Exclusive Interview: Louis Navellier, Chairman and Founder of Navellier & Associates

Benzinga

Louis Navellier, Chairman and Founder of Navellier & Associates joined Benzinga's Premarket Playbook this morning to discuss his outlook on the markets and what he sees for the rest of 2025.

Transcript

00:00Good morning. Happy Monday. How you doing, my man? I'm good. Good to see you here. I know we couldn't

00:05get together last week, but thank you for making the time here today. Let me just start off by

00:10saying I go through analyst notes every day here. I want to take a look at what people think about

00:16the market, where they think the market's going, and all of that. And I go through two or three

00:20of your quotes per week. Of all of the analysts that we've taken a look at, without a doubt,

00:25you have been the most accurate on all of the stuff going on with the tariffs and all of that.

00:31So I'm just going to start off here pretty simply. What do you see for the market for the rest of the

00:35year here in 2025? Well, I think I'll be up at least 20% between now and in the year because

00:41my earnings are growing at 58%. So that's with PE compression. S&P might only be up 12% or so

00:50because the market's still kind of narrow. You've still got to be in predominantly AI and

00:55or data center related companies. The economy should be get a turbo boost here as soon as

01:05the Fed gets together and starts to cut rates. You know, we had not only two dissenters, we're

01:11going to have a third soon because the FOMC member that didn't show up last week just resigned.

01:17So Trump will reappoint somebody that will want to cut. So we'll have at least three

01:24dissenters next meeting. And of course, market rates have come down. And, you know, we are going

01:32to have a nice tailwind from the Fed cutting. And we are in the midst right now of a global interest

01:38rate collapse. So Treasury yields, I expect to go lower. I expect the 10 year to be at three and a

01:43half percent sometime next year. Do you think it's a pretty safe bet that September we're going to get

01:48this first cut? Yeah, right now it is. Yeah. I mean, if I was the Fed, I'd cut now. Would you have

01:54cut in July if you were part of the Fed? Absolutely. Okay. In the wake of the in the wake of the what

02:02happened with the payroll report, the big downward revisions, that's shocking. I realize they have

02:07seasonal adjustments, but that's ridiculous. So there was a problem, you know, and we got to get

02:14to the bottom of it. And but the bottom line is the labor market softened as as Christopher Waller

02:20talked about, you know, he went on Bloomberg for 30 minutes explaining this before the meeting.

02:25And so kudos to him for knowing what's going on. Now, you had wrote last week, or perhaps you didn't

02:32write it last week, but I had read it to the group last week, your favorite sectors post this whole like

02:39tariff deal, or the deals with other countries, do you still like the mag seven and LNG? Or what else do

02:45you like? I like I, well, I realized the mag seven had some good results. Apple was a big surprise.

02:53That was the weakest link. And obviously, the AI implementers, you know, Microsoft meta, we're

02:59spectacular. But I like to refer to as a magnificent one. I'm grossly overweight in the video. And

03:07it's over 16% of our portfolios, and I have no intention of selling it. I have a lot of super

03:13micro. And, you know, I think plant air announces after the close today, and you know, that might

03:22be one of the new magnet seven stocks coming up.

03:26Okay. Now, I'm assuming that you see two cuts this year, we just talked about September,

03:31I would assume that you also think we're going to get one in December. What do you see for next

03:35year, then looking ahead?

03:37Well, it depends on market rates, but market rates should continue to meander lower. So we're in this

03:42global interest rate collapse for a very simple reason. There's a demographic problem. You know,

03:49the world is shrinking, at least in the industrial world is. So Asia has no household formation

03:56whatsoever. And it's hard to grow when you lose households. Same thing for most of Europe, except

04:02for maybe Spain, which has a lot of immigration. And it's really hard to grow your economy when

04:08you're losing households. Now, you can counteract that by immigration. But as we've seen in Britain

04:15and France and Germany, they're not able to assimilate their immigrants. Obviously, the EU

04:22might have overdone it, at least for France and Germany. So what makes America great is we're

04:29still pro-family, at least we are in the south and the mountain west, we're still creating households.

04:33And household formation is very important for economic growth. That's why Utah is the fastest

04:38growing state of the country. And then in addition to having our normal household formation, we do,

04:47you know, have a lot of immigration and the legal kind, of course. And those people are quickly

04:53assimilated. And I don't think Trump's anti-immigration. I mean, he just wants everybody

04:57to be legal and have green cards. So it's going to be very interesting, but we just have a better

05:02model in the rest of the world. We're younger. We also have 50 states competing for business,

05:07which is very unique among any country. And that on-shoring is real. You know, the EU, Japan

05:16and South Korean trade deals was $1.5 trillion of on-shoring or investment in America. So we're

05:24over $10 trillion now. So it seems to me mostly automotive semis and soon to be drugs. That's

05:31maybe why Switzerland is so ticked at us right now is trying to on-shore their drugs. And from

05:37Switzerland, Ireland, China, everywhere.

05:39Okay. Yeah. Real good stuff there. Just flat out here, are tariffs causing inflation?

05:44Powell said in his last meeting, it could be a one-time bump. What might be offsetting this?

05:48What's going on?

05:50Well, first of all, Chairman Powell's not an economist. Okay. And only 14% of the CPI and

05:56inflation is related to imports. And we had goods dumped on us. So that was deflationary.

06:03China's had deflation since May of 2022. It's now running at the highest annual rate of 3.6%. So

06:11that is deflationary. And then we had the lower energy prices. That was largely deflationary. And

06:20economists missed inflation estimates for five straight months. So I do think we'll be fine. I think the

06:27dollar is going to strengthen here immensely from here. And just the rally in the dollar will largely

06:32offset the tariffs.

06:34Okay. And you know, that's, you kind of touched on it right there. We keep hearing from a pocket

06:39that inflation is coming. Inflation is coming. It's coming from the tariffs. Is that true?

06:45It did. It wasn't the first time. It's not this time. You know, I know Howard Lutnik personally.

06:49He's a great guy. My kid went to school with his kid. I knew him for some business things too. But

06:54he does want to replace the income tax with tariffs. But we are headed to $60 billion a month in tariff

07:02revenue. You saw in June when we had $27 billion a month in tariff revenue, we actually had a budget

07:08surplus for the first time since 2017. So I just don't think anybody sees the big picture. When they

07:16were reconciling the big, beautiful bill, they weren't allowed to use the tariff revenue.

07:20And the other reason I think Trump wanted to do at least especially the 10% baseline tariffs

07:26is we have a huge underground economy in America. He wanted them to pay something. So it was either

07:32national sales tax or tariffs. So we're proceeding with the tariff plan. It's not inflationary from

07:40what I can see. It is going to create a windfall of not only unshoring, but tax revenue.

07:47And so I just think we ought to get with the plan and celebrate it. And it did distort GDP,

07:54of course. The imports in the first quarter was a 4.61% drag on GDP. And then the better trade

08:03number in the second quarter was over a 3% increase, I think 3.17%. So it's confusing how it's

08:11distorting GDP. But it's just time to cheer up and be happy. And obviously, President Trump has a lot

08:18of opposition in Britain, and as well as our American media. So it just, you know, I read that

08:25stuff. And it's just, it's, it's just scare tactics. Yeah. And perhaps that's why you've been

08:30so spot on here. Okay, you kind of touched on this already a little bit earlier. What do you make of the

08:36firing of the BLS lead? Is this a nothing burger? Is this, what do you make of this?

08:41Well, it's Trump. I mean, it was a Biden appointee, but he wants to put his own people in. That's what

08:45Kevin Hassett just said on the weekend talk shows. And he has the right to do that. So, but I've

08:52always been critical of the Labor Department, their seasonal shenanigans. You know, we knew in June

08:58something was wrong, because a lot of the hiring was teachers, but then teachers get laid off in

09:03the summer. So we, we, I wasn't surprised by the downward revision, but the May revision really

09:09surprised me. So yeah, just get rid of the damn seasonal adjustments. You know, when January rolls

09:15around, it's like 600,000 jobs. It's ridiculous. So, you know, quit, quit planning for seasonal hiring

09:22when everybody shops online. You know, it's, it's, I can't fix stupid. Okay. And I'm not sure

09:30the new, new appointee of the Labor Department will be able to fix it, but you really, there's

09:35something wrong. And, you know, I, I, you know, take Ed Yardini and Shepperson, private economists.

09:41I don't see any of the problems that, that Powell has warned about. And I think Powell got into a bubble

09:48and, you know, the fact that the Fed ignored the economic data, it's just shocking. And,

09:55and I, I think that's, that's, that's regrettable. You know, I mean, everybody wants free trade.

10:01We're going to have more free trade now because of the tariffs, because the only way you get your

10:07reciprocal tariffs knocked down was to basically have free trade. And, you know, and you, you know,

10:12it, it just, the way Trump negotiates is so uncomfortable. Uh, uh, it's just, it, it's hard

10:20to, while it's going on, it's hard to, um, uh, be not, not be confused, but the bottom line,

10:27he got what he wanted and the tariffs aren't as bad as we thought. And it's now going to cost

10:3310 trillion of on short. So let's, we're going to have 5% GDP growth in upcoming years.

10:38Yeah. I think you put it perfectly there. It does make people uncomfortable, but perhaps we should

10:43just stop the hand wringing and wait and see how this all, how this all plays out here. Um,

10:48Louie, thanks so much. Thanks for the time. Be well. Okay. Take care.

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