Why the Stock Market Sold Off on Monday

Wall Street certainly rang in the New Year on a mixed note!

After rallying to new record highs at the market’s open on Monday, Wall Street’s mood turned sour. As a result, the stock market reversed course, and the three major indices plunged more than 2% in the early afternoon before rebounding into the close and trading relatively steady today.

During any big selloff, it’s important to watch the selling volume. If the volume builds, then the selling will intensify. Luckily, that wasn’t the case yesterday. The volume was light, so the pullback looked more like a market pause and a good buying opportunity for fundamentally superior stocks.

The reality is there’s still a bit of uncertainty circling Wall Street right now. The biggest concern is that Alibaba (BABA) CEO Jack Ma is missing. In addition, there’s been some back-and-forth about delisting three Chinese companies – China Mobile (CHL), China Telecom (CHA) and China Unicom Hong Kong Ltd. (CHU) – because of their military ties. The NYSE announced the decision on December 31 to delist, but abruptly made an “about face” yesterday.

Details behind the decision are sparse. The NYSE stated, “In light of further consultation with relevant regulatory authorities with Office of Foreign Asset Control FAQ 857, the New York Stock Exchange LLC (“NYSE”) announced today that NYSE Regulation no longer intends to move forward with the delisting in relation to the three issuers…”

Another issue is that the Atlanta Fed revised their GDP growth estimates for the fourth quarter down significantly. The Fed last estimated GDP growth of 10.4%, but that was lowered to 8.6% yesterday. The downward revision isn’t too surprising following the states reinstating lockdowns and coronavirus protocols after the spike in coronavirus cases. Clearly, the lockdowns are weighing on the U.S. economy, as consumers are still hesitant to open their wallets.

With all that said, I remain bullish on the stock market.

The reality is that the earnings environment will improve dramatically in 2021. Year-over-year comparisons for earnings and sales should be particularly favorable for the first two quarters of 2021. You may recall that the global pandemic significantly hindered economic growth and business prosperity during the first six months of 2020. As a result, it will be easier for companies to achieve strong results in the first two quarters of 2021.

The analysts at FactSet agree: The S&P 500 is expected to achieve year-over-year earnings growth of 22.1% in full-year 2021. That’s well above the 10-year average growth rate of 10%.

I should also add that every new president is given a 100-day honeymoon, which likely means President-elect Biden and his administration will receive little criticism during the first 100 days of his presidency. The Biden administration is also not expected to significantly increase income taxes during the first couple years, given the precarious nature of the U.S. economic recovery.

The outcome of the Georgia senate races this month could impact tax policy. But if the Republicans maintain control of the Senate, I do not expect an increase in the favorable tax rates on qualified dividends or capital gains.

And we can’t forget that the Fed will be keeping interest rates at or near zero through 2023. The 10-year Treasury yield remains below 1%. In comparison, the Dow and S&P 500 yield 2.51% and 1.82%, respectively. So, yield-hungry investors will continue to chase dividend-paying stocks.

The bottom line: There are a lot of factors that should get the stock market firing on all cylinders again.

Preparing for a Prosperous New Year

With that in mind, I look for fundamentally superior stocks to step into the spotlight in January and lead the market higher in 2021. My Platinum Growth Club Model Portfolio stocks are directly in line to prosper, given that they are characterized by at least double-digit earnings growth and have benefited from positive analyst revisions in recent months. So, as investors return to their trading desks, I look for my Platinum Growth Club Model Portfolio stocks to continue to meander higher.

It’s why I made several changes to my Platinum Growth Club Model Portfolio last week to ensure that my Platinum Growth Club subscribers are well-positioned to profit in the New Year, including selling four stocks and adding eight new names.

If you’re interested in my latest recommendations and want to get into position to take advantage of the coming strength with fundamentally superior stocks, now is the time to join me here at Platinum Growth Club. Currently, I have more than 100 stocks across all my services to choose from, and as a Platinum Growth Club subscriber, you have full access to each and every one.

Of course, you don’t have to invest in all 100+ stocks to grow and prosper this year. If you’d rather start small, I have you covered there, too. My Platinum Growth Club also comes with my exclusive Model Portfolio. I handpick all of my Model Portfolio recommendations from my different services – Growth Investor, Breakthrough Stocks and Accelerated Profits – so you can rest assured that you’re always invested in the crème de la crème.

If you’re interested, please click here for full details. And if you decide to join today, not only will you have instant access to all of my recommendations, but you’ll be just in time for my first Platinum Growth Club Live Chat Event of 2021, scheduled for next Monday, January 11, at noon. I will be covering several topics, including my latest thoughts on the current market environment. I will also take some time at the end to answer subscriber questions. So, if you join me at Platinum Growth Club today, you can send me your questions early.

Sign up here now so you don’t miss out!

Note: On Monday, I released my latest Portfolio Grader 500, a quarterly list of some of the best and worst stocks on the stock market right now. In it, you have access to 250 A- and B-rated powerhouses and 250 D- and F-rated sell immediately stocks. As a valued Platinum Growth Club subscriber, this reference guide is yours free. Read it here now.

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:

Alibaba (BABA)

Weekly Upgrades and Downgrades

During these busy times, it pays to stay on top of the latest profit opportunities. And today’s blog post should be a great place to start. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, I decided to revise my Portfolio Grader recommendations for 74 big blue chips. Chances are that you have at least one of these stocks in your portfolio, so you may want to give this list a skim and act accordingly.

This Week’s Ratings Changes:

Upgraded: From Hold to Buy
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
ACN Accenture Plc Class A B C B
ALXN Alexion Pharmaceuticals, Inc. B C B
ANSS ANSYS, Inc. B C B
CMI Cummins Inc. B C B
DHI D.R. Horton, Inc. B B B
EDU New Oriental Education & Technology Group, Inc. Sponsored ADR B C B
EL Estee Lauder Companies Inc. Class A B C B
EXPD Expeditors International of Washington, Inc. B C B
FBHS Fortune Brands Home & Security, Inc. B B B
LEN Lennar Corporation Class A B B B
NLOK NortonLifeLock Inc. B C B
NVO Novo Nordisk A/S Sponsored ADR Class B B C B
ORCL Oracle Corporation B C B
PAGS PagSeguro Digital Ltd. Class A B C B
SRPT Sarepta Therapeutics, Inc. B D B
STM STMicroelectronics NV ADR RegS B C B
WHR Whirlpool Corporation B B B
Upgraded: From Sell to Hold
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
AES AES Corporation C D C
BCH Banco de Chile Sponsored ADR C C C
BMY Bristol-Myers Squibb Company D C C
CNHI CNH Industrial NV C C C
COO Cooper Companies, Inc. C D C
CRH CRH Plc Sponsored ADR C C C
DD DuPont de Nemours, Inc. C D C
DRI Darden Restaurants, Inc. C B C
ELAN Elanco Animal Health, Inc. C D C
HEI HEICO Corporation C C C
INCY Incyte Corporation C D C
IT Gartner, Inc. D C C
KEP Korea Electric Power Corporation Sponsored ADR C C C
LYB LyondellBasell Industries NV C D C
MA Mastercard Incorporated Class A C D C
MCD McDonald’s Corporation C C C
ROST Ross Stores, Inc. D C C
RSG Republic Services, Inc. C C C
SUI Sun Communities, Inc. D B C
TCOM Trip.com Group Ltd. Sponsored ADR D B C
TFX Teleflex Incorporated C C C
ULTA Ulta Beauty Inc C D C
WAT Waters Corporation C D C
Downgraded: From Buy to Hold
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
AZN Astrazeneca PLC Sponsored ADR C B C
BF.A Brown-Forman Corporation Class A C C C
CAG Conagra Brands, Inc. C B C
CCK Crown Holdings, Inc. C B C
GDDY GoDaddy, Inc. Class A C C C
GM General Motors Company C A C
GRMN Garmin Ltd. C B C
GWRE Guidewire Software, Inc. C B C
HTHT Huazhu Group Ltd. Sponsored ADR B D C
LN LINE Corp. Sponsored ADR C C C
MCHP Microchip Technology Incorporated C C C
MKC.V McCormick & Company, Incorporated C C C
NWS News Corporation Class B C C C
ON ON Semiconductor Corporation C B C
PKX POSCO Sponsored ADR C C C
Downgraded: From Hold to Sell
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
ANTM Anthem, Inc. D C D
APO Apollo Global Management Inc. Class A D C D
BAM Brookfield Asset Management Inc. Class A D D D
BTI British American Tobacco PLC Sponsored ADR D C D
CI Cigna Corporation D C D
DISH DISH Network Corporation Class A D B D
DTE DTE Energy Company D C D
EQH Equitable Holdings, Inc. D D D
ES Eversource Energy D C D
HAL Halliburton Company D C D
NTR Nutrien Ltd. D D D
OTEX Open Text Corporation D B D
PM Philip Morris International Inc. D C D
RCI Rogers Communications Inc. Class B D C D
SLF Sun Life Financial Inc. D C D
TEVA Teva Pharmaceutical Industries Limited D D D
TXT Textron Inc. D C D
VIAC ViacomCBS Inc. Class B D B D
WMB Williams Companies, Inc. D C D

To stay on top of my latest stock ratings, plug your holdings into Portfolio Grader, my proprietary stock screening tool. You may get started here.

Sincerely,
Louis Navellier

Louis Navellier

Buy These 3 Hypergrowth Stocks to Play the Hydrogen Economy’s $11 TRILLION Breakout

If there’s one trend Wall Street is growing more excited about, it’s electric vehicles (EVs). For years, Tesla (TSLA) reigned supreme, making it a go-to name for investors interested in the EV space. However, it’s now facing fierce competition in Europe and is no longer in the number-one spot.

While some folks are trying to find the next big EV winner, there’s another burgeoning trend that’s flown mostly under the radar, but is also set to offer a wealth of opportunity for folks who are in-the-know. I’m talking about hydrogen fuel.

My InvestorPlace colleague Luke Lango, an expert on this topic, is calling this trend the “Hydrogen Economy.” I’ve read his research, and I have to say, I am mighty impressed.

If you’re interested in Luke’s thoughts and would like to learn more about this economy, as well as his picks for the three best hydrogen stocks to play the potential growth, I encourage you to read his article below. I hope you enjoy it!

Today, electric vehicles are all the hype.

They have morphed into the epicenter of the world’s shift to cut carbon emissions dramatically and rapidly, and sprint into a cleaner, greener, and more sustainable future.

But electric vehicles weren’t always at the epicenter of the Clean Energy Revolution…

Back in 2003, hydrogen was the talk of the town.

Then President U.S. George W. Bush said in his 2003 State of the Union address that “the first car driven by a child born today could be powered by hydrogen and pollution-free.

He was half-right. There are a lot of pollution-free cars out there today. Many children born back in 2003 are driving them. But, for the most part, they are powered by electric batteries, not hydrogen fuel cells.

Where did hydrogen go wrong?

In the words of Matthew Blieske, Shell’s global hydrogen product manager: “… there was always something missing.

In the early 2000s, hydrogen fuel cells were hyped up for their ability to reduce energy dependence, at a time when crude oil prices were north of $50 and rising. But, falling oil prices in the late 2000s/early 2010s sapped some of this hype, and dramatically slowed the Clean Energy Revolution.

Then, once the world started getting serious about decarbonization again in the back-half of the 2010s, hydrogen was but one of many zero-emission energy sources out there, alongside solar, wind, and electric batteries.

Relative to those other energy sources, hydrogen has proven to be less efficient and more expensive.

That’s because hydrogen – while the most abundant element in the universe – doesn’t exist in its pure form on Earth. So, producing hydrogen requires a complex, multi-step process, which results in significant electricity loss and requires tons of added infrastructure and dollars.

Not to mention, to offset these extra costs, most companies have turned to producing hydrogen from cheap natural gas – meaning most hydrogen isn’t zero-emissions at all anymore.

Net net, here we are in 2020, and hydrogen has gone from the epicenter of the Clean Energy Revolution to niche afterthought.

But that’s all about to change…

The Hydrogen Economy is on the cusp of an enormous tipping point.

For the first time in hydrogen’s long and choppy history, all the stars have aligned for the clean energy source to finally come into its own.

The global political stage is set for mass decarbonization over the next decade, as every country works towards a net-zero emissions target…

Economies of scale have led to the cost of hydrogen fuel cells dropping 60% over the past decade. Deloitte expects hydrogen fuel cell costs to drop below electric battery and combustion engine costs in just a few years…

Technological advancements and falling renewable energy costs have led to a new era of scalable “Green Hydrogen” production, wherein hydrogen is cost-effectively produced from renewable energy sources, like solar and wind…

In other words, all the drivers have finally shown up to the party at the same time.

In the words of Blieske: “[In the past] there was a policy missing, or the technology wasn’t quite ready, or people were not so serious about decarbonization. We don’t see those barriers anymore.”

With those barriers removed, the Hydrogen Economy will tip into its long overdue renaissance in the 2020s, creating what Morgan Stanley sees as an $11 TRILLION hydrogen market in the coming decades.

Where will all this hypergrowth come from?

In high-usage and long-range energy and transportation markets, where hydrogen’s advantages over electric batteries shine brightest.

You see… battery electricity beats hydrogen when it comes to cost, efficiency, safety, and public roads infrastructure. To that extent, battery electricity will likely be the dominant clean energy source for passenger cars and last-mile delivery vans.

But hydrogen – thanks to its unmatched energy density as a result of being the lightest element in the universe – beats battery electricity when it comes to range, recharging times, and emissions. So, in heavy-usage and long-range situations, hydrogen is the better renewable energy source. To that extent, hydrogen fuel cells will likely be the dominant clean energy source for industry, cross-country haul, and stationary.

Think forklifts in warehouses… trucks that have to travel across the country, and ships that have to travel across oceans… data-centers that have to be “always on.”

Hydrogen fuel cells are on the cusp of disrupting those industries over the next decade, much as electric batteries are on the cusp of disrupting passenger vehicles.

Who is at the forefront of this multi-trillion-dollar disruption?

Plug Power (PLUG). The company started out by supplying hydrogen fuel cells for forklifts to warehouse operators like Walmart and Amazon. Now, Plug Power is morphing into an all-in-one, vertically-integrated Green Hydrogen powerhouse at the epicenter of the Hydrogen Economy.

Needless to say, Plug Power stock is a long-term winner.

But other names are also interesting in this hypergrowth space…

Like Ballard Power (BLDP), who is making hydrogen fuel cells for buses, trucks, and trains. And Bloom Energy (BE), who is creating energy “boxes” powered by green hydrogen to help replace grid power.

Between these three hypergrowth stocks, you have three of the highest-quality plays on the multi-trillion-dollar Hydrogen Revolution. You also have three stocks that could easily rise several hundred percent in the 2020s.

Hypergrowth investors should take a good hard look at these three emerging hydrogen stocks.

Sincerely,

Signed:
Luke Lango

Note: The Editor (Louis Navellier) hereby discloses that as of the date of this email, the Editor (Louis Navellier), 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:

Plug Power (PLUG)

What 2020 Can Teach Us About Investing in 2021

If there’s one thing we can all agree on right now, it’s that we’re ready for 2021.

This year has been one of surprises – most of them unpleasant.

It seems forever ago now, but 2020 actually got off to a great start. The Dow rose to an all-time high in the first seven weeks, employment was strong, and the U.S. economy was rolling along.

Then, COVID-19 hit the world like a meteor from outer space. The resulting lockdowns created one of the biggest, fastest declines in market history… which was followed by huge government stimulus, a belief that COVID-19 infections had peaked, and a massive stock rally.

To add to the confusion, we had a summer of social unrest and protests across the country.

And we just experienced one of the most contentious elections in American history.

It’s all enough to make your head spin.

But at least one thing worked out just as well as we hoped…

Exactly one year ago, my InvestorPlace colleague Matt McCall and I introduced Power Portfolio 2020 with a single goal in mind – to provide our members with a robust, diversified stock portfolio that would crush the market.

We recently closed the portfolio with massive gains of 35%, which blew away the Dow’s 6% return in the same timeframe.

Yes, the portfolio got hit with everything else when the pandemic burst on the scene, but our goal was to invest in high-quality stocks and hold them for the year. Those stocks rebounded an average of 175% from their lows, and to say our portfolio reached our goal of beating the market by 200% is a huge understatement.

And now, we’re looking ahead to 2021.

What do our research and computer models tell us about the opportunities and dangers ahead?

Can we beat or even exceed last year’s world-class performance?

What impact will a new administration have on the economy and stocks?

What will happen when we finally get COVID-19 behind us?

These are all important questions, and we’re going to give you our answers and expectations in our Early Warning Summit 2021 next Thursday, December 17, at 7 p.m. ET. It’s free to attend, all you have to do is click here to reserve your seat.

What we’ll share that night will affect much more than just stocks. It involves the entire economy, your job, your financial well-being, and so much more.

One of the real highlights for us this past year was the opportunity to combine our two very different systems for such powerful profits. There’s more than one way to uncover big market winners!

I’m a numbers guy, and I focus on the details, like earnings and sales growth, that signal whether a company’s stock is about to take off. Matt is more of a “top down” or “big trend” investor, though he dives way down into company specifics.

Both strategies work. But last year we learned that when we combined our strategies – when we both agree on a stock – the results are even more incredible.

We enjoyed working together, and our members made a lot of money. So we’ve been researching, meeting, and hammering out our expectations for next year. That’s what we’ll talk about at our Early Warning Summit 2021.

We can’t cover everything here, but let’s just say our computer models and research have us very excited about what’s to come. We’ve identified the biggest trends that will have the largest and most immediate impact on the coming year… and how to take advantage.

We’ll talk about some of these in the coming days leading up to the event, so keep an eye on your email.

In the meantime, be sure to RSVP now and let us know you’re coming. We can’t wait to see you next Thursday.

Note: To celebrate our success in 2020 and help you prepare for 2021, Matt McCall and I are holding an Early Warning Summit 2021 next Thursday, December 17, at 7 p.m. ET.

We’ll be talking about the big market moves we see impacting stocks in 2021 and why you must start preparing BEFORE January 1.

You’ll also learn a way you could beat the market by 6X or more – no matter what unfolds over the next 12 – from a group of highly selective stocks.

The event is free to attend, and I highly encourage you to sign up now.

If you have any money in the market at all, this is information you need.

 

This “Missing Link” Cloud Company just Acquired an AI Startup

The growing cloud-based IT services company, ServiceNow Inc. (NOW) is making headlines this week following its acquisition of a new artificial intelligence (AI) start-up, Element AI, which it expects to boost its AI capabilities. Element AI is an AI-based IT services company that was founded to help non-tech companies build AI services. They also use AI to analyze text, language and images.

ServiceNow has cloud-based corporate applications to manage a variety of internal departments—from IT to Security to Human Resources to Customer Service. These apps can be tailored to each company’s specific needs and organizational structure. They are designed to reduce the amount of time and money spend to have  employees hunt around for answers.

So, Element AI’s role here will be to help ServiceNow create an AI program to help smooth the decision-making process and productivity even further.

The buyout is estimated to be around $500 million, which also marks NOW’s biggest acquisition yet.  The company is also acquiring most of Element AI’s talent, including AI scientists and practitioners.

According to ServiceNow’s CEO Bill McDermott, the company is the “missing link that can integrate systems, silos, departments and processes, all in simple, easy-to-use cross-enterprise workflows.”

And I agree.

It’s why I recommended NOW to my Growth Investor subscribers back in July 2018. Since my initial recommendation, the stock has risen an impressive 176%, with some of these gains coming on the heels of the company’s better-than-expected third-quarter earnings report in late October.

The company increased its full-year 2020 outlook after it revealed “fantastic” results for its third quarter. During the quarter, ServiceNow completed 41 transactions of more than $1 million in new annual contract value. The company now has 1,012 customers worth more than $1 million in contract value, which represents a 25% year-over-year increase.

For the third quarter, subscription revenue rose 31% year-over-year to $1.09 billion. Total third-quarter revenue increased 30% year-over-year to $1.15 billion, topping analysts’ expectations for $1.11 billion. ServiceNow also reported third-quarter earnings of $241 million, or $1.21 per share, which also beat estimates for $1.03 per share by 17.5%.

Companies like ServiceNow excel in both their earnings and business development thanks to a type of wealth creation magic called “scalability.” In order for a business to grow a large amount quickly, it must have scalability.

Scalability is the ability of a business to massively grow revenues while minimally growing the costs associated with producing those revenues.

If your goal as an investor is to own businesses that can make you a lot of money quickly, then you must focus your attention and dollars on scalable technology businesses.

This is why I named ServiceNow as one of my Kings of Scalability, one of three technology stocks that could easily double, triple, or even quadruple in value over the coming years…

Click here for access to this new report and the names of the other two Kings of Scalability, along with 4 other reports that are hot off the presses – The #1 Stock for the Driverless Car Revolution, The Network Effect: The Most Powerful Wealth Creation Force in History, AI Revolution and 10 Toxic S&P Stocks to Avoid Like the Plague.

Note: A chasm has opened up in America. Today, the one percent makes more money in one month than most people make in a lifetime.

On the other side, the opposite is happening. Wealth is flowing out of the pockets of ordinary Americans at an unprecedented rate. Today, nearly 80% of Americans are living paycheck to paycheck.

The gap between the rich and the poor is the widest it’s been in decades. Although wealth inequality is one of the most important social and economic issues of our time, few people understand what is really causing it.

I’ve never seen anyone from my side of the chasm step forward to explain any of these things. That’s why I put together this free video. 

In it, I’ll lay out exactly what is happening, including several key steps every American should take right now. 

Click here now to view this urgent briefing.

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:

The Fed Chair Just Admitted the Technochasm Is Real

The Federal Reserve’s biggest move this year, by far, was to keep key interest rates at ultralow levels through 2023 to help the U.S. economy recover from the COVID pandemic. This is great news for the stock market, as the Dow and S&P 500 continue to yield more than the 10-year Treasury yield. So, yield-hungry investors will continue to pour into dividend-paying stocks.

My InvestorPlace colleague Eric Fry has another interesting take, as the Fed’s comments indicate that the “Technochasm” is a very real thing. For those who aren’t aware, the Technochasm is the widening wealth gap in the United States, due in large part to big gains coming from specific areas in the market. For full details, I recommend you read his article below, where he discusses the Fed’s latest comments, recent economic data and why the rich keep getting richer.

I know you’ll find this interesting. For further details on the Technochasm, I encourage you to sign up for Eric Fry’s special Technochasm Summit event scheduled for this Thursday, November 19, at 7 p.m. ET. I’m a big believer in his work, and am excited to say that I will be joining Eric during the event. Click here to sign up now.

*******************************

“We’re recovering, but to a different economy,” Federal Reserve Chairman Jerome Powell said last Thursday during a virtual panel discussion at the European Central Bank’s Forum on Central Banking. He went on:

Even after the unemployment rate goes down and there is a vaccine, there is going to be, probably, a substantial group of workers who are going to need support as they find their way in the post-pandemic economy, because it is going to be different in some fundamental ways.

While Chairman Powell is being surprisingly clear here, let me further translate his comments into something that I know Smart Money readers will understand:

The Technochasm is real.

While we’re well on the road to recovery from the worst of the COVID-19 pandemic, the economy, Chairman Powell is saying, is splitting into two.

While anyone can “get” the coronavirus, how it’s hitting us varies widely among income levels.

Indeed, instead of being an “equalizer,” COVID-19 keeps hitting people on the wrong side of the wealth gap especially hard.

High-income white-collar folks are working from home with little more than a laptop and an internet connection. And they’re hiring tutors to teach their kids individually or in small pods.

Working-class truck drivers, nurses and health aides, and grocery store and warehouse clerks, on the other hand, are front-line troops in the war against COVID-19.

Tech companies, grocery stores, and home-improvement chains are rising. Restaurants, hotels, and airlines are basically collapsing.

In other words, the pandemic is only accelerating the widening of a wealth gap that has been growing for decades.

In 1980, the richest 1% of Americans owned about 30% of all household wealth in the country… and the bottom 90% owned about 24% of all household wealth.

But by 2012, the share of all household financial wealth owned by the top 1% had skyrocketed to more than 60%… and the share owned by the bottom 90% had plummeted below 10%.

In other words, the middle class is shrinking as rich families and big businesses accumulate fortunes and others sink below the poverty line.

And recent data is showing that gap… that Technochasm… is getting wider.

Now, it’s important that Fed Chair Powell is recognizing that the Technochasm exists.

Once the new administration takes office, another round of trillion-dollar stimulus would certainly help jobless workers and boost the economy.

There’s hope there at least. “My sense is that we will need to do more and that Congress will need to do more,” Powell said on Thursday.

And the news of two COVID-19 vaccines is undoubtedly good news.

But will all that help close the Technochasm at all?

Here’s what I think…

A Tale of Two Economies

If you just look at the S&P 500, it may look like we’re in a V-shaped economic recovery.

Yet… since the pandemic began, more than 100,000 small businesses have closed.

During the worst part of the pandemic, low-wage employment was down 15%, and around 1 in 10 Americans were drawing unemployment payments

The Center on Budget and Policy Priorities estimated that 13 million families are behind on their rent.

In other words, while Wall Street and Silicon Valley were (and still are) doing great, small businesses and Main Street were (and still are) treading water at best. Tens of millions of Americans are falling behind.

The Reason the Super-Rich Are Getting Richer

As Chairman Powell came out and said, the Technochasm is here to stay.

Maybe in his first 100 days, the newly elected president will set in motion policies that will slow the pandemic… fix the nation’s crumbling infrastructure… and put millions of Americans back to work.

And maybe those moves will “save” folks caught on the wrong side of the Technochasm.

But I doubt it. I long ago gave up on believing that any politician can stop the Technochasm from growing.

There’s only one way anyone can make sure they don’t get left behind as Big Tech roars ahead.

How to Capitalize on the Technochasm

Many companies will prepare for the next global pandemic by shifting more of their processes to automation, robots, and/or artificial intelligence, rather than human beings.

In other words, as people keep losing their jobs due to technology… that technology in and of itself will work to make the wealth gap bigger.

That, again, is the Technochasm.

However, you can act now to make sure you and your portfolio are on the right side of the Technochasm.

Several cutting-edge technologies, like artificial intelligence, autonomous driving, and the Internet of Things, all enabled by the coming 5G revolution, will produce trillions of dollars’ worth of commercial activity over the coming decade. That will enrich both entrepreneurs and investors along the way.

But powerful technology trends like these are not new news. For many years already, sweeping technological innovation, proceeding at an exponential pace, has been creating a long list of economic winners… and losers.

And the stock market clearly reflects this phenomenon.

During the last eight years, for example, the S&P 500 Information Technology Index has delivered a total return of more than 400%. That is double the gains of the entire S&P 500 over the same time frame.

In fact, the technology sector’s outperformance over this time frame was much better than just a double. Excluding tech stocks, the S&P 500 Index produced a gain of just 117% during the last eight years – or barely one quarter the gains of the S&P’s tech stocks.

Thanks in large part to this overperformance by tech companies, the economy is recovering, and the stock market keeps rising.

Yet… the net worth of America’s lower and middle classes keeps plummeting.

I wish I could tell you this situation will be resolved soon.

But it won’t.

That’s why I filmed the original Technochasm video… and it’s why I’ve been educating folks about it for the past few months.

I’ve shown folks how to make sure they’re on the right side of the Technochasm.

In my upcoming event with Louis Navellier – reserve your spot by clicking here – I’m going to take it a step further. That event is on Thursday, November 19, at 7 p.m. Eastern.

In my first Technochasm video, my emphasis was on gaining knowledge.

In the upcoming event, I’m going to reveal how you can capitalize on the Technochasm… and make well over $100,000 in the next 12 months, from a niche group of stocks.

I’ll also reveal a free pick with 10X potential.

Sign up for this free event here.

Regards,

Signed:
Eric Fry

P.S. Thousands of you saw my “Technochasm” viral video from earlier this year. Well, the whole world has changed since then… and I’m back to talk about the Technochasm, the biggest megatrend in finance, in ways I couldn’t before… and to discuss opportunities for even bigger market gains… the kind to keep you from falling behind. And I’m bringing along investing legend Louis Navellier to join me on camera for the first time ever on Thursday, November 19, at 7 p.m. EasternClick here to reserve your spot at this historic event FOR FREE.

Why I’m Joining Eric for His Technochasm Summit

The minute I heard about Eric’s Technochasm Summit, I jumped at the chance to participate.

I’ve been following Eric’s work for years – and I 100% believe in his research.

It might surprise some people, but understanding the power of new technology and exponential progress is how I gained an edge over Wall Street and amassed a personal fortune.

In fact, I owe all of my investing success to one college assignment… and a big piece of technology. It was like a proto-version of the Technochasm.

At Cal State Hayward, one of my professors tasked me with creating a model portfolio that would mimic the performance of the benchmark S&P 500 Index.

It was a dream assignment for a numbers guy like me… but I failed at it spectacularly.

The problem? My model kept beating the S&P 500.

This was back in the late 1970s, when everyone believed it was virtually impossible to beat the market without taking on excessive risk. Conventional wisdom was that you might get lucky for a while, but no one could consistently beat the market.

Thankfully, my professors gave me unprecedented access to Wells Fargo’s big, expensive, and powerful mainframe computers to continue to build my stock-selection models. (Remember, this was more than 40 years ago.)

Through hundreds of hours of research, and thanks to that mainframe computer, I discovered how an elite type of stock consistently outperformed the broad market, year in and year out. Through extensive analysis, I isolated the eight key qualities that these super-performing stocks shared… and developed a system for riding them.

The research I did back then serves as the foundation of what is now my advanced, high-tech method of computerized market analysis.

Like I said, it was like an early version of the Technochasm that is the focus of our upcoming summit – technology beating out the old ways of doing things.

Since then, for the past four decades, I’ve had a front-row seat to the acceleration and adaption of technology. I’ve seen how a small company can come out of nowhere and totally disrupt an entire industry, destroying every competitor in its wake.

And I’m still using technology to do so.

My proprietary computer programs are constantly scanning the market for companies with outstanding quarterly earnings growth… outstanding annual earnings growth… and a tendency to surprise Wall Street analysts with better-than-expected earnings growth.

In addition to qualities related to superior earnings growth, my computer programs screen for companies with increasing operating margins, increasing sales growth, high returns on equity, and strong cash flow.

Corporate America is not Lake Wobegon, where all the kids are above average. The brutal truth is that some companies are much, much better than others. They have better management, better products, bigger profit margins, stronger sales, stronger balance sheets, etc.

My system analyzes over 4,000 stocks, grades them according to the individual qualities listed above, and also combines the individual metrics to create an overall composite grade for any stock. These grades are just like the ones in school. When I see a business with the highest growth and business quality ratings, the stock gets an “A.” A stock with miserable ratings gets an “F.” The result of all this work? My readers – and now some of Eric’s readers as well – get to buy the world’s fastest-growing companies – and hold them through their most successful years of expansion.

Once I discovered this market-beating formula, I devoted extensive time and resources to testing, refining, and validating these findings. In 1980, I launched my own independent investment newsletter for individual investors. My goal was simple: to uncover Wall Street’s inconsistencies and help individual investors beat the market with less risk in the market’s best growth stocks.

My track record has consistently beat the S&P 500. It beat the market by more than 3-to-1 early in its iteration, and more recently it has performed even better – posting 1,198% gains vs. 176% for the S&P 500 since 2003.

That’s a record of beating the market by 6-to-1. 

Today, I help tens of thousands of investors achieve their financial dreams. Plus, I manage more than $1 billion in private and institutional accounts through my fund management company.

Eric’s stock selection and trading system differs from my own – and Eric will tell you more about it in a couple of days. But for now, I want to say that our two systems are complementary… and both produce dozens of triple- and quadruple-digit winners for our readers.

On Thursday, I’ll show you a little more about my system… and some of my biggest tech winners.

And after that, Eric will reveal a little bit of his own stock picking and trading system.

So stay tuned.

Meanwhile, make sure The Technochasm Summit is marked down on your calendar. Eric and I will take to the “airwaves” on Thursday, November 19, at 7 p.m. Eastern.

Eric and I are getting ready for it now… getting our thoughts together and working on some new stock picks.

We can’t wait to see you there!

This Little-Known Biotech Posts Record Results

When we spoke last, I’d said that a decisive presidential election was likely, which is what investors were anticipating, too. Stocks rallied strongly on Monday, with the Dow climbing more than 300 points. Well, as you may know, a decisive election outcome ended up not being the case, as folks are still counting ballots in the battleground states of Pennsylvania, Michigan and Wisconsin.

The good news is Wall Street isn’t concerned. Stocks continued to surge through Election Day to today. NASDAQ led the charge higher, ending yesterday up 3.9%. The tech-heavy index is now up an incredible 9% in just four trading days.

The reality is Congress will likely stay in gridlock, with Republicans on track to maintain the Senate. Wall Street likes nothing more than a congressional gridlock. 

Hopefully, the presidential election will be decided soon. But in the meantime, the U.S. economy is roaring. We had positive ISM numbers earlier in the week and a strong ADP payroll report yesterday morning. In October, 365,000 private sector jobs were created. Clearly, the V-shaped economy recovery remains underway.

I should also add that we’re officially in the seasonally strong time of year. November and December are often characterized by holiday cheer, as a positive mood spreads from Main Street to Wall Street.

And, of course, earnings are still working. My Buy List stocks (which all Platinum Growth Club subscribers have full access to), on average, are posting 30% sales growth, 60% earnings growth and more than 30% earnings growth.

Repligen Posts Record Results

Just today, one of my Platinum Growth Club Model Portfolio stocks, Repligen Corporation (RGEN), posted record third-quarter revenue and upped its full-year revenue guidance. Company management noted that it experienced “strong revenue and order demand” from both COVID-19 customers and gene therapy clients. Direct product orders surged more than 100% year-over-year, which is “positioning us well for an excellent finish to 2020 and a strong start to 2021.”

For the third quarter, Repligen achieved revenue of $94.1 million and adjusted earnings per share of $0.40, which represented 35% annual revenue growth and 53.8% annual earnings growth. The analyst community was expecting adjusted earnings of $0.28 per share on $86.54 million in revenue, so Repligen crushed earnings estimates by 42.9% and revenue forecasts by 8.7%.

Now, for fiscal year 2020, Repligen expects total revenue between $348 million and $352 million, up from previous guidance for $332 million to $340 million. The company’s COVID-19 programs are anticipated to account for 10% of revenue. Full-year adjusted earnings per share are forecast to be between $1.41 and $1.45, compared to previous guidance for $1.24 to $1.29.

The stock jumped 9% on the heels of the report to a new 52-week high of $203.90 today. Investors following my Platinum Growth Club Model Portfolio would have gotten in way ahead of today’s rally, as I recommended the stock in July 2019. RGEN is now sitting pretty with about a 133% return on my Platinum Growth Club Model Portfolio.

It’s also why I will be adding RGEN to my Top 5 Stocks list for November in tomorrow’s Breakthrough Stocks November Monthly Issue. I’ll explain all the details why tomorrow, but let me say now that I see a lot of upside ahead for this company.

I will also discuss what could trigger an early “January Effect,” as well as why the market rally could persist through May and possibly beyond. In addition, I will be releasing two new buys. My latest commentary, new Top 5 Stocks list and newest recommendations will be available shortly after the market close tomorrow in my Breakthrough Stocks November Monthly Issue.

If you’re interested in my latest recommendations and want to get into position to take advantage of the coming “January effect” with fundamentally superior stocks, now is the time to join me here at Platinum Growth Club. My Model Portfolio and Buy Lists will be ripe for the picking, especially in the wake of their better-than-expected third-quarter earnings. I have more than 100 stocks across all my services to choose from, and as a Platinum Growth Club subscriber, you have full access to each and every one.

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 services – Growth InvestorBreakthrough Stocks and Accelerated Profits – so you can rest assured that you’re always invested in the crème de la crème.

If you’re interested, click here for full details. If you decide to join today, not only will you have instant access to all my recommendations, but you’ll be just in time for my final Platinum Growth Club Live Chat Event of 2020, set to take place next Monday, November 9 at noon. I will be covering my fourth-quarter outlook and the third-quarter earnings season. I will also review this past year, share my predictions for 2021 and give updates on several Platinum Growth Club Model Portfolio stocks. I will also take some time at the end to answer my subscribers’ questions.

Sign up here now so you don’t miss out!

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:

Repligen Corporation (RGEN)

2 Factors That Could Trigger a Major Market Rebound

Wall Street has thrown quite the tantrum this week following reports of record numbers of new coronavirus cases in Europe. As a result of the increase, some European countries are reinstating lockdown protocols. For example, Italy ordered that all movie theatres, gyms and swimming pools must stay closed, while restaurants and bars can no longer serve customers after 6 p.m. 

Stocks plunged on the news, with the broader market falling about 2% on Monday and then more than 3% on Wednesday.

I know the recent gyrations have left some investors’ heads spinning, but I feel very good right now! The reality is there are several factors that could trigger a major market rebound in the coming weeks. I’ll discuss each factor in tomorrow’s Growth Investor November Monthly Issue, but I’d like to share two with you today.

Third-Quarter Earnings Season

The first is the third-quarter earnings season. My Market360 readers know earnings season is my favorite time of year, and this earnings season is no different. The analyst community has revised their consensus earnings estimate up a whopping 25.5% in the past three months. Right now, average earnings surprise is running at an incredible 34.2%.

I look for my own Growth Investor stocks to post wave-after-wave of positive earnings results, as the average Growth Investor stock is characterized by 45.7% annual sales growth and 65% annual earnings growth. And I’m pleased to say that my Growth Investor stocks have yet to disappoint. As of this morning, 27 Growth Investor companies have released their results so far and 23 posted topped analysts’ expectations. On average, the earnings surprise is currently 21.3%.

Not surprisingly, many of these stocks have been dropkicked and propelled higher on the heels of their strong numbers. Take Generac Holdings, Inc. (GNRC), for example. Yesterday, the company unveiled all-time record third-quarter results, thanks to strong demand for its products. Company management stated, “Third-quarter revenue and adjusted EBITDA far exceeded all-time records led by dramatic growth in sales of home standby and portable generators.”

For the third quarter, Generac Holdings achieved total sales of $701 million, or 17% year-over-year growth. That crushed analysts’ estimates for sales of $664.71 million. Generac noted that residential product sales jumped 37% year-over-year to $459 million, up from $335 million in the same quarter a year ago.

Adjusted third-quarter earnings soared 47.8% year-over-year to $133 million, or $2.08 per share, compared to $90 million, or $1.43 per share, in the third quarter of 2019. The consensus estimate called for adjusted earnings of $1.66 per share, so Generac posted a 25.3% earnings surprise.

Thanks to the record third-quarter results, Generac upped its full-year 2020 guidance. The company now expects to achieve full-year sales growth between 10% and 12%, up from previous guidance for 5% to 8% annual sales growth.

Wall Street cheered the results, and the stock bucked the broader market’s downward trend and soared 5.3% to a new 52-week high yesterday of $218.63 yesterday. That momentum continued into this morning, as the stock hit a new 52-week high of $220.88 before pulling back on a bit of profit-taking later in the day.

IDEXX Laboratories, Inc. (IDXX), one of my longer-held positions in Growth Investor, is another great example. The company posted an 18.2% earnings surprise following its most-recent earnings release this morning and popped nearly 7% to a new 52-week high of $452. (I’ll share the full details of this company’s latest earnings report on Saturday, so stay tuned!)

Presidential Honeymoon

The second factor is what I like to call a “presidential honeymoon.” Typically, after a presidential election, the stock market often has a relief rally on the hope that all the political infighting will ebb. Presidential honeymoons tend to last 100 days or so. And with the uncertainty about to diminish surrounding this presidential election, the stock market could easily surge in a relief rally, as there is so much cash on the sidelines. One very good sign is the record number of early voters, which makes disputing any results much more difficult.

At the end of the day, though, whether Joe Biden or Donald Trump wins the presidential election really makes no difference, since the federal deficit will remain above 100% of GDP. With such a massive debt burden, the Federal Reserve cannot raise key interest rates, since the interest on the Treasury debt would crush the federal budget deficit. As a result, the U.S. dollar may remain under pressure as international investors realize that the Fed has to print more money to monetize the Treasury debt.

The bottom line is that I expect a big bounce is coming, and my Growth Investor stocks, in particular, are perfectly positioned to ride the next wave. In fact, 15 stocks on my High-Growth Investor Buy List and three stocks on my Elite Dividend Payers Buy List have gained over 100% since their initial recommendations. Clearly, my Growth Investor stocks can prosper in even the most uncertain times.

As I mentioned earlier, I will be sharing the other main factors that will drive stocks higher in the coming weeks and months in tomorrow’s Growth Investor November Monthly Issue. I will also release three new buy recommendations, my latest Top 5 Stocks list, review the latest earnings results (there are a lot of them!) and preview next week’s earnings reports. There will be a lot to talk about, so sign up here now so you don’t miss out.

Note: I believe stocks are poised to go much higher over the longer term. In fact, I’m predicting the Dow will hit 200,000 in the coming years.

I know that sounds crazy, but history proves otherwise.

In my special Financial Foreshock Summit, I explain exactly why. (You can watch my free briefing here.) I also share where I see the best opportunity to play the growth.

If you’re interested, you can click here for all the details. You don’t want to miss out on this next big bull run – and all the potential profits that come with it.

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:

Generac Holdings, Inc. (GNRC), IDEXX Industries, Inc. (IDXX)

The Winners and Losers of Earnings This Week

Wall Street remains distracted by the stimulus negotiations underway on Capitol Hill, and as a result, the stock market’s daily gyrations continued this week, sending the broader indices lower.

Personally, I still expect a lot of the uncertainty that’s been hitting the markets to shake out after the presidential election.

Regardless, I think our time is therefore better spent focusing on the third-quarter earnings season that’s just kicked off.

Results are starting to trickle in and we’re seeing more S&P 500 companies post more earnings surprises than average, and by a wider margin. I’m not too surprised considering analysts aggressively increased earnings estimates in the three months prior to the earnings season kickoff.

About 10% of the companies in the S&P 500 have reported so far, and already a whopping 86% beat analysts’ estimates, which is higher than the five-year average of 73%, according to FactSet. Of those companies that have reported earnings, the companies are reporting earnings 21.7% have come in above the estimates, which also beats the five-year average of 5.6%.

Earnings aside, positive news on the labor front helped buoy stocks late in the week.

In fact, initial claims for jobless benefits fell by 55,000 last week to a seasonally adjusted 787,000, which is far below the 870,000 Bloomberg estimated and its lowest level since mid-March. The latest figures include revisions from California that reduced the overall number of claims in October. The state has now resumed reporting unemployment insurance claims data again after a two-week pause brought on by a surge of claims that led a massive backlog to the state’s aging system.

Plus, the coronavirus pool of treatments deepened this week as the FDA granted full approval to Gilead Sciences (GILD) for its antiviral treatment remdesivir, which sent the biotech’s shares higher.

As I mentioned yesterdayTesla (TSLA) climbed following its blowout earnings and sales third-quarter earnings report on Wednesday, while Netflix (NFLX) had a tough third quarter, with earnings falling below analysts’ estimates and disappointing new paid subscribers figures.

Tesla stock has climbed modestly after its earnings announcement, while Netflix continues to fall. Either way, neither stock impresses me at the moment. There are better growth stocks out there.

On Thursday, Chipmaker Intel (INTC) reported earnings of $1.1 per share, which was in line with analysts’ expectations, while revenue slightly bested (by 0.4%) expectations at $18.3 billion. Still, shares plunged over 10% in after-hours trading as investors weighed lagging data center growth for the company. The company’s data center for enterprise and government business segment fell 47% after two quarters of more than 30% growth.

Intel’s data center issues could be good news for competitors in the hot cloud sector, including Advanced Micro Devices (AMD), one of my Accelerated Profits stocks, which was up 1.4% in after-hours trading – and up 63% on my Buy List overall.

As you know, I’m expecting wave-after-wave of positive earnings, especially from my fundamentally superior Growth Investor stocks. In fact, I’m pleased to report that all eight Growth Investor companies that reported this week crushed analysts’ earnings expectations. Clearly, we’re off to a strong start.

Invest in the Fundamentals

At Growth Investor, my Buy List stocks are characterized by 45.8% average annual sales growth and 65.4% average annual earnings growth. Analysts have also continued to increase earnings forecasts, so I still look for even more of our Growth Investor stocks to post better-than-expected earnings forecasts in the coming weeks.

An early example this quarter is Logitech International SA (LOGI), which I recommended in late August. The company smashed analysts’ expectations by a stunning 228.1% and upped its full-year guidance. The stock soared more than 20% on the news on Monday. On Tuesday, it hit a new 52-week high of $95.71 before pulling back a bit later in the week.

Another example is NextEra Energy (NEE), an energy company recommendation that generates electricity in North America by way of wind, solar, nuclear and more. The company posted a 3.1% earnings surprise on Wednesday and its stock is now trading about 2% below its 52-week high of $308.06.

After a solid third quarter, NextEra Energy is on track to deliver full-year results that are in-line with the company’s guidance.

Ready for the Next Big Market Event?

I’ve got plenty more stocks locked and loaded for earnings season. This is why I’m so excited for next week.

I have 23 Growth Investor Buy List companies scheduled to report earnings from the latest quarter, and I’m expecting them to report wave-after-wave of positive earnings results

But there’s something else I’m looking forward to as well. I think the market is about to experience a rare event we haven’t seen in decades. I call it a Foreshock. If you thought the run-up from 2009 until now was impressive, you haven’t seen anything yet.

I believe stocks are poised to go much higher from their current levels. In fact, I’m predicting the Dow will hit 200,000 in the coming years. At its current level of about 28,200, it’ll have to rise about 609% to get there.

I know that sounds crazy, but history proves otherwise.

Remember what happened after the huge run-up in stocks in the 1980s until 1991? The Dow went on a 234% tear during the ‘80s. And by the end of the decade, analysts and the media were calling for a market crash in the early ‘90s, much like some naysayers are today. Instead, the Dow surged almost twice as high in the ‘90s as it did in the ‘80s.

The bottom line: The stock market still remains the best game in town.

In my special Financial Foreshock Summit, I explain exactly why. (You can watch my free briefing here.) I’ll also share where I see the best opportunity to play the growth.

If you’re interested, you can click here for all the details. You don’t want to miss out on this next big bull run – and all the profit potential that comes with it.

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:

Advanced Micro Devices (AMD), Gilead Sciences (GILD), Logitech International SA (LOGI), NextEra Energy (NEE)

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