Why I’m Happy About Today’s Selloff

The light can at any time go from green to red without pausing at yellow.

This quote comes from the Oracle of Omaha, Warren Buffett, himself. It’s also an apt description for what the NASDAQ is experiencing right now. After a phenomenal 2021, which saw the tech-heavy index surge 21.4% for the year, putting in right behind the S&P 500’s 27% gain and outpacing the Dow’s 19% return during the same time period, the index came to a grinding halt last week and has continued to march lower this week.

As you may recall, last Wednesday, the NASDAQ officially slipped into correction territory, off 10.7% from its all-time high set on November 19. According to Sundial Capital Research chief research officer Jason Goepfert, nearly 40% of NASDAQ companies have fallen at least 50% from their 52-week highs. Investors haven’t seen this severe of a tech selloff since the dot-com bubble burst in 1999-2000.

This week hasn’t been any better for the NASDAQ. Yesterday, the tech-heavy index opened 2% lower, though it did make an incredible reversal in the afternoon and managed to eke out a small gain by the close. Today was also an ugly day for the index, as it slipped more than 3% in the afternoon.

While I know the continued selling has been gut-wrenching, I’m actually happy at this moment, and that’s probably baffling to most folks.

Here’s why…

First let me say that we had an incredible reversal yesterday, with very strong volume to the upside. This tells me that the smart money on the sidelines is jumping back in and buying stocks. But every time you make a low, you have to retest the lows, and you want the retest to be on lighter volume and eventually exhaust the selling volume. So, when you have a violent move like we had yesterday, it’s going to take some time for all the dust to settle.

We’re also moving deeper into the fourth-quarter earnings season, and it’s clear that Wall Street is refocusing on fundamentals. In fact, The Wall Street Journal noted just today that investors are losing interest in companies that aren’t profitable. This is good news for me, as I only recommend fundamentally superior companies that can post strong sales and earnings in a decelerating earnings environment.

I’m pleased to say that, so far, earnings are working. Last Wednesday, Alcoa Corporation (AA) announced that it achieved record results for its fiscal year 2021. For the fourth quarter, Alcoa reported its highest quarterly revenue in three years. Fourth-quarter revenue jumped 39.6% year-over-year to $3.34 billion, up from $2.93 billion in the same quarter a year ago. Analysts were expecting revenue of $3.36 billion. Fourth-quarter adjusted earnings surged 861.5% year-over-year to $2.50 per share, compared to $0.26 per share in the fourth quarter of 2020. Analysts were looking for adjusted earnings of $1.96 per share, so Alcoa posted a 27.6% earnings surprise.

The stock rallied in the wake of its stunning earnings results, though it did get hit with profit-taking later in the week. However, it bounced back nicely today, climbing more than 5% while the broader market pulled back.

An example from today is Lockheed Martin Corporation (LMT). This company crushed analysts’ earnings expectations and posted in-line revenue for both its fourth quarter and full year 2021. For the fourth quarter, the defense contractor achieved earnings of $2.0 billion, or $7.47 per share, on $17.7 billion in revenue, which compares to earnings of $1.8 billion, or $6.38 per share, and revenue of $17 billion in the same quarter a year ago. Analysts were expecting earnings of $7.15 per share on $17.66 billion in revenue.

During fiscal year 2021, revenue rose 2.5% year-over-year to $67.04 billion and slipped 6.3% year-over-year to $22.76 per share. The consensus estimate called for full-year earnings of $22.46 per share and revenue of $67 billion. Lockheed Martin also noted that it rewarded shareholders with $7.0 billion in the form of dividends and stock buybacks. Investors cheered the strong results, triggering a 3% pop in the stock this afternoon.

Now, I should add that we’ll hear from three flagship stocks this week: Up first is Microsoft Corporation (MSFT) this afternoon, followed by Tesla (TSLA) on Wednesday and Apple (AAPL) on Thursday. Their results are important, because these companies are bellwethers, and we need a bellwether to grab the market by the horns and lead us. Last year, half of NASDAQ’s returns came from Apple, Microsoft, Alphabet (GOOG), NVIDIA Corporation (NVDA) and Tesla. So, we’re looking for the new leaders to emerge here, and it’s imperative that that happens.

So, what are analysts expecting from Microsoft’s, Tesla’s and Apple’s latest quarterly reports?

  • For Microsoft’s second quarter in fiscal year 2021, analysts expect earnings to rise 13.79% year-over-year to $2.31 per share, up from $2.03 per share in last year’s second quarter. Revenue is expected to increase 18% year-over-year to $50.88 billion. Earnings estimates have been revised 4.1% higher in the past three months, so an earnings surprise is possible.
  • For Tesla’s fourth quarter, the analyst community is calling for earnings per share to surge 182.5% year-over-year to $2.26, up from earnings per share of $0.80 in the same quarter a year ago. Revenue is expected to climb 52.2% year-over-year to $16.35 billion, up from revenue of $10.74 billion in the same quarter a year ago. Analysts have revised their earnings estimates 18.3% higher in the past 90 days, so an earnings surprise could be in the offing.
  • For Apple’s first quarter in fiscal year 2021, analysts expect earnings to increase 11.9% year-over-year to $1.88 per share, up from earnings of $1.68 per share in the same quarter last year. Revenue is expected to come in at $118.38 billion. Earnings estimates have been upped slightly in the past three months.

We’ll have a better understanding of where these companies stand after their results are out (I’ll review their latest numbers in Saturday’s Market360 article, so keep an eye out for that), but I can already tell you that regardless of where the market turns next, the best strategy is to invest in fundamentally superior stocks. In my 40-plus years of investing, I’ve found that earnings work 70% of the time and that good stocks bounce like “fresh tennis balls” while bad stocks bounce “like rocks.” I don’t expect this earnings season to be any different.

If you’re not sure which stocks to start with, I recommend that you take a look at my Platinum Growth Club. As a Platinum Growth Club member, you will have full access to all of my stock services – Growth Investor, Breakthrough Stocks and Accelerated Profits – which totals to more than 100 stocks, as well as my Power Options service. This options service focuses solely on LEAPS (Long-Term Equity Anticipation Securities) call trades. These are a great investing vehicle to turbocharge your portfolio.

Of course, you don’t have to invest in all 100% stocks. 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, so you can rest assured that you’re always invested in the crème de la crème.

I should add that it’s a great time to join. I just held my first Platinum Growth Club Live Chat event yesterday. I discussed a wide range of topics, including my market outlook, the fourth-quarter earnings season, the rotation out of growth stocks and into value stocks, as well as my latest thoughts on the Federal Reserve’s inflation problem. I also answered many subscriber questions.

I will also be revealing a brand-new 5G stock in my Breakthrough Stocks service on Thursday afternoon, which you’ll also receive as a Platinum Growth Club subscriber. This company boasts double-digit earnings growth and quadruple-digit earnings growth and is well-positioned to benefit from the 5G boom. Plus, I’ll be releasing my Growth Investor Monthly Issue for February on Friday afternoon, which will include three new buys – one high-growth play in the electric vehicle (EV) sector and two dividend growth stocks.

Again, as a Platinum Growth Club subscriber, you will have complete access to all of this information, as well as every Weekly Update, Monthly Issue, Flash Alerts, Live Chat events, and much more. Sign up here now so you don’t miss out!

Sincerely,

Signed:

Louis Navellier 

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:

Alcoa Corporation (AA), Alphabet (GOOG), Lockheed Martin Corporation (LMT), NVIDIA Corporation (NVDA)

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 98 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
AKAM Akamai Technologies, Inc. B C B
APH Amphenol Corporation Class A B C B
BBWI Bath & Body Works Inc. B D B
BKNG Booking Holdings Inc. B C B
CCK Crown Holdings Inc. B C B
CI Cigna Corporation B C B
CL Colgate Palmolive Company B C B
CMS CMS Energy Corporation B D B
CNI Canadian National Railway Company B C B
CRH CRH Plc Sponsored ADR B C B
DRI Darden Restaurants, Inc. B C B
EA Electronic Arts Inc. C B B
EC Ecopetrol SA Sponsored ADR B B B
EIX Edison International B D B
EL Estee Lauder Companies Inc. Class A B C B
HEI HEICO Corporation B C B
HUBB Hubbell Incorporated Class B B C B
HZNP Horizon Therapeutics Public Limited B B B
ICE Intercontinental Exchange Inc. B C B
IEX IDEX Corporation B C B
ITUB Itau Unibanco Holding S.A. Sponsored ADR B C B
JHX James Hardie Industries PLC Sponsored ADR B B B
LMT Lockheed Martin Corporation B C B
LSXMB Liberty Media Crop. Series B Liberty SiriusXM B B B
MKL Markel Corporation B D B
MLM Martin Marietta Materials, Inc. B C B
PEG Public Service Enterprise Group Inc. B D B
PH Parker-Hannifin Corporation B C B
PNR Pentair plc B C B
SKM Sk Telecom Co Ltd Sponsored ADR B B B
SNY Sanofi SA Sponsored ADR B C B
TAP.A Molson Coors Beverage Company Class A B B B
TEF Telefonica SA Sponsored ADR B C B
VALE Vale S.A. Sponsored ADR B C B
VIV Telefonica Brasil SA Sponsored ADR B C B
VMC Vulcan Materials Company B C B
WTW Willis Towers Watson Public Limited B C B
WY Weyerhaeuser Company B B B
Upgraded: From Sell to Hold
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
ALGN Align Technology Inc. D B C
APTV Aptiv PLC C D C
ATVI Activision Blizzard Inc. C C C
BBY Best Buy Co., Inc. D C C
BGNE BeiGene, Ltd. Sponsored ADR D C C
CRWD CrowdStrike Holdings, Inc. Class A D B C
CTXS Citrix Systems Inc. C C C
FND Floor & Decor Holdings, Inc. Class A C C C
FTV Fortive Corp. C D C
GMAB Genmab A/S Sponsored ADR D B C
HOLX Hologic Inc. C C C
MDT Medtronic Plc D C C
OTEX Open Text Corporation C C C
QGEN QIAGEN NV D B C
ROL Rollins Inc. D C C
SOFI SoFi Technologies Inc C C C
XP XP Inc. Class A D B C
Downgraded: From Buy to Hold
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
BWA BorgWarner Inc. C C C
CLX Clorox Company C C C
CPB Campbell Soup Company B C C
DISCA Discovery Inc. Class A C C C
DISCK Discovery Inc Class C C C C
ENTG Entegris Inc. C C C
EQIX Equinix Inc. C C C
FB Meta Platforms Inc. Class A C C C
FFIV F5 Inc. C C C
FRC First Republic Bank C C C
GS Goldman Sachs Group Inc. B C C
ICLR ICON Plc B C C
IP International Paper Company C C C
IVZ Invesco Ltd. C B C
LBYTK Liberty Global Plc Class C C C C
LEN Lennar Corporation Class A C C C
LRCX Lam Research Corporation C C C
LYB LyondellBasell Industries NV C B C
MMM 3M Company C C C
MORN Morningstar Inc. B C C
MTB M&T Bank Corporation B C C
MU Micron Technology Inc. C C C
ORAN Orange SA Sponsored ADR C C C
QCOM Qualcomm Inc. C C C
SIRI Sirius XM Holdings, Inc. C C C
T AT&T Inc. C C C
TAP Molson Coors Beverage Company Class B C B C
UI Ubiquiti Inc. B D C
VRTX Vertex Pharmaceuticals Incorporated C B C
Downgraded: From Hold to Sell
Symbol Company Name Quantitative
Grade
Fundamental
Grade
Total
Grade
AMZN Amazon.com, Inc. D D D
NFLX Netflix Inc. F C D
CMI Cummins Inc. D C D
ECL Ecolab Inc. D C D
LBRDA Liberty Broadband Corp. Class A D C D
SWKS Skyworks Solutions Inc. D C D
LDOS Leidos Holdings Inc. D C D
PCAR PACCAR Inc. D D D
INCY Incyte Corporation D B D
CSGP CoStar Group Inc. D C D
UL Unilever PLC Sponsored ADR D C D
SNAP Snap Inc. Class A D C D
TAK Takeda Pharmaceutical Co. Ltd. Sponsored ADR 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

A Mixed Q4 Earnings Season for the Big Banks

The fourth-quarter earnings season has gotten underway as many of the Big Banks have been reporting in last couple of weeks. Now, while the majority reported strong quarterly results, the financials sector, as a whole, isn’t expected to do well this quarter.

According to FactSet, financials is the only sector expected to report a year-over-year earnings decline for 2022. Specifically, it’s forecast to fall 8.9% year-over-year. The big banks’ earnings are estimated to slip 15% over the same time period.

With that in mind, let’s take a look at how JPMorgan Chase & Co. (JPM), Bank of America (BAC), Citigroup (C), Wells Fargo & Co. (WFC) and Morgan Stanley (MS) did this earnings season.

As you can see in the chart above, except for Citigroup, year-over-year earnings rose for these big banks. Most of the financial stocks dropped off earlier in the week despite their slightly better-than-expected earnings reports. JPMorgan fell 6.2%, Citigroup dropped 1.3% and Morgan Stanley declined about 4.9%. However, Wells Fargo jumped 3.7% this week and Bank of America climbed about 4.2%.

JPMorgan had a slight earnings beat for the fourth quarter, reporting earnings per share of $3.33, which beat consensus estimates for $3.03. Revenue of $29.3 billion missed estimates of $29.8 billion. So, JPMorgan posted a 9.7% earnings surprise and a 1.8% revenue miss.

JPM’s earnings got a slight boost from releasing $1.3 billion in loan loss reserves after $550 million in charge offs for the quarter. Charge offs in the fourth-quarter 2020 amounted to $1.1 billion. Fourth-quarter lending picked up, especially within its wealth management division.

Wells Fargo & Co. (WFC): Fourth-Quarter Earnings announced on Friday, January 14

Wells Fargo posted a fourth-quarter earnings beat, with earnings per share coming in at $1.25, compared to expectations for earnings of $1.00 per share. Revenue jumped 16% from a year earlier to $20.86 billion, crushing estimates of $18.68 billion. So, Wells Fargo achieved a 25.1% earnings surprise and a 11.7% revenue surprise.

Net income was $5.75 billion, which is up 92.2% year-over-year from the same quarter in 2020. The company had a huge repurchasing quarter, repurchasing $7 billion worth of shares during the fourth quarter, and $14.5 billion for the year.

Citigroup (C): Fourth-Quarter Earnings announced on Friday, January 14

Citigroup was the one bank stock on this list that reported a year-over-year earnings decline and missed earnings forecasts. Earnings per share missed expectations of $1.64 by 11.1%, with the company reporting earnings of $1.46. Revenue slightly topped expectations of $16.8 billion, coming in at $17.02 billion, so Citigroup posted a 1.4% revenue surprise.

However, investment banking revenue dropped 20% year-over-year, to $2.5 billion. Citigroup also announced that it will be selling its syndicates in four Southeast Asian countries for $2.7 billion. Its operations in Indonesia, Malaysia, Thailand and Vietnam are being acquired by the Singapore-based bank, United Overseas Bank. The sale will end the global consumer banking operations as a reporting segment.

Bank of America (BAC): Fourth-Quarter Earnings announced on Wednesday, January 19

Bank of America also posted a mixed quarter. Earnings per share of $0.82 topped estimates of $0.76, while revenue came in under expectations of $22.19 billion at $22.06 billion. So, Bank of America reported an 8.3% earnings surprise but a 0.6% revenue miss.

I should add that revenue was up 9% from a year earlier. Bank of America also had to deal with higher expenses during the fourth quarter as – along with all the banks – it logged higher compensation costs. But company management said revenue grew faster this quarter, allowing the bank to post its second-straight quarter of year-over-year positive operating leverage.

Lending was another bright spot at Bank of America, as loan balances grew 6% to $979 billion from last year’s fourth quarter and now are near pre-pandemic levels.

Morgan Stanley (MS): Fourth-Quarter Earnings announced on Wednesday, January 19

Morgan Stanley’s earnings of $2.08 per share topped earnings expectations of $1.96 per share, equating to a 6% earnings surprise. Revenue missed expectations by over $66.8 million, at $14.5 billion, so Morgan Stanley posted a 0.5% revenue miss. This year’s earnings were up slightly compared to last year’s earnings results.

Unlike its rivals, which disclosed soaring compensation costs, Morgan Stanley did not share their expenses for the quarter.

The bank’s massive investment management business, bolstered by the Eaton Vance acquisition last quarter, rose 59% to $1.75 billion in revenue, edging out the $1.66 billion estimate.

My Outlook for the Rest of the Fourth-Quarter Earnings Season

Now, I know some folks think that financials will prosper in 2022 as a result of the Federal Reserve raising interest rates. However, I do not agree.

Brokerage firms are financials and like to root for themselves. I am an ex-banking analyst, and the slope of the yield curve is the most important factor impacting bank profitability. So, if bond yields do not rise by the same amount that the Fed raises short-term interest rates in the upcoming months, then the banks operating margins can get “squeezed” as the yield curve tightens.

Suffice it to say, I’m not too excited about this sector right now.

For the market overall, the reality is the global pandemic accelerated technological change, which boosted productivity in the U.S., with several industries leading the productivity miracle.

So, tech stocks, especially semiconductor companies, will have some of the best quarterly results in mid-January through mid-February. And wave-after-wave of positive results will not only help these stocks firm up but also drive their shares higher. It’s why I’m not concerned by the recent selling in the tech-heavy NASDAQ.

Tech stocks aside, this earnings season should also trigger rebounds in fundamentally superior stocks that were hit during this week’s selling. I expect Wall Street to become laser-focused on earnings over the next five weeks, and after all the reports are out, we’ll see who’s left standing. I anticipate the winners will be those with superior fundamentals.

Now, if you’re looking to shore up your portfolio with fundamentally superior stocks, look no further than my Platinum Growth Club.

Earnings reports for my Model Portfolio stocks will be coming in fast and furious over the next few weeks. And I expect their solid results to dropkick the companies’ stocks and drive them higher. If you want to get in before the stocks take off and get the most bang for your buck, now is the time to join.

My Platinum Growth Club service comes with my exclusive Model Portfolio. I handpick all my Model Portfolio recommendations from my different stock services – Growth Investor, Breakthrough Stocks and Accelerated Profits – so you can rest assured that you’re always invested in the crème de la crème.

And you really couldn’t be joining at a better time, as I will be hosting my exclusive Platinum Growth Club Live Chat event on Monday. I will be discussing a wide range of topics, including my current market outlook, the fourth-quarter earnings season, the rotation out of growth stocks and into value stocks, as well as my latest thoughts on the Federal Reserve’s inflation problem. During this Live Chat event, I will also answer subscriber questions. If you’re interested, you can sign up now by clicking this link.

Sincerely,

Signed:

Louis Navellier 

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:

Is Microsoft’s Acquisition of Activision Blizzard Good News for Investors?

Microsoft Corp. (MSFT) had headlines buzzing this week following the company’s announcement of its planned acquisition of video game publisher Activision Blizzard (ATVI).

Microsoft CEO Satya Nadella said Tuesday he plans for the tech giant to buy the Call of Duty and Candy Crush publisher for almost $69 billion cash. This would be the biggest tech deal in U.S. history.

For reference, $69 billion is more than double what the company has ever paid (it bought LinkedIn for $26 billion) and a similar sum to what the company paid for its next largest five acquisitions combined.

Microsoft stock took a small hit following the announcement and ended Tuesday down 2.4%. But Activision shares jumped, closing up 26% at $82.31 Tuesday.

This isn’t the first time Microsoft has gone after a gaming company. The company announced in September 2020 its plans to acquire ZeniMax Media, the parent company of game publisher Bethesda Softworks. The deal closed for $7.5 billion cash in March 2021, bringing Microsoft from 15 to 23 game studios.

And Microsoft is not the only company on the hunt to acquire video game makers. Throughout 2021 several other big tech companies bought smaller gaming companies. To name a few…

  • Netflix (NFLX) purchased Night School Studio and added five video games to its streaming offerings
  • Epic Games bought Mediatonic, the brains behind popular party game Fall Guys, and Harmonix, the Rock Band publishers
  • Tencent Holdings Limited (TCEHY) acquired Turtle Rock Studios, along with two other studios.
  • Sony Group Corporation (SONY) purchased five different studios in its hunt to dominate the gaming industry.

Shares of Sony stock have already fallen this month as investors recognize the threat from Microsoft’s intended acquisition.

To me, this new deal is good news for both Microsoft and Activision.

Microsoft has been seeking a better position in the video gaming industry and the metaverse. Importantly, purchase of the video game publisher comes with its 400 million-strong customer base, which will expand Microsoft Gaming immensely. This deal is expected to bring the company into competition with the video game giants and expand its already massive total addressable market.

News of the merger comes just a week prior to Microsoft’s scheduled earnings announcement for its second quarter in fiscal year 2021. Analysts expect earnings to rise 13.79% year-over-year to $2.31 per share, up from $2.03 per share in last year’s second quarter. Revenue is expected to increase 18% year-over-year to $50.88 billion. Earnings estimates have been revised 4.1% higher in the past three months, so an earnings surprise is possible.

So, is MSFT a buy heading into earnings? Well, according to my Portfolio Grader, it is.

As you can see in its Report Card above, MSFT holds an A-rating for its Quantitative Grade, as it continues to see strong institutional buying pressure. Its fundamentals are a little lacking, as it holds an F-rating for Earnings Momentum and C-rating for Earnings Surprises, though it still receives a C-rating for its overall Fundamental Grade.

Add it all up, and MSFT has a total B-rating, making the stock a “buy” right now.

Now, while Microsoft is certainly a stock to watch, I’m more excited about what my Growth Investor stocks have to offer. My Buy List stocks are characterized by 34.5% annual sales growth and 44.4% annual earnings growth, so I expect them to post wave-after-wave of positive earnings results in the coming weeks, which, in turn, should dropkick and drive the stocks higher.

To learn more about the stocks I like the most right now, as well as my newest buys and list of Top Stocks, click here for full details.

Sincerely,

Signed:

Louis Navellier 

P.S. Right now, successful Americans like us have a bullseye on our back.

We’re facing a direct threat to our safety and prosperity.

The values we hold dear, like individual freedom, hard work and fiscal responsibility have been tossed aside.

The US national debt is growing at an unprecedented rate. And more spending is coming.

The cost of essential goods and services seems to get more expensive by the day. Critical materials are on backorder for months. Grocery store shelves are half-empty.

If you have any money in savings, in the stock market, in a 401k or even cash stuffed under the mattress, this should make the hair on your neck stand up.

To help understand the monumental problem we’re facing and why both our way of life and financial security are under attack, I put together a special presentation.

So, if you want to protect yourself and grow your wealth, I encourage you to watch this video 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:

What the Ongoing Saga Over 5G Near Airports Means for the Tech’s Rollout

Verizon Communications Inc. (VZ) and AT&T Inc. (T) have temporarily agreed to halt their nationwide 5G rollouts near the nation’s busiest airports while federal regulators work to address safety concerns.

Airline and telecom executives and the Federal Aviation Administration (FAA) have been in an ongoing tussle over how to deploy 5G technology near the nation’s busiest airports.

The Federal Communications Commission sold the C-band licenses to use for 5G wireless technology a year ago and brought in $81 billion at public auction from providers for the privilege.

As I mentioned last week, the FAA raised concerns in December that a part of the 5G wireless spectrum called the C-band could interfere with aircraft radio altimeters, which are used to help pilots land their aircraft in bad weather conditions. If the pilots can’t see the runway, they can’t land the planes, which, in turn, could cause flight delays and flight diversions. It looks like that is now happening, as several international airlines said they’d started suspending flights to the U.S.

In response, AT&T and Verizon had recently agreed to limit their cell towers’ signals in buffer zones around some of the largest airports in the country. They also initially paused rolling out expanded 5G implementations, until yesterday.

That gave the FAA time to craft new flight restrictions to protect aircraft from any possible interference from 5G.

By Sunday, however, the FAA said only 45% of the U.S. commercial fleet had been cleared to land in low-visibility conditions at 48 of the 88 airports with the most potential for any impact.

The agency said more clearances are on the way in the days ahead.

Meanwhile, AT&T and Verizon agreed, again, to further delay launching the service near airports until the regulatory issues are resolved.

Interestingly, 5G wireless has opened up in the C-band in dozens of nations across 175 networks… without a single reported problem related to aviation.

“We are frustrated by the FAA’s inability to do what nearly 40 countries have done, which is to safely deploy 5G technology without disrupting aviation services, and we urge it do so in a timely manner,” an AT&T spokesperson said Tuesday.

5G Is Full Steam Ahead

The bottom line is that while the headlines might make it sound like terrible news for 5G’s rollout, that is just not the case. In the long run, this will end up being one more minor blip on the rollout of the transformational new technology that is 5G.

It’s why I’m going “all in” on 5G, as I recently discussed during my Big Bet Summit.

The fact of the matter is that both Verizon and AT&T switched on about 90% of their new 5G networks according to schedule on Wednesday.

Verizon said the company will provide 90 million customers access to its new 5G service this month in cities like New York, Los Angeles and San Francisco. Up to 75 million customers will have access to AT&T’s new 5G service by the end of the year. T-Mobile US Inc.’s (TMUS) mid-band 5G service has been available since 2020 and covers 186 million people in the U.S.

And 5G adoption keeps ramping up across the globe at a blistering pace.

Thirteen new countries rolled out new 5G deployments over the year prior to Nov. 30, bringing the total to 112. Meanwhile, the total number of 5G deployments shot up 391% over the same timeframe to 85,602.

While the vast majority of the fastest 5G speeds are available outside America right now, the U.S. has the widest 5G availability, with 49% of the population having access to a 5G service.

Ericsson (ERIC) predicts 5G will tally 600 million subscribers by the end of the year, while CCS Insight estimates manufacturers will sell 900 million 5G devices in 2022, or about half of the total.

Phone makers are taking advantage of new, mid-tier chips, like those made by QUALCOMM Incorporated (QCOM), to build more economical models that can sell for below $300.

Apple Inc. (AAPL) is reportedly going to release a new iPhone SE with a new processor and 5G capability that will be cheaper than flagship models. Samsung, Alphabet Inc.’s (GOOG) Google, Motorola Solutions, Inc. (MSI), and OnePlus also have more affordable models on the market.

But 5G phones are just the beginning for this technology.

5G will also enable billions of streaming devices to connect, interact and collect data from each other, unlocking untold levels of productivity and innovation for consumers, industries and governments.

Big breakthroughs stemming from other groundbreaking technologies like artificial intelligence (AI), driverless cars and augmented and virtual reality will finally get the lightning-fast connectivity required to realize their full potential.

The testing to bring these features to reality has already begun.

Recently, in India, a telecom operator partnered with Tata Consultancy Services Limited (TCS.NS) to demonstrate how 5G will allow for remote robotics operations and vision-based quality inspections in manufacturing.

Verizon used its 5G system to test edge computing with wearable display firm Vuzix Corporation (VUZI) to deliver an augmented reality experience in sports and gaming.

And Thailand’s largest hospital system recently launched the Siriraj World Class 5G Smart Hospital in partnership with Huawei to bring improved access to healthcare services in remote parts of the country.

During my Big Bet Summit, I explained in detail how 5G will help those different technologies, as well as the stunning impact it will have on the U.S. economy. In case you missed it, you can watch a replay of the Big Bet Summit here.

And to help folks prepare themselves for the 5G boom, I created a special model portfolio I call the 5G Hypergrowth Portfolio: Six Stocks to Incredible Wealth. Each company is directly in line to profit from 5G. For full details, click here.

Sincerely,

Signed:

Louis Navellier 

P.S.: I just unveiled another 5G stock today, after the market close. It boasts superior fundamentals, as it posted triple-digit earnings and sales growth for its third quarter in fiscal year 2021. For the fourth quarter, analysts are expecting triple-digit earnings growth and double-digit earnings growth. This 5G company will announce its latest quarterly results next Wednesday, Jan. 26, so now is a great time to jump in before its earnings results dropkick and propel the stock higher. If you join Breakthrough Stocks today, you’ll have access to this new recommendation. Simply click here to join Breakthrough Stocks 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:

T-Mobile US, Inc. (TMUS)

Here’s What Triggered Today’s Selloff

Well, the market sure woke up on the wrong side of the bed this morning!

After a long holiday weekend, investors were greeted with a more than 1% drop in the major indices. The NASDAQ was hit particularly hard, down as much as 2% earlier in the trading day. The fact of the matter is Wall Street was cranky because the 10-year Treasury surged to a two-year high today.

The 10-year Treasury yield now sits at about 1.85%. That’s up from 1.51% on December 31, 2021. That’s a fairly dramatic rise in the 10-year Treasury, and it’s a big reason for why we saw a massive rotation out of the tech-heavy index today.

The financial media would have you believe higher rates will hurt tech stocks, but that’s simply not true. Here’s the reality: The global pandemic accelerated technological change, with many folks working and studying remotely. And this technological change boosted productivity in the U.S., with several industries leading the productivity miracle. So, tech stocks, especially semiconductor companies, will have some of the best quarterly results in mid-January through mid-February. And wave-after-wave of positive results will not only help these stocks firm up but also drive their shares higher. It’s one reason why I’m betting big on 5G.

Tech stocks aside, this earnings season should also trigger rebounds in fundamentally superior stocks that were hit during today’s selling. I expect Wall Street to become laser-focused on earnings over the next five weeks, and after all the reports are out, we’ll see who’s left standing. I anticipate the winners will be those with superior fundamentals, i.e., my Breakthrough Stocks. My Buy List companies have 57.2% average forecasted annual sales growth and 231% average forecasted annual earnings growth. They should also issue positive forward guidance.

Now, due to more difficult year-over-year comparisons, my Breakthrough Stocks are actually “decelerating” from previous 78.2% average annual sales growth and 724.8% average annual earnings growth. However, my Buy List stocks are still set to achieve earnings and sales growth well above the average S&P 500 company. According to FactSet, the S&P 500 is anticipated to achieve 21.8% average earnings growth and 12.9% average revenue growth.

The Bellwether Steps Up to the Earnings Bat

We’ve heard from a few companies so far, including the Big Banks (I’ll review their quarterly results later in the week, so stay tuned for that!), but I’m most excited to hear from Alcoa Corporation (AA), which will report its fourth-quarter earnings results tomorrow afternoon. As you probably know, Alcoa is known for establishing the aluminum industry more than 130 years ago. The company primarily manufactures and sells bauxite, the primary source of aluminum, as well as alumina, aluminum, cast products, energy and rolled products. Alcoa actually is one of the largest bauxite producers in the world with seven active mines, as well as is the leading producer of alumina.

Alcoa is also considered a “bellwether” for earnings season, as it’s a stock investors have turned to in the past as an indicator for how the coming earnings season will shake out. Currently, analysts expect Alcoa’s earnings to surge 653.8% year-over-year to $1.96 per share, up from earnings of $0.26 per share a year ago. Revenue is estimated to climb 40.5% year-over-year to $3.36 billion.

I should note that analysts have lowered earnings estimates in the past three months, following the company’s announcement that it will temporarily halt production at its Spain plant due to rising energy costs. Alcoa noted that the production halt would reduce earnings by $0.32 per share, which is why analysts have lowered earnings estimates initially. Interestingly, in the past week, analysts have increased estimates by nearly 11%.

Personally, I believe Alcoa will post impressive fourth-quarter results. The reality is that aluminum prices are trekking higher again. The World Bank revealed that aluminum prices jumped from $2,004 per tonne in January 2021 to more than $2,900 per tonne in January 2022. Prices are anticipated to rise 6% this year, thanks to ongoing demand from the auto industry, rising energy prices and supply shortages.

Suffice it to say, Alcoa is the stock to watch tomorrow.

But for today, don’t be discouraged by today’s wild market gyrations. The reality is that earnings work 70% of the time, so given that earnings momentum has tapped the brakes a bit due to tougher year-over-year comparisons, I think companies that achieve better-than-expected results will see their shares climb higher as investors celebrate their results.

It’s why now is the time to make sure you’ve filled your portfolio with fundamentally superior stocks. If you’re not sure where to look, you might want to review my Breakthrough Stocks Buy List. As I mentioned, my stocks should post much strong earnings than the average S&P 500 company. I should also note that I recently created a special model portfolio I call the 5G Hypergrowth Portfolio: Six Stocks to Incredible Wealth. Each company is directly in line to profit from 5G.

I will be recommending another 5G stock on Thursday, after the market close. So, if you join Breakthrough Stocks today, you’ll have access to this new recommendation as soon as it’s released.

For full details, click here.

Sincerely,

Signed:

Louis Navellier 

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:

Alcoa Corporation (AA)

How the FAA’s Latest Decision Will Impact the Rollout of 5G

As I write this, there’s a technology revolutionizing our world. You can’t see it, taste it, or feel it, but I can guarantee you that once it’s fully realized, it will change your life.

I’m talking about 5G wireless technology.

5G has been in the works for several years now, but so far we’ve mainly seen it applied to the internet and smartphones. The big wireless carriers – Verizon Communications Inc. (VZ), AT&T Inc. (T) and T-Mobile US, Inc. (TMUS) – began rolling out their 5G networks in select cities back in 2019. Verizon released its 5G network in Chicago and Minneapolis on April 3, 2019.

By the end of 2020, its 5G network provided coverage for 230 million people and 2,700 cities. AT&T now provides coverage for 250 million customers nationwide. Not to be outdone, T-Mobile’s 5G network reaches 308 million customers.

Interestingly, AT&T and Verizon recently got into a scuffle with the Federal Aviation Administration (FAA). Last month, the FAA raised concerns that a part of the 5G wireless spectrum called the C-band could interfere with aircraft radio altimeters, which are used to help pilots land their aircraft in bad weather conditions. If the pilots can’t see the runway, they can’t land the plans, which, in turn, could cause flight delays and flight diversions. The FAA released 1,462 Notice of Air Missions (NOTAMs) to 50 airports in the U.S. Given this, the FAA wanted to delay Verizon’s and AT&T’s 5G rollout.

At first, Verizon and AT&T pushed back against the FAA’s request, but in early January they agreed to delay the 5G rollout until January 19.

Verizon plans on launching its 5G Ultra Wideband service that will cover 100 million people.

So, while the headlines sound scary, the FAA news in no way means 5G is a bust. Far from it.

The reality is the global pandemic accelerated the 5G rollout, as more and more folks sought fast and reliable networks for working remotely and entertaining at home. A recent “Global 5G Services Market Report” revealed the 5G services market is anticipated to breach $188 billion in 2025, or in other words, the 5G services market is forecast to grow at a compound annual growth rate of 23%.

To me, 5G’s amazing growth potential is just starting to play out and will continue apace for years to come.

In fact, on Tuesday, during my Big Bet Summit, I revealed why I see 5G setting up today to produce a slew of new winners.

Many people expect the transition from 4G to 5G will be in relative “straight-line” proportion to what we experienced when 3G went to 4G. I believe that won’t be the case at all.

The jump to 5G is exponentially bigger – up to 1,000 times faster than 4G versus the 50-fold jump that took 3G to 4G. In other words, for every single device 4G can currently support, 5G can support 1,000 times more devices.

For starters, the 5G smartphones alone offer plenty of profit potential. According to Juniper Research, revenue for 5G smartphones could top $337 billion by 2025.

5G will also enable billions of connected devices to connect, interact and collect data from each other, unlocking untold levels of productivity and innovation for consumers, industries and governments.

Big breakthroughs stemming from other groundbreaking technologies like artificial intelligence (AI), driverless cars and augmented and virtual reality will finally get the lightning-fast connectivity required to realize their full potential.

A landmark study about 5G projects it will drive $13 trillion in global economic output in the coming years. To put that in perspective, the entire GDP of the entire United States economy is just over $20 trillion.

During my Big Bet Summit, I explained in detail how 5G will help those different technologies, as well as the stunning impact it will have on the U.S. economy. In case you missed it, you can watch a replay of the Big Bet Summit here.

And to help folks prepare themselves for the 5G boom, I created a special model portfolio I call the 5G Hypergrowth Portfolio: Six Stocks to Incredible Wealth. Each company is directly in line to profit from 5G. For full details, click here.

Sincerely,

Signed:

Louis Navellier 

P.S. As a reminder, the stock market will be closed on Monday, January 17, in the observance of the Martin Luther King, Jr. holiday. The InvestorPlace offices, including our customer service department, will also be closed. I hope you enjoy the long weekend!

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:

T-Mobile US, Inc. (TMUS)

Why 5G Is a Major Gamechanger in the Tech Space

On Monday, the Georgia Bulldogs beat the Alabama Crimson Tide to win the 2021 College Football National Championship.

It’s just the latest win in a long history of domination… by the Southeastern Conference (SEC).

For all you non-football fans, both Georgia and Alabama are part of the SEC. This means that regardless of who won last, this elite football conference added another National Championship to its list.

And quite the list it is.

Below, we look at which school took the title each year since 2006. A SEC school has won it 12 of those years. Only Clemson, Ohio State, and Florida State have won the title from a non-SEC conference during this period.

Source: NCAA.com

Now, as you might suspect, lots of championships correspond with lots of great players.

So, if you’re a talent scout in the National Football League (NFL), are you going to pay attention to players coming out of the SEC?

Obviously.

That’s why the SEC has the most former student-athletes in the NFL, more than any other conference (Alabama takes the top spot with 53 players on active NFL rosters).

Source: NCAA.com

And as a scout, are you going to spend more time analyzing players from the SEC than, say, the Sun Belt Conference?

No disrespect to the Sun Belt, obviously. It’s just that it’s not on the same level as the SEC when it comes to generating football stars.

So, yes, when you find a conference that produces an abundance of winners, you’d make it your focus. Giving equal research time to lesser conferences just wouldn’t make sense.

Let’s back up a moment…

What in the world are we talking about? Why are we starting today’s Market360 with football?

Because there’s a similar dynamic in investing. Every now and then, a sector or trend emerges that produces an abundance of winners. Far more than is typical.

When that happens, it creates a “make hay while the sun shines” environment for investors. It’s a temporary moment of focused outperformance that can transform portfolio returns.

I see a red-hot sector setting up today to produce a slew of such winners.

When I find a dominant moneymaking trend, I don’t just recommend a stock or two and call it a day.

I analyze these trends from every conceivable angle.

I ask myself: Who are the main players? The manufacturers? The suppliers? The distributors? Are there elements or precious minerals that will be in demand as a result of this trend? Are there other new technologies that will develop? What small, off-the-radar companies with a competitive advantage will corner a significant portion of this new market?

I look at it all. Once I see one of these trends developing, I don’t stop digging for “gold.”

I mean, why have one or two massive winners when you can have eight or nine?

On Tuesday during my Big Bet Summit, I revealed that I see 5G setting up today to produce a slew of new winners. The reality is that there are many different applications for 5G. We have the 5G smartphones, like the latest iPhone, Samsung Galaxy and Google Pixel. With 5G, these smartphones are much faster, allowing users to access sites and download videos in the blink of an eye. The 5G smartphones alone offer plenty of profit potential. According to Juniper Research, revenue for 5G smartphones could top $337 billion by 2025.

And as I discussed yesterday, 5G is an absolute gamechanger that’s going to further foster the growth of other revolutionary technologies like the Internet of Things (IoT), self-driving cars, artificial intelligence (AI) and virtual reality (VR) – just to name a few.

During my Big Bet Summit, I explained in detail how 5G will help those different technologies, as well as the stunning impact it will have on the U.S. economy. In case you missed it, you can watch a replay of the Big Bet Summit here.

I should note that to help folks prepare themselves for the 5G boom, I created a special model portfolio I call the 5G Hypergrowth Portfolio: Six Stocks to Incredible Wealth. Each company is directly in line to profit from 5G. For full details, click here.

Sincerely,

Signed:

Louis Navellier 

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:

What Comes Next Now That I’ve Revealed My Big Bet

I’d like to start today’s Market360 by thanking everyone who attended last night’s Big Bet Summit!

It was a great success, thanks to the thousands of you who joined, and I couldn’t be more excited for what’s coming next.

By the way, if you missed it, you can view the special replay here.

As I said last night, every now and then my stock tracking systems alert me to a massive megatrend, before it becomes red-hot.

Now, many of you may know that my systems are designed to pinpoint fundamentally superior stocks on a case-by-case basis. That’s how I separate the wheat from the chaff, or the “A” stocks from the “C” and “D” stocks. It gives us a chance to beat the market.

But every now and then I see exceptional numbers lighting up an entire sector. And that’s when I stop and take notice.

These same systems helped point me to the PC revolution in the late ’80s, the internet revolution of the mid-’90s, and the rise of the smartphone.

Interestingly, my systems have homed in on a new beacon that’s flashing red right now: 5G wireless technology.

5G tech is an absolute gamechanger that’s going to foster the growth of other revolutionary new technologies like artificial intelligence (AI), autonomous vehicles and virtual reality.

In fact, if I had to put every penny of my life savings into one sector right now, 5G would be it.

It’s why I call this my Big Bet, and it’s why I’m going all in.

A landmark study about 5G by Accenture projects that, by 2025, this technology will drive a whopping $2.7 trillion in the global economic output in the coming years. To put that into perspective, the entire GDP of the U.S. economy is just over $20 trillion.

This transformational technology is going to impact virtually every industry on the planet, from manufacturing and retail to healthcare and autos.

As 5G starts to rollout across the country and the world, the time has arrived to get in on all 5G has to offer, from every angle.

I’ve made doing just that as easy as possible for you by assembling a model portfolio I call the 5G Hypergrowth Portfolio: Six Stocks to Incredible Wealth.

Inside this special report, you’ll get the name, ticker symbol, and buy-up-to price of each one of my small-cap 5G stock picks.

These six 5G hypergrowth stocks are all screaming buys and the absolute best way to play the incredible 5G megatrend that’ll be unfolding over the next few years.

I should add that my Portfolio Grader system gives each stock an A-rating for its Quantitative Grade and a B-rating for its Fundamental Grade, so they have strong fundamentals and are seeing significant institutional buying pressure.

And remember, once you join my flagship small-cap research advisory, Breakthrough Stocks, you’ll get direct access to my new 5G model portfolio.

One of the things my system does best is find solid small-cap stocks with huge upside potential, like the six stocks I’ve lined up in my 5G Hypergrowth Portfolio.

Besides phenomenal growth, my Breakthrough Stocks are posting great profits and crushing their forecasts. When you can get in on a stock like this early on, when it’s still fairly small, that’s how fortunes get made.

I go over all the details in my full presentation.

Sincerely,

Signed:

Louis Navellier 

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:

Don’t Miss Out on Today’s Big Bet Summit!

I wanted to reach out to you a bit early today to remind you that I will be hosting my Big Bet Summit at 4 p.m. today. If you haven’t signed up yet, it’s not too late. Simply click here, and you’ll be all set.

The reality is now couldn’t be a better time to hold my Big Bet Summit. We’ve seen a significant uptick in broader market volatility these past few days, and I know it’s left many investors panicked and wondering where to invest. The financial media is only adding to the confusion, telling investors to sell growth and buy value.

But that’s not what you want to do right now.

The fact of the matter is there is a lot of potential in growth stocks… you just need to find the right ones. Well, my system went haywire recently, and I’m excited to say that not only has it indicated to me the best stocks, but the best sector, too. This doesn’t happen often, but when it does, it’s resulted in some very big winners…

For example, in the late 1980s, my system flagged the potential of the PC industry. It pointed me to:

  • International Business Machines Corp. (IBM) in the early 1990s, when it was trading at the equivalent of just $14 per share… and well before it shot up more than $200.
  • Apple Inc. (AAPL) in 1987 when it was just a $1.49 stock – before it soared as high as 9,500%.
  • A PC maker called Compaq before shares soared as high as 2,460%.
  • And a promising young company called Dell Technologies Inc. (DELL) revolutionizing the PC mail-order business when its shares cost less than a buck, and before they went up more than 500-fold.

And then it happened again in the early 2000s in the energy sector. The result?

  • Occidental Petroleum for 113% gains…
  • XTO Energy for 287% gains…
  • Sunoco for 97% gains…
  • Tesoro Corp. for 150% gains…
  • Valero Energy for 180% gains…
  • Holly Corp. for a 457% gain…

As I said, my system is flashing the same bullish signs now about a certain sector. So, in today’s Big Bet Summit, I’m going to reveal the sector that could offer major upside for investors who jump in early. I hope you join me. If you do, I’ll also show you how to access two of my stock recommendations to play this trend – absolutely free.

Click here to reserve your spot now. Again, it will kick off at exactly 4 p.m. today. I look forward to speaking with you soon!

Sincerely,

Signed:

Louis Navellier 

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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