Dear Savio, The stock market took a tumble today, as traders rushed to clean out their inventory before the weekend. At one point, the Dow and S&P 500 slipped more than 2%, while NASDAQ dipped more than 3% as mixed earnings results from Facebook, Amazon, Apple and Google weighed on the tech-heavy index, before rebounding strongly into the close. I know the recent stock market gyrations are difficult to stomach, but the reality is there’s a lot of scary news that’s causing investors to run to the sidelines. We have the presidential election just a few days away, reinstated coronavirus restrictions in Europe following the record rise in coronavirus cases over the past week, and all the talking media heads telling viewers what to think. However, I look for that fear to ebb and the clouds to clear as early as Wednesday following the presidential election. As I’ll discuss more in-depth in today’s Growth Investor Monthly Issue and Breakthrough Stocks Weekly Update, there’s historically a presidential “honeymoon” that typically lasts 100 days. In the meantime, we have blowout earnings results to provide support for our stocks. Just today some of our stocks rallied more than 10% on the heels of their positive quarterly reports. I know other stocks have pulled back following their earnings beats, but the reality is sometimes good stocks are hit with profit-taking. These dips create new opportunities for us to buy our fundamentally superior stocks at a bargain. Remember, good stocks always bounce back. We also remain in a V-shaped economic recovery. The Atlanta Fed revised GDP growth up to 36.2%; consumer spending rose 1.4% in September, versus 1% in August; and unemployment claims continue to fall. The U.S. is roaring back, and given that we’re invested in companies well-positioned to benefit from the economic recovery, I look for our stocks to continue trekking higher over the longer term. Folks, the truth of the matter is that we’re in a washing machine environment right now. Most stocks that post strong earnings results will outperform, so I encourage you not to let today’s volatility ruin our earnings party. The dust will settle, and I expect our stocks to emerge as the market leaders in the upcoming weeks and months. To further discuss today’s stock market gyrations, as well as my thoughts on the recent economic data, Apple’s earnings, electric vehicle (EV) companies and SPACs, I recorded a Special Market Podcast. You can listen now by clicking here. ********************* The V-shaped economic recovery persists! On Thursday, the Commerce Department revealed that the U.S. economy surged at a record 33.1% annualized rate in the third quarter. That not only exceeded economists’ forecasts for 32% but it is also up from the dismal 31.4% contraction in the second quarter. Americans were clearly back out spending money during the third quarter, as personal consumption soared 40.7%. That’s up from a 33.2% decline in the second quarter and beat economists’ estimates for 38.9%. Remember, consumer spending accounts for nearly 70% of U.S. GDP growth, so this was a very, very positive GDP report. The housing market remains one of the hottest corners of the U.S. economy right now. The reality is that the Federal Reserve’s ultralow key interest rate policy has ignited a housing boom. Last week, the Commerce Department reported that building permits soared 5.2% in September to an annual rate of 1.553 million, and housing starts rose 1.9% in September to an annual pace of 1.415 million. Clearly, the record-low 30-year mortgage rate is helping to stimulate home sales and boosting homebuilders’ confidence. Now, on Monday, the Commerce Department revealed that new home sales dipped 3.5% to an annual rate of 959,000 homes in September. Economists had expected a 2.8% increase. However, new home sales have soared 32.1% year-over-year and should remain robust given that mortgage rates will stay low for the foreseeable future. The Fed has already stated that the near-zero interest rate policy will persist through 2023. And no matter who wins the presidential election on Tuesday, the federal deficit will remain above 100% of GDP. With such a massive debt burden, the Fed cannot raise key interest rates, since the interest on Treasury debt would crush the federal budget deficit. As a result, the U.S. dollar will remain under pressure given that the Fed will need to print more money to monetize the Treasury debt. The good news is that a weak U.S. dollar is great for multinational companies. That’s one reason why third-quarter earnings and sales have been phenomenal in recent weeks. I’ll have more details on how our stocks are faring in the current earnings season in your Growth Investor November Issue and the Breakthrough Stocks Weekly Update. A weaker U.S. dollar also triggers commodity inflation; commodities are priced in U.S. dollars. The Fed has been trying to reignite inflation this year, since inflation stimulates economic growth—and our central bank has been fairly successful in these efforts. Of course, the stock market is the easiest place for many investors to protect themselves against inflation. The bottom line: Once all of the uncertainty surrounding the presidential election shakes out next week, I still look for money to pour back into the stock market and propel our Model Portfolio stocks higher. Now, let’s take a closer look at my outlook for November and the presidential election, as well as consider recent third-quarter earnings results in your Growth Investor Monthly Issue for November and the Breakthrough Stocks Weekly Update. Growth Investor November Issue You may have noticed that our Growth Investor Buy List has thrived this year, despite all the negative headlines surrounding the presidential election and coronavirus pandemic. In fact, we’re sitting on more than 100% gains in 11 of our High-Growth Investments and in two of our Elite Dividend Payers. In other words, our Growth Investor stocks have prospered in uncertain times. What’s great is that a lot of the uncertainty that’s been plaguing the stock market for much of this year will be lifted following the presidential election on Tuesday. As we’ll discuss in your Growth Investor Monthly Issue for November, there’s been a record number of early voters. So, a contested election is growing less and less likely. Plus, a lot of the fear-mongering headlines associated with the coronavirus should also diminish after the election now that there’s FDA-approved treatments and a vaccine in the pipeline. I should also add that the third-quarter earnings season has been phenomenal, with the vast majority of companies exceeding expectations. You know what that means: All of the money that’s been sitting on the sidelines should pour back into the market. Considering that our Buy List stocks are characterized by strong forecasted sales and earnings growth, our Growth Investor stocks should lead the market higher and are poised to make even more money in the upcoming weeks and months. To ensure that we remain invested in the crème de la crème and well-positioned for yearend strength, we’re making a few changes to the Buy List this month. In your Monthly Issue, we’ll cut ties with our sole C-rated position in the High-Growth Investments Buy List. This action will free up some cash for this month’s three new buys: two High-Growth Investments and one Elite Dividend Payer. The bottom line: We’re not entering the seasonally strong time of year—and it’s time to cheer up! Read all about it here. Breakthrough Stocks Weekly Update It seems the fear-mongering financial media had to get one last “scare” in ahead of Halloween. Most of the scary headlines emanated from Europe this week, as rising coronavirus cases led several European countries to reimpose social distancing and lockdown restrictions. But the reality is that there is an FDA-approved treatment for the virus and vaccines in the pipeline. So, I’m hopeful that a lot of the negative news associated with the coronavirus will diminish after the presidential election. In the meantime, I know the market’s gyrations were gut-wrenching this week. Wall Street largely ignored wave-after-wave of positive earnings. But you can’t keep a good stock down for long, as evidenced by Thursday’s report from Sturm, Ruger & Company (RGR). Sturm, Ruger reported 53.4% annual sales growth and 414.8% annual earnings growth for its third quarter. The company also topped analysts’ earnings estimates by a stunning 43.3%. The stock rallied more than 4% on Thursday and climbed 8.6% higher in the past week. And I fully expect this trend to continue as more of our Breakthrough Stocks release results in the coming weeks. In today’s Weekly Update, we’ll review the 12 earnings announcements from the past week, as well as take a closer look at the 10 reports scheduled for next week. Overall, I’m pleased with our Breakthrough Stocks results so far, and I look for our fundamentally superior stocks to lead the market higher after the presidential election next week. Let’s look at the details. Sincerely, 
Louis Navellier
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