An avalanche of strong economic data … Louis Navellier is incredibly bullish … what he sees coming for the broad market … a practical roadmap for buying

Hang on, enjoy the ride, folks. It will never get better than this.

That’s legendary investor, Louis Navellier, from his Monday market-update podcast for Accelerated Profits subscribers.

What has Louis so bullish?

In short, an avalanche of positive economic data.

In today’s Digest, let’s eavesdrop to find out what Louis is focusing on, and why he believes high-quality stocks are positioned for a major rally.

But there’s far more value in the podcast than just a summation of the latest economic news…

Louis touches on the growth vs. value debate… a forecast of where the market goes over the coming weeks… a “how to buy” outline for anyone looking to put new money to work… even whether to expect the market to be up or down based on the specific day of the week.

Lots of great, actionable value to cover, so let’s jump straight in.

 

***Wall Street cheers a slew of positive economic data

For newer Digest, readers, Louis is one of the early pioneers of using predictive algorithms to scour the markets for quantitatively-strong stocks. Forbes even named him the “King of Quants.”

This numbers-approach has helped him produce decades of triple-digit winners for his private clients and subscribers. Today, he’s one of the most respected veteran analysts in the industry.

Louis began his Accelerated Profits podcast by pointing toward how we’re entering a seasonally-strong time of year:

April is a very strong month seasonally. It’s actually the strongest month for the Dow in the last 50 years. And in the last 20 years, it’s up 85% of the time.

But he quickly makes clear that it’s not just seasonal-strength that investors are enjoying today. In short, recent economic news has been stunning.

Back to Louis:

We had a great jobs report (last Friday) when the market was closed. We created 916,000 payroll jobs. Comps were expecting 675,000, so that was a huge surprise.

Also, January and February payrolls were revised significantly higher. And the unemployment rate is at 6%.

On that unemployment note, Louis highlights an interesting detail…

Average hourly wages were slightly down in the latest report. But Louis explains this is a sign that employers are rehiring many service- and lower-paid workers that were previously unemployed.

So, this lower-hourly-wage data point is not a bad statistic. Instead, Louis suggests it shows our economy is getting back to normal.

Continuing with additional, positive economic data from the podcast:

The manufacturing side of our economy is now at a 37-year high.

And that’s with a chip shortage hurting automotive manufactures and a plastic shortage. Plastic prices skyrocketed when the chemical plants had to shut down in February during the big freeze…

We’re in a robust economic recovery, there’s no doubt about it.

In fact, Bloomberg is reporting (Monday) that the container ships at Long Beach have to wait eight days to unload the containers. That just shows you there’s robust demand.

For additional evidence of this robust recovery, Louis points toward a great reading from the ISM Service Index report from Monday.

To make sure we’re all on the same page, Louis is referencing the Institute for Supply Management (ISM) report that measures the health of the U.S. services sector.

The index reports a static value. Anything above 50 indicates growth in the services sector. Below 50 is a contraction. Given that two-thirds of the U.S. economy is service-related, a strong number here is critical if we’re going to see a sustained financial recovery.

Fortunately, that’s exactly what we got.

Back to Louis:

(The ISM survey report) hit an all-time high. It actually surged to 63.7 in March up from 55.3 in February.

But the details were just stunning.

Business activity production surged almost 15 points. New orders surged even more. I mean, it’s incredible.

So, we have a lot of good stuff in the pipeline.

Plus, we still have $1,400 checks going to a large number of Americans. Louis believes this will have a substantial positive impact on retail sales. After all, he says that the $600 debit cards that the government sent out made retail sales rise 7.6%. So, a $1,400 check is likely to have an even greater positive impact.

Wrapping up the economic data part of his podcast, Louis ends with:

It’s stunning. And we’re going to have peak sales and earnings momentum announced starting in a couple weeks.

So, hang on, enjoy the ride, folks. It will never get better than this.

 

***But on the other side of peak sales and earnings momentum will be a narrower market

Louis is quick to tell listeners to prepare for more-challenging market conditions beginning in several weeks:

After this incredible sales and earnings momentum is going to be announced, I do expect the market to get more narrow. There’s no doubt about it.

You can only go so high, so fast.

That said, after this market-narrowing, we could return to broader strength. The reason why has to do with the recent “value vs growth” debate we’ve been hearing about from the financial press in recent weeks.

Back to Louis:

If you turn on the financial networks, they still talk about a value shift.

That’s not a value shift. That’s a mean-reversion rally.

A mean-reversion rally is where stocks that were lagging get caught up. What that’s going to do is build a bigger base for another launch.

So, I expect growth to lead the way. And whoever reports the best first-quarter sales and earnings, and provides positive guidance, is going to win.

 

***A practical game-plan for buying

With so much positive economic data and broad strength behind the market, it’s tempting to jump in with your investment capital.

But Louis urges a more cautious approach:

As positive as I am on our stocks and the market, I do want you to wait for dips to buy if you can. When I get new money to invest, I usually wait for a dip. I don’t like to chase stocks.

Louis then takes it one step further, providing helpful information about specific days that might offer better buying opportunities:

Markets are seasonally-strong on Monday and Tuesday. The buying pressure will start to ebb on Wednesday afternoon. Thursday/Friday are not seasonally-strong.

As I write Friday mid-day, this appears to be playing out as Louis forecasted. All three major indices are largely flat on the day.

Wrapping up, we have strong economic data – in some cases, all-time-high economic data… more stimulus money flowing to consumers… an economy that’s reopening… and, all around, many reasons to be optimistic.

On that note, I’ll let Louis take us out:

It’s time to celebrate. It’s time to enjoy the ride. It’s lock-and-load time.

You want to be fully invested before the earnings come out…

I think we’re going to have a lot of fun this month.

Have a good evening,

Jeff Remsburg