Excerpt from Louis Navellier's Marketmail - 2/5/2019
The S&P 500 rose 2.34% last week, nearly 8% in January, and 15% since Christmas. This January was the strongest in 32 years, especially for small-capitalization stocks, which had their strongest start in over 40 years. Despite this strength, the market initially got up on the wrong side of the bed last week after some big companies warned that sales were slowing down, mostly due to a lack of demand from China.
Complicating matters further for these multinational companies is the fact that the U.S. dollar remains strong, while the Chinese yuan and most other currencies remain weak, so when multinational companies are paid in eroding currencies, they all too often have to issue revenue warnings. The Eurozone’s growth is now increasingly precarious. Since approximately 50% of the S&P 500’s sales are generated outside of the U.S., I expect more multinational companies to issue revenue warnings in the upcoming weeks.
Fortunately, some multinational companies are prospering. For example, on Wednesday, Boeing posted a substantial earnings surprise and provided positive guidance. So far, fourth-quarter results for S&P 500 stocks are running at an annual sales gain of 7.4% and annual earnings pace of around 13%. I believe that companies which continue to surprise and guide higher, like Boeing, will continue to be market leaders.
Navellier & Associates owns BA in managed accounts and a sub-advised mutual fund. Louis Navellier and his family do not own BA privately.
Bryan Perry opens with a mixed review of the current fundamentals, fearing the market may “retrace some of its recent gains” before rising further. Gary Alexander examines the manic-depressive winter market and projects a “pause that refreshes” before the normal Spring rally. Ivan Martchev sees added hope with the Fed’s new “patience,” along with indications that the U.S. dollar should remain relatively strong. Jason Bodner is pleased to see positive fundamentals once again driving the market, and growth-oriented sectors leading this recovery. Then, I’ll add my closing look at the economy and stock market.
The Market Appears to be “Mai-tais and Yahtzee” for Now
By Bryan Perry
“Confused” Doesn’t Begin to Explain the Current Investment Landscape
The Winter of Our Discontent – and Spring of Hope?
By Gary Alexander
Most Fundamentals Support Further Market Gains
The Fed’s Expeditious U-Turn
By Ivan Martchev
Implications for the U.S. Dollar
Where Have All the Bears Gone?
By Jason Bodner
Growth Sectors are Leading the Charge
A Look Ahead:
“As January Goes, So Goes the Year”?
By Louis Navellier
A Great Jobs Report Capped a “Mixed” Week of Indicators