Navellier Growth: your source for market-beating growth stocks

 

Commodities got stuck between a rock and a hard place on Monday, and commodity-related stocks ran into another crunch. Oil's $6 retreat in the past two days has led to concerns that a weakened U.S. economy will erode demand for crude products.

Well, I'm going to stick to my guns and say that this is not a reflection of an oil "bubble" ready to burst. Rest assured, the current commodities crunch won't wipe out all of our profits. These stocks will bounce back, especially since these companies are where the strongest earnings are–and earnings are everything.

Take fertilizer-giant Potash (POT), for example, on my Blue Chip Growth Buy List. The company recently reported that its sales doubled and earnings rose 220.5%–that's a 12% earnings surprise! Thanks to POT's terrific numbers, we've seen this stock–and our other agricultural picks–find solid ground. The company raised its full-year guidance because demand for agricultural products will continue over the long-term. I fully expect companies like Potash to fuel our success for the rest of the year.

I know it's unnerving to watch your energy and commodity stocks pull back, but I'm confident the bottom will not fall out. As long as PortfolioGrader Pro, my FREE stock ranking tool, continues to rate these stocks as fundamentally superior, they will remain an integral part of my Buy List.

Remember: Hurricane season is in full swing, which could potentially affect oil production–particularly in the Gulf Coast region–in the near future. Furthermore, stagflation fears–stagnant economic growth coupled with rising inflation–persist, which is why high commodity prices are unlikely to drop too much further in this climate.

What to Expect from the Fed's Meeting

As I've already said, inflation is a huge global problem right now and will be the front and center issue at the Fed's meeting later today.

Futures markets indicate there's less than a 30% chance the Fed will tamper with key interest rates. I agree because market interest rates are still significantly below the Fed's 2% target, and the credit market is still in shambles. The Fed has little wiggle room right now, and I expect today's meeting is important more for what the Fed says than does.

Last week's economic data unnerved investors. If the Fed's economic outlook is pessimistic, we can expect this week to be another rollercoaster of a ride.

Whatever the outcome of the Fed's meeting, however, I want you to know that I'm confident we have our money in the right place. My Blue Chip Growth energy and agriculture picks–thanks to fantastic earnings and solid fundamentals–will stay strong in the second half of 2008. It's not too late to get in on this game– sign up for Blue Chip Growth today and ride out 2008 profitably!