August was certainly a wild month for the stock market! The S&P 500 and Dow notched new highs, which were shortly followed by big selloffs. However, the selling always came on light volume, which is why I was never worried.
The stock market aside, we are living in a very chaotic world right now, as the unfolding tragedy in Afghanistan and the spreading COVID-19 Delta variant continue to dominate the news. But as tragic as these recent events have been, there are some positives amidst the chaos.
So, in today’s Market360 article, I’d like to share two big positives with you: the U.S. economy and ultralow interest rate environment.
The Conference Board now anticipates that the U.S. economy will grow at a 6% annual rate in 2021. Even more impressive, The Wall Street Journal recently reported that U.S. GDP increased 12.2% year-over-year in the second quarter, versus China’s 7.9% GDP growth. The massive order backlog due to supply chain glitches effectively ensures that the U.S. economy will grow at a 6% annual pace this year. Robust job growth and new consumers are also expected to boost retail sales and serve as the powerful one-two punch to support GDP growth.
In addition, Treasury yields remain ultralow. When Kabul, Afghanistan fell to the Taliban in mid-August, the 10-year Treasury yield dropped back below 1.25%. The ongoing chaos around the world is likely to help keep U.S. rates low for the foreseeable future, despite the financial media proclaiming that the Federal Reserve will start to curtail its quantitative easing. As we’ve discussed, the Fed may announce tapering at its September or December Federal Open Market Committee (FOMC) meeting, but I don’t look for the tapering to actually happen until 2022.
Of course, the Fed’s easy monetary policy has created an inflation bubble. But we should see inflation ease up a bit in the fall, especially as demand for crude oil and natural gas ebbs with cooler temperatures across much of the U.S. Unfortunately, much of the wholesale inflation is here to stay.
In addition, I will be releasing two brand-new fundamentally superior buys that make solid-state batteries, which positions them well to be some of the biggest winners of the shift to electric vehicles (EVs). Most of the current EVs primarily use lithium-ion batteries, which require lithium, nickel and cobalt. But there’s an acute battery shortage due to the lack of battery factories, as well as the high prices for nickel and cobalt.
Add in the global semiconductor shortage, and EV production has been curtailed dramatically. In fact, the deliveries of the Mexican-made Ford (F) Mach-e has already been postponed, and General Motors (GM) is in the midst of a massive and expensive recall of all the batteries in the Bolt EV. In other words, unless new battery technologies are utilized, the Biden administration’s 50% goal by 2030 is just a pipe dream.
Some companies, though, are turning to other alternatives. Apple (AAPL), for example, recently turned to the Chinese company CATL for iron-phosphate batteries for its upcoming EV. Iron-phosphate batteries are anticipated to be safer, as they are less fire prone, and they can better accommodate fast charging.
Now, the patent on CATL’s iron-phosphate batteries expires in 2022, so the big Korean battery manufacturers like LG Chem and SK Innovation could start making their own iron-phosphate batteries in the very near future. Apple even sent a team to South Korea recently to line up suppliers for its EV, which will likely be built by Canada’s Magna International (MGA). Magna currently makes the Jaguar iPace SUV in Austria.
Solid-state batteries are also in the mix now. Solid-state batteries offer greater range due to higher energy density, as well as faster charging and safer operation. At the recent Pebble Beach car show, Audi introduced its next super EV, the Skysphere Concept. The EV is likely to use solid-state batteries from QuantumScape (QS). Audi is also expected to soon announce its Grandsphere flagship and versatile Urbansphere concept EVs.
If you’re interested in the names, I recommend you sign up today so you can read my Growth Investor Monthly Issue for September when it’s hot off the presses. Not only will I share the major positives in the market and my two solid-battery buys, but I will also release two brand-new dividend stock picks and my Top 3 list of dividend stocks on my Elite Dividend Payers Buy List.
P.S. There’s a great divide opening up in America and investing in my Growth Investor stocks will help get you on the right side of it. On one side is a new aristocracy that’s amassing more wealth more quickly than any other group in American history. For people like me, the one percent, life has never been better, more prosperous.
On the other side, the opposite is happening. Wealth is flowing out of the pockets of ordinary Americans at an unprecedented rate.
What’s happening is only going to gather in strength over the coming decades. It certainly won’t weaken.
Few Americans even know that any of this is going on. I’ve never seen anyone from my side of the chasm step forward to explain any of these things.
It’s why I put together this video. In it, I’ll lay out exactly what is happening, including several key steps every American should take right now.
It doesn’t matter if you have $500 in savings or $5 million. You can benefit from the information in this video.
It’s free to watch and by doing so I know you’ll be ahead of everyone else struggling to understand what is really going on.
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:
General Motors (GM)