Why the Second Quarter Could Be Even Better

There’s been a lot of volatility in the market lately.

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Last Friday, the Dow dropped, then rose on Monday, then dropped on Tuesday, then rose on Wednesday.

While the recent gyrations might have some investors reaching for their antacids, let me reassure you — everything is fine.

Let’s start with earnings.

With over 75% of S&P 500 companies reporting, 87% so far have beat consensus earnings expectations, with an average 23% surprise, according to FactSet.

Folks, I’ve been in this business for decades, and I don’t think I can ever remember an earnings season this strong. It is absolutely stunning.

Now, there is definitely inflation brewing, and it’s worrying a lot of investors. Lumber prices, for instance, are up 67% this year, and they’re 340% higher than a year ago. The price rise is adding about $35,000 to the cost of the average newly built home in the U.S., according to the National Association of Home Builders.

Or take cobalt, the element that has a variety of industrial purposes, including as an oxide in the cathodes of lithium-ion batteries — the type of batteries used in high-end electric vehicles. Prices for the metal climbed 40% in the first quarter.

There’s a lot of concern that we’re not going to be able to produce as much as we want to produce because of all these acute supply shortages. But that’s due to soaring demand in the U.S and abroad.

The World Trade Organization expects North American merchandise exports will grow 7.7% this year, after falling over 8% in 2020. Meanwhile China’s imports from the U.S. set a new record in the first quarter, particularly products for the construction sector.

Now, traditionally, stocks are a great hedge against inflation because if we do have inflation, it makes earnings go even higher. Certainly, putting your money in the bank doesn’t protect you against inflation. It’s why I believe the stock market remains the best game in town.

But here’s the most shocking statistic I’ve seen lately, and it comes from the Atlanta Fed. The organization’s GDPNow estimate for second-quarter growth rose to 13.6% on Tuesday, up from 10.4% last Friday.

In other words, the Atlanta Fed expects economic growth will continue to accelerate in the second quarter, not decelerate.

So, it looks like I stand corrected. I’d predicted earnings growth would peak in the first quarter of this year. But now it looks like that will happen in the second quarter!

I think it’s time to realize that we may never ever have an earnings announcement sales environment quite like this. All I can tell you folks is that this is as good as it will ever get.

So, you shouldn’t let the daily gyrations in the market distract you, especially when you’re invested in fundamentally superior stocks — like my Platinum Growth Club subscribers are.

Case in point: My Breakthrough Stocks are forecasted to post 176.4% average annual sales growth and 758.2% average annual earnings growth. Although some large flagship stocks have issued more cautious guidance, my Breakthrough Stocks are not showing any signs of slowing down.

Furthermore, the analyst community has revised their consensus earnings estimate up 7.3% in the past month, which is indicative of accelerating earnings growth and more big earnings surprises ahead.

Given the strength in small-cap stocks, I am adding two new exciting stocks to my Breakthrough Stocks Buy List, which I will release in tomorrow’s Breakthrough Stocks May Monthly Issue. One posted a double-digit earnings surprise in the most recent quarter, while analysts expect the other to have triple-digit earnings growth and double-digit sales growth in the first quarter. I lay out all the details on these stocks in the issue.

Now, I still think that the overall stock market will narrow in the upcoming weeks as the bumpy summer months approach. Fortunately, my Portfolio Grader measures the underlying buying pressure and volatility on a given stock. Just as it can help guide me when to buy a stock with explosive potential, it also allows me to tell subscribers when to sell if buying pressure ebbs and the stocks become too volatile.

Profiting from the Crème de la Crème

The bottom line is that the current economic and earnings environments are as good as it can possibly get, so I foresee continued strong appreciation for at least through July.

And I’m pleased to say that my Platinum Growth Club subscribers are perfectly positioned to benefit from these trends and much more.

You see, I have more than 100 stocks across all of my services (plus 31 LEAPS call options, or Long-term Equity Anticipation Securities in my Power Options trading service), and each and every one boasts strong earnings and sales growth.

Of course, you don’t have to invest in all 100+ stocks. If you’d rather start small, I’ve got you covered there, too. My Platinum Growth Club service comes with my exclusive Model Portfolio.

I handpick all of my Model Portfolio recommendations from my different stock services — Growth InvestorBreakthrough Stocks and Accelerated Profits — so you can rest assured that you’re always invested in the crème de la crème.

So, if you want to make sure your portfolio is “locked and loaded” with fundamentally superior stocks for the long term, I encourage you to sign up for Platinum Growth Club today.

For full details, click here.

Sincerely,

Louis Navellier

Note: The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:

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