December 5, 2025

 

(AN EXTRAORDINARY PREDICTION FOR 2026 FROM A LONGTIME FUND MANAGER)

 

December 5, 2025

 

Hello everyone

 

Louis Navellier is a veteran money manager who has been navigating the stock market since the 1980’s.   He is the founder of Navellier & Associates, a firm with about $1 billion in assets under management.

His time in the markets has enabled him to learn some valuable insights.  Navellier appears to have developed a deep insight into what causes stocks to rise or fall – a knowledge that has helped keep him bullish in 2025, despite reasons for concern.

The Fed has been back into a corner by its dual mandate, forced to cut rates even as inflation rebounds.  Companies are navigating surging import taxes due to President Trump’s tariff strategy, and many households are increasingly struggling to make ends meet as layoffs rise and pay raises shrink.

Navellier’s stock market outlook for 2026 suggests he remains unfazed by those trends.

In fact, he believes investors can expect “economic nirvana.”

Navellier is incredibly optimistic.

While the unemployment rate has ticked up to 4.4% from a low of 3.4% in 2023, according to the Bureau of Labor Statistics unemployment report, and layoffs exceeded 1.1 million through November, up 54% from last year, according to Challenger, Gray, and Christmas, Navellier believes the Fed hasn’t fallen too far behind the curve to support the labour market.

Navellier notes that ADP reported on Wednesday that 32,000 private payroll jobs were eliminated in November, which was well below economists’ consensus estimate of a 10,000 gain.  He believes the “Fed has to cut key interest rates due to its unemployment mandate.”

Lower interest rates support economic activity, which, in turn, leads to increased revenue and higher earnings for companies.  Since stocks tend to follow earnings over time, this creates a bullish backdrop for stocks next year, assuming the Fed cooperates.

Navellier shows that revenues are up 8.2% (a 12-quarter high), while earnings are up 16.5% (a 16-quarter high), and the average earnings surprise is 9.6% (a 16-quarter high).

Navellier reminds us that revenues are running at the highest pace in three years, while earnings and earnings surprises are running at the highest pace in four years.  Furthermore, he forecasts revenue and earnings should accelerate in 2026 due to higher guidance, especially from the data centre companies that have a growing order backlog.

In September, IDC said that business spending on AI “will have a cumulative global economic impact of $19.9 trillion through 2030 and drive 3.5% of global GDP in 2030.  The research indicates that every $1 spent on AI will “generate $4.60 into the global economy.”

The rapid adoption of AI and productivity advances associated with it should remain a tailwind in 2026.

One of the biggest concerns about the market has been the rise in inflation following the enactment of new tariffs.  Navellier believes that inflation will stabilize as we progress deeper into 2026, and deflationary forces should help keep inflation in check.

His reasoning for this thesis:

Low crude oil prices

Weak economies around the world

U.S. imports deflation from China.

The consensus appears to be that inflation will plateau around 3% as companies take a measured approach to passing along higher import costs.

In summary, Navellier believes naysayers will have to admit defeat, as he sees the U.S. will be characterized by 5% GDP growth without any significant inflation.

 

 

SOMETHING TO THINK ABOUT

Maybe You Already Have Enough

One of the most powerful money tales is the parable of the Mexican fisherman.

An American businessman visits Mexico and meets a local fisherman.  The American is shocked to learn the fisherman only works a few hours a day.

“What do you do with the rest of your time?” the American asks.

“I sleep late, hang out with my family, read, take naps, and play guitar with my friends,” the fisherman says.

“You’re doing this all wrong.  I have an idea,” says the American.  “You should work all day.  Borrow money and buy another boat.  Hire more fishermen to work for you.  You could make so much more money that you’ll be retired in ten years.”

“What would I do in retirement/” the fisherman asks.

“You could sleep late, hang out with your family, read, take naps, and play guitar with your friends,” says the American.

(cited in The Art of Spending Money by Morgan Housel – Jacquie’s Post Book of the Month for November)

 

 

Cheers

Jacquie