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April Inflation Comes Hot… Why Louis Navellier Doesn’t Expect Relief at the Pump Anytime Soon… But He’s Optimistic in This Corner of the Market… Luc Langeau Says Market Variance Is Getting Worse… ‘Summer of Stagflation’
The April Consumer Price Index (CPI) report this morning revealed the hottest annual inflation rate since May 2023.
The figure came in at 3.8%, up from 3.3% in March, and higher than estimates of 3.7%.
The obvious culprit is energy. Costs jumped nearly 18% year over year, the largest annual increase since September 2022. Gasoline rose 28.4%, and fuel oil rose 54.3%.
But the rise in prices is not limited to energy…
Shelter costs also rose 3.3% versus 3% in March. Food prices rose by 2.3%. Airfare prices jumped 2.8% for the month alone, putting the 12-month gain at 20.7% — a number that would surprise anyone with a summer trip in their wallet.
Overall, core inflation (which excludes food and energy) rose to 2.8% year-on-year. This is higher than the March reading of 2.6% plus expectations of 2.7%. But it’s the monthly reading that really matters – core prices rose 0.4%, nearly double the 0.2% pace recorded in February and March.
This number is noteworthy because when the underlying economy starts to accelerate, it means that the energy shock does not stay in its course – but rather bleeds through into the broader economy.
For consumers, the math is worrying…
Wages aren’t keeping pace, credit card balances are near record levels, and now the monthly cost of living — gas, groceries, rent — is rising again. This morning’s data explains why the University of Michigan Consumer Confidence Survey last Friday reported the lowest reading since it began tracking the data in 1952.
Bottom line: We appear to have reached a tipping point where the Iranian conflict is expanding from being merely a geopolitical story to a kitchen table story.
Unfortunately, we should not expect any relief in oil prices soon
That’s the bottom line of legendary investor Louis Navellier — a truth that affects cost-conscious drivers, inflation-wary investors, and companies already grappling with rising transportation and input costs.
Let’s move on to the latest issue of Lewis from Stock breakout From last week:
I do not expect any decline in crude oil prices or at gas stations until October, when global demand naturally declines.
A peace deal and the full reopening of the Strait of Hormuz would also lead to lower energy prices, but even when that happens, it will take some time before prices fall back to pre-conflict levels.
How long can this take?
here Market place:
The rule of thumb is that it will take as long as the duration of the outage, said Claudio Galimberti, chief economist at Rystad Energy.
So, if two and a half months have passed, it will take another two and a half months to return to normal.
We are still dealing with supply disruptions, so estimates are of little value. But we can say that the market probably won’t see oil return to the $60 level anytime soon.
This is important because continued high energy prices create problems for consumers and Wall Street alike. Which naturally raises the question Lewis poses to readers:
So, what should investors do in this environment?
Follow the money
In the Lewis case, he highlighted the acceleration in capital spending from… alphabet (Google), Amazon (Amzn), meta-platforms (dead) and Microsoft (MSFT) On their earnings calls two weeks ago:
Analysts expect these four super-fast companies to spend about $670 billion on artificial intelligence in 2026.
After reports, this estimate jumped to $725 billion. Spending is expected to accelerate further in the coming years.
For Lewis, the investment roadmap is clear and straightforward:
Follow the money.
This puts companies in a position to make the most of the wave of AI-driven spending and profit growth.
That’s why AI infrastructure is on his radar. One aspect of this construction, in particular, seems particularly compelling.
Here’s Lewis:
As the AI revolution intensifies, there will be a huge increase in demand for storage solutions – especially NAND flash storage.
NAND is the technology behind the solid-state drives and memory chips that store data in everything from smartphones to data centers. It’s fast, compact, and power efficient – making it the storage solution of choice for AI workloads.
Training models, running inference, and running machine learning applications all require massive amounts of data to be stored quickly, reliably, and securely, Lewis explains. This directly translates into higher demand for NAND memory.
More importantly, the show is not keeping up with the pace.
according to Commercial timesDemand for NAND is expected to grow by more than 20% this year, but supply is on track to rise by only 15% to 17%. This imbalance creates strong tailwinds for leading memory players.
For example, sandisk (Your support) — the pure NAND provider that spun off Western Digital in early 2025 — is up more than 3,500% over the past 52 weeks.
Additional leading NAND stocks also made big moves, leading to questions…
Is it too late?
Louis says no. With significant new production capacity unlikely to arrive before 2027, supply flexibility remains constrained. This means that NAND prices could remain high for much longer than many investors expect.
So, while the momentum has certainly been explosive, Lewis believes it is driven by a structural imbalance in supply and demand with plenty of runway still ahead. That’s why he just drove Stock breakout Subscribers to the new NAND position:
As the AI revolution intensifies, there will be a huge increase in demand for storage solutions – especially NAND flash storage.
That’s why I’m adding a new stock to my buy list this month.
I won’t reveal it today out of respect for Louis Stock breakout subscribers, but the investing legend will be giving away one of his favorite stocks to today’s market at home Live event tomorrow at 1:00 PM ET.
As we highlighted here in digestHowever, Lewis remains particularly bullish on small stocks for several reasons — including what he believes will eventually become a much easier monetary policy environment under potential Fed Chairman Kevin Warsh.
To be clear, Lewis is not calling for immediate rate cuts – especially after this morning’s hot CPI reading. But he believes the market is underestimating how accommodative policy could become under Warsh, and how that could pour gasoline on the names of leading small caps and AI infrastructure.
You can get the full story directly from Lewis tomorrow at 1:00 PM ET. Just click here to reserve your seat today.
Before we move on, one note…
Given everything we’ve covered so far today — hot inflation, record-low consumer sentiment, and a beleaguered Fed — you might expect some defensive posturing from Lewis.
Not much.
Consider what he wrote to subscribers last week Stock breakout problem:
The last time I saw anything like this was 1999.
At the time, the dot-com boom pushed stocks to extraordinary heights. Today, we are witnessing a boom in AI data centers.
The similarities are striking. And if history is any guide, We are still in the early stages.
But this enthusiasm does not apply to all stocks…
In fact, our “tale of two markets” is becoming clearer.
We’ve been tracking this bifurcation for years now. But this earnings season makes things even better.
There are two stock markets operating simultaneously today. Artificial intelligence market. And the “everything else” market.
To be clear, “everything else” was not bad. It has been addressed by artificial intelligence.
Over the past month, the S&P 500 is up nearly 7%. But abstract AI shares (By looking at US 500 excluding AI Enablers Price Return Index, SPXXAI), and the index did not even gain a full 1%.
Meanwhile, data from Jefferies shows that AI companies have generated more than 80% of the S&P 500’s year-to-date returns. If we exclude the AI component, the index will advance by only 2%.
But here things change during this earnings season…
While “lagging but good” was the story of yesterday for many non-AI stocks, we’re starting to see some really ugly numbers.
Our technology expert Luke Lango, editor Innovation investorThis deterioration has been tracked. Last Tuesday, he pointed to Whirlpool as a red flag worth noting:
Whirlpool has effectively confirmed the basic economic reality.
The company directly stated in its earnings report that “the war in Iran led to a recession in the US industry as consumer confidence collapsed in late February and March.”
Demand for devices in the United States fell by 7.4% in the first quarter, including a 10% decline in March alone. CEO Mark Bitzer compared the slowdown to conditions seen during the global financial crisis.
Now, as we covered here at digestLuke believes we are entering the “summer of AI.” But in keeping with the “tale of two markets” dynamic we track, Locke also says that some companies are entering a “summer of stagflation”:
AI companies report excellent earnings, and their stocks often rise.
Other companies report troubling earnings, and their stocks often suffer.
Welcome to the summer of AI… and also the summer of stagflation.
This dynamic will continue. Which means our job is to make sure you benefit from the summer of AI – and avoid the summer of stagflation.
Coming full circle, can you guess which corner of the market Luke is highlighting and which you are likely to excel in during the AI Summer?
You guessed it — “AI memory dogs,” he said, specifically citing SNDK as well as other NAND-focused plays directly related to the growing demand for AI infrastructure.
This is why both Lewis and Locke keep returning to the same basic message…
Follow the wave of AI spending.
Bottom line: While most of the market may continue to struggle through slower growth and higher inflation, Companies building artificial intelligence may be in the early stages of a massive, multi-year process.
We’ll keep you updated on all these stories here at digest.
I wish you a good evening,
Jeff Remsburg
(Disclaimer: I own GOOGL, AMZN, and MSFT)
