariffs on Chinese goods would remain at 10% (versus the scheduled increase to 25%). So overall, the China trade deal negotiations are proceeding, and both sides appear to be acting in good faith.
Treasury yields remain remarkably stable, despite a slightly lower bid-to-cover ratio at last week’s Treasury auctions. Wall Street is no longer distracted by interest rates and is now much more focused on fourth-quarter earnings announcements and 2019 guidance. So far, according to FactSet, 66% of the S&P 500 companies have announced their fourth-quarter results, posting annual earnings growth of 13.3% and annual sales growth of 7.0%, which are +4.0% and +1.2%, respectively, above analyst estimates.
Bryan Perry begins by handicapping the scary rhetoric of some Democratic Presidential candidates, then focuses on his specialty, high-dividend stocks. Gary Alexander looks at our demographics as destiny, showing that America still holds a long-term advantage over East Asia and Europe, but we must address entitlements and immigration to keep growing. Ivan Martchev shares the encouraging news of junk bonds hitting new 52-week highs as a harbinger of higher stock prices. Jason Bodner sees a temporary oversold condition before we assault new highs, but he is encouraged by the strong rebound in semiconductors. In my closing column, I take on Schumer and Sanders on stock buy-backs, and analyze all the economic data.
The Scary Spector of Socialism
By Bryan Perry
Dividends Matter, Now More Than Ever
What an Aging America (and World) Means for Investors
By Gary Alexander
East Asia and Western Europe are Aging More Rapidly
“Read Like a Bond, Trade like a Stock”
By Ivan Martchev
New 52-Week Highs for Junk Bonds Likely Mean New 52-Week Highs for Stocks
The Domino Effect Works in Bull or Bear Markets
By Jason Bodner
Semiconductor Index up Over 20% Since Christmas
A Look Ahead:
Schumer & Sanders Knock Share Buy-backs for Bizarre Reasons
By Louis Navellier
The Economic News Remains “Mixed,” Confounding Fed Watchers