We’ve been talking about quantum computing a lot lately – and rightfully so.
After all, Big Tech is making major investments in it, including Alphabet Inc. (GOOG), Microsoft Corporation (MSFT) and Amazon.com, Inc. (AMZN). They’re developing quantum chips that can perform computations in seconds that would normally take a classic computer thousands of years to complete.
But of all the Big Tech companies, I think NVIDIA Corporation (NVDA) is on the path to becoming the leader, which it will make clear to all the other quantum players next Thursday, March 20, when it hosts its Quantum Day, or “Q Day.”
This is where I predict NVIDIA will make a major announcement. Not only will it cause my No. 1 pick to take off like a rocket, but it will also fuel a fresh rally to help turn the entire market around. (For more details on the event, click here and watch a replay of my summit, The Next 50X NVIDIA Call.)
But the reality is we can’t take our eye off what else is going on in the markets right now.
You see, tariffs have continued to weigh on investors.
On Tuesday, March 4, Trump implemented 25% tariffs on Canada and Mexico, as well as the 20% tariffs on China. That sent the stock market spiraling lower. Even though President Trump backpedaled and postponed some of the tariffs on Canada and Mexico until April, it was too little, too late for many investors. And this week, he placed a 25% tariff on steel and aluminum, and threatened a 200% tariff on alcoholic products from the European Union (EU) if it doesn’t remove the tariff on imported American whiskey.
I know that a lot of investors are rattled by the ongoing “tit for tat” between President Trump and Canada, Mexico, China and Europe.
Obviously, a lot of people in the media aren’t fans of President Trump. And I will acknowledge that he can be a bit erratic. But the ultimate goal of all this is to have free trade.
For example, the European Union charges a 10% tariff on American cars imported into Europe. The U.S., on the other hand, charges 2.5%.
You get the idea.
The fact is this is really up to Commerce Secretary Howard Lutnick.
I know Howard Lutnick – my son went to school with his son, and I think he’s a wonderful guy. He’s going to be a cheerleader for America, and the ultimate goal is to have trillions in onshoring.
This “tit for tat” has certainly weighed on the markets, but thankfully, some positive data mid-week helped bring some investors off the sidelines. I’m talking about the latest Consumer Price Index (CPI) and the Producer Price Index (PPI) reports.
These reports were critical, because investors and consumers alike are beginning to feel pressured by all this tariff talk.
The Federal Reserve is feeling the heat as well. So, in today’s Market 360, let’s take a look at this week’s latest inflation reports and what they mean for future key interest rate cuts. Then, I’ll share more about how you can take advantage of the next investment opportunity that could turn the entire market on its head.
Consumer Price Index (CPI)
On Wednesday, the CPI report came in better than expected. Prices rose 0.2% in February, which beat expectations for 0.3%. On an annual basis, prices increased 2.8%, below January’s 3% annual gain and economists’ expectations for a 2.9% rise.
Core CPI, which excludes food and energy, showed a 0.2% increase over the prior month, compared to January’s 0.4% monthly gain. On an annual basis, core CPI went up 3.1% over last year. That’s down from 3.3% in January and marks the lowest yearly increase since April 2021.
Food costs are still somewhat elevated, largely due to eggs. According to the Department of Agriculture, egg prices are predicted to increase by 20% in 2025.
On the bright side, part of the drop in CPI last month can be attributed to a cooling in owners’ equivalent rent, or shelter costs. The CPI report showed that owners’ equivalent rent only rose 0.3% in February, down from a 0.4% pace in January.
This is critical, folks, because housing costs have been responsible for about half of the inflation in recent CPI reports. So, now that shelter costs are finally cooling, this bodes well for future reports.
Producer Price Index (PPI)
Thursday’s Producer Price Index (PPI) showed that wholesale inflation is also cooling down. The PPI was flat in February, compared to expectations for a 0.3% increase. Excluding food and energy, “core” PPI decreased 0.1%. Economists were looking for a 0.3% rise.
Service costs were also down 0.2%, so this tells me that a strong U.S. dollar is helping to squelch wholesale inflation.
Now, January’s numbers were revised up to 0.6%. So, we’ll have to keep an eye on revisions, but it looks like there’s no wholesale inflation.
Why Does This Matter?
Now, by the looks of these reports, it’s clear that the inflation risk to the economy is lowering. However, this week’s inflation reports will not be enough evidence for the Fed to support cutting key interest rates at their meeting next week. But if there is a silver lining in the recent market chaos, it is that Treasury yields have plunged. So, I am expecting that the upcoming Federal Open Market Committee (FOMC) statement will be dovish and that the “dot plot” will signal two key interest rate cuts.
Now, I am also expecting a global crash in interest rates, led by China and followed by the rest of Asia as well as Europe. The U.S. will be the slowest to cut key interest rates, but since the Fed cannot fight market rates, it will have no choice other than to cut to get in line with market rates.
For that reason, I think we could see up to four rate cuts this year, folks.
The Next Opportunity That Will Turn the Market Around
With the latest inflation reports now behind us, I want you to get ready for a big market rebound, which could come as early as next week.
Now, not only is the second half of March a seasonally stronger period for the market, but I also think NVIDIA’s AI Developer’s Conference next week could be the next catalyst for the market.
As I mentioned, next Thursday, NVIDIA will be hosting an event called “Quantum Day”, or “Q Day,” where industry leaders will come together to talk about the future of quantum computing and what they plan to do with it.
The excitement for this event is already building into a fever pitch. Quantum computing stocks were up 17%, 28% and an eye-popping 46% on Friday!
But this is just the beginning, folks…
See, I predict NVIDIA will make a critical announcement related to its future in the quantum computing space. And it will involve my No. 1 pick in this space.
If you don’t position your portfolio now, by the time this announcement is made, it may already be too late.
That’s why I want to urge investors like you to get in on it early. I explain everything you need to know in my latest presentation, The Next 50X NVIDIA Call.
This presentation won’t be up for long, so you should take the time to watch it now before it’s gone for good.
Click here to check out the replay now.
Sincerely,
Louis Navellier
Editor, Market 360
The Editor hereby discloses that as of the date of this email, the Editor, 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:
NVIDIA Corporation (NVDA)