The market remains in flats-ville, with the major indexes having made no net progress for two to four months while growth stocks are hit and miss. Right now, we’re focused mostly on preserving capital and not chasing our tails on every wiggle the market throws at us--but we also have a few lines in the water and are ready for a new buying spree if and when big investors turn bullish. This week, we sold one half-sized position and are holding around half in cash, though we’re also have a few resilient names that we’re giving some rope.

Water is boring. Wastewater and storm drainage systems are even more of a yawn-inducer. And yet, they have never been more essential, scarce … and in need of repair. That’s big business for the companies that provide the parts and repairs necessary to upgrade America’s outdated water infrastructure – $630 billion in upgrades to U.S. water systems are required over the next couple decades.

So, this month, we add a “boring” maker of the valves, pipes, fire hydrants, gauges, etc., that will help rebuild a water infrastructure system that is, in many places, more than half a century old. The profit potential is not boring, however: This company is trading at record-low valuations despite achieving record-high sales and earnings. That makes it the perfect growth-at-value-prices candidate, and ripe for our Buy Low Opportunities portfolio.

Details inside.

Artificial intelligence can now generate convincing voices, documents and digital identities in seconds. That makes it easier than ever for fraudsters to impersonate real people – and harder for businesses to know who is on the other side of a transaction.

This month’s small-cap stock pick helps solve that problem.

All the details are inside the September Issue of Cabot Small-Cap Confidential.

Headlines last week were mixed as blockbuster Nvidia earnings midweek sparked a rally, followed by Fed Chair Kevin Warsh’s hawkish tone at the Jackson Hole symposium reigniting rate hike chatter into Friday’s close. Furthermore, renewed U.S.-Canada trade tensions and a still-sticky inflation reading added to the crosscurrents, though large caps mostly shrugged it off while small caps bore the brunt of the late-week caution. For the week, the S&P 500 gained 0.5%, the Dow added 0.5%, the Nasdaq rose 0.8%, while the Russell 2000 lagged with a decline of 1.5%.

First off, a heads up: Next Monday is one of our scheduled weeks off due to the Labor Day holiday (the market will be closed next Monday). We will have the regular Movers & Shakers update this Friday, as well as a brief update next Tuesday in lieu of the issue. Have a great long weekend!

As for the market, the environment remains mostly tedious as we leave the summer behind. Big picture, the odds continue to favor the next major move being up … but as has been the case for a while now, the question is whether that advance kicks into gear soon or whether the market has some more shenanigans to throw at investors first. We’ll again leave our Market Monitor at a level 7, but we’d like to see constructive action in the days ahead.

This week’s list is a hodgepodge of ideas, including a few that have turned up after huge, multi-year weak patches. Our Top Pick is a name that was left for dead by the market, but business has remained resilient and AI is actually helping growth to accelerate.

The dog days of summer are winding down, and a productive but front-loaded August for the market should soon give way to the usual post-Labor Day fireworks starting next week. Meanwhile, with growth stocks continuing to trade below their late-June peak, value stocks have picked up the slack, outperforming both the S&P 500 and the Nasdaq this year. So today, we add a high-profile value stock that Clif Droke just added to his Cabot Turnaround Letter portfolio. It’s a familiar name and a turnaround play – and one that has been slowly building momentum the last couple months.

Details inside.

Headlines last week were mixed as blockbuster Nvidia earnings midweek sparked a rally, followed by Fed Chair Kevin Warsh’s hawkish tone at the Jackson Hole symposium reigniting rate hike chatter into Friday’s close. Furthermore, renewed U.S.-Canada trade tensions and a still-sticky inflation reading added to the crosscurrents, though large caps mostly shrugged it off while small caps bore the brunt of the late-week caution. For the week, the S&P 500 gained 0.5%, the Dow added 0.5%, the Nasdaq rose 0.8%, while the Russell 2000 lagged with a decline of 1.5%.

Headlines last week were mixed as blockbuster Nvidia earnings midweek sparked a rally, followed by Fed Chair Kevin Warsh’s hawkish tone at the Jackson Hole symposium reigniting rate hike chatter into Friday’s close. Furthermore, renewed U.S.-Canada trade tensions and a still-sticky inflation reading added to the crosscurrents, though large caps mostly shrugged it off while small caps bore the brunt of the late-week caution. For the week, the S&P 500 gained 0.5%, the Dow added 0.5%, the Nasdaq rose 0.8%, while the Russell 2000 lagged with a decline of 1.5%.

Headlines last week were mixed as blockbuster Nvidia earnings midweek sparked a rally, followed by Fed Chair Kevin Warsh’s hawkish tone at the Jackson Hole symposium reigniting rate hike chatter into Friday’s close. Furthermore, renewed U.S.-Canada trade tensions and a still-sticky inflation reading added to the crosscurrents, though large caps mostly shrugged it off while small caps bore the brunt of the late-week caution. For the week, the S&P 500 gained 0.5%, the Dow added 0.5%, the Nasdaq rose 0.8%, while the Russell 2000 lagged with a decline of 1.5%.

“The long-term Treasury yield is the most important price in the world. It is also the only fiscal disciplinarian the U.S. has left.” -Stan Druckenmiller

“In terms of equity, AI will either be the greatest equalizer ever invented, or the worst source of injustice.” -Bill Gates

Our Cabot Insider Edge portfolio is up 17.35% compared to 4.56% for the S&P 500 exchange-traded fund (SPY) since inception on June 10, 2026, despite the headwind of a cash position.

This is positive performance, but I’m resisting exuberance. I remain somewhat cautious on the markets, which appear to be vulnerable to a pullback for the reasons I have been stating.

Mattel (MAT) is a name that needs no introduction; indeed, most of us probably owned one or more of their products at some point in our childhood. Even today, it ranks as one of the largest and most prominent toy and entertainment franchises in the entire world.

While the company continues to manufacture and sell physical toys—including perennially popular Barbie dolls and Hot Wheels cars, Fisher-Price toys and Thomas & Friends merchandise—it’s currently in the midst of a potentially massive transition: Mattel will continue to make toys, but it’s undertaking a critical transformation into becoming more of an intellectual property (IP) and media franchise operator.

Dollar weakness remains a present reality for shoppers today, as evidenced by prices at the grocery store. This, in turn, provides a springboard for a broader discussion of the conundrum confronting U.S. monetary and fiscal policymakers: How to maintain financial conditions that help contain the government’s ever-growing debt burden without allowing the dollar to weaken so dramatically that foreign investors become less willing to provide the capital needed to finance that debt and support Treasury bond prices.

The escalation of the Mideast conflict sent oil prices and interest rates back on an upward trajectory, causing headwinds for stocks this week. Japan’s 10-year bond breached 3% for the first time since 1996 and the 30-year U.K. bond yield hit its highest level since 1998. The 10-year U.S. Treasury yield climbed closer to 4.8%.

It’s the last week of the summer. There’s lots going on but no one around to react. That will change next week when the rubber hits the road after Labor Day.

The market has been good. Indexes are close to the highs, and the S&P is up over 12% YTD. But there are some issues emerging that may cause a problem in the coming weeks. The culprits are oil prices and interest rates.

This should be an uneventful week in the market. It’s not that there isn’t plenty going on. There is. It’s just that nobody is around to worry about it.

It’s the last week of the unofficial Memorial Day to Labor Day summer. Investors are far more concerned about squeezing in the last bit of summer than whatever the market is doing. It’s like the week between Christmas and New Year’s. But that will change in a big way next week.

The normally stoic bond market has been dominating financial news headlines of late following the U.S. government’s latest intervention—a move with implications for the increasingly tenuous private credit and the housing markets, as well as for turnaround investors.



The Treasury Department last week announced an expanded bond buyback program with the goal of lowering long-term borrowing costs. The move came as a result of the market’s persistent worries over rising federal debt, persistent inflation and overall bond market deterioration, as the yields on the 10-year and 30-year Treasuries have been steadily trending higher this year.

WHAT TO DO NOW: Today was certainly a step in the right direction, but our overall thoughts on the market from last week are unchanged—most indexes, growth funds and growth stocks are still grinding sideways, so we’re willing to patiently wait for that to change. If it does, we have many names we’d like to add, but in the meantime we’re content to hold our cash. Earlier this week, we placed Cloudflare (NET) and Palo Alto Networks (PANW) on Hold; we’ll leave them there today, though today’s upmoves were encouraging.

Two months ago to the day, a pair of holdings in our Growth & Income Portfolio – Dick’s Sporting Goods (DKS) and Harmony Gold Mining Co. (HMY) – were headed in opposite directions.

Dick’s, the sports apparel retailer with locations all across America, was riding high, finishing the day at 239 a share on August 26 – seemingly closing in on our 250 price target.

Harmony Gold, on the other hand, couldn’t get going, with shares trading in the 15s, down from highs above 26 in January as gold and metals prices had plummeted since the onset of the Iran war.

Fast forward to this week, and it’s a very different story.

What happened to the summer? It’s the last days of August already!

I can’t believe it’s already time to talk about the post-Labor Day market. But that’s where we are. Most investors stop paying attention and focus on squeezing in the last bit of summer before it’s gone. Markets usually don’t do much. But that changes after Labor Day.

With the peak of the latest earnings season over and quarterly reports winding down, it’s clear that the season was bullish for most companies. However, the “disconnect” between the market’s expectations and reality was so extreme at times that it produced some massive swings in both directions.

The Q2 season saw 85% of S&P 500 companies that reported results beat estimates versus a long-term average of 76%, along with earnings surprises of 31% versus a long-term trend of 5.2%, according to Barclays.

After another furious, AI-led run-up sent all three major indexes to new record highs to start the month, stocks have sagged in the back half of August, at least so far. There is no shortage of reasons why.

For starters, second-quarter earnings season is largely in the rear-view mirror, save for a few key reports (namely Nvidia (NVDA) next week), meaning the market no longer has the flotation device of 50%-plus earnings growth (!), which was the average among the 88% of large-cap companies that have already reported. That’s the highest year-over-year earnings growth since the Covid-skewed second quarter of 2021 – and is largely unprecedented when the U.S. economy is not emerging from a recession. Absent all those jaw-dropping earnings results, there is no obvious catalyst to send stocks higher right now.

It has been a mildly choppy week for the market, with the major indexes not moving all that much. From last Wednesday’s close through yesterday’s close, the S&P 500 and S&P 600 were both down about 1%, while the Nasdaq slipped 2%.

Under the surface, however, there has been a meaningful rotation. Momentum stocks lagged, several recent winners gave back ground, and money moved into areas like biotech and precious metals.

U.S. Treasury intervention in bond markets eased yields, boosting stocks, gold, and even Bitcoin yesterday. Nevertheless, stubborn inflation, high oil prices, geopolitical uncertainty and surging demand for capital from both companies and governments are all clear trends. This is leading to higher bond yields and a bit of a headwind for stock markets as the U.S. Federal debt is expected to reach $40 trillion this week.

Mama’s Creations (MAMA) Delivers

WHAT TO DO NOW: We remain positioned relatively close to shore, holding a good amount of cash but keeping a few lines in the water as the market environment stays challenging. Today’s bulletin concerns Palo Alto Networks (PANW), which got caught up in the sell-on-strength pattern in recent days and, today, is gapping below its 50-day line on earnings. We’ll cut bait on our half-sized position and hold the cash.

Sell Envela (ELA)

Here is a new stock which I am adding to our model portfolio at current prices.

A torrid August for gold and metals has pushed shares of Harmony Gold (HMY) above our 23 price target! This morning’s 6% surge in HMY shares – likely on gold prices pushing past $4,600 an ounce for the first time since May – has pushed the gold and copper stock to the mid-23s. With the stock now trading at 2.7x sales and more than 4x book value – and with the August 27 earnings report potentially doing more harm than good, since it’s very possible a better-than-expected quarter is already priced in – it’s time to “Retire” HMY from our Growth & Income Portfolio.

WHAT TO DO NOW: The market remains mostly stuck in the mud, with most major indexes not making any net progress for 12-plus weeks. And growth stocks are mixed at best, as our Aggression Index continues to languish. We’re not making any new buys or sells, but given the lackluster action, we’re going to place two names—Palo Alto (PANW) and Cloudflare (NET)--on Hold and use reasonable stops from here in case the lackluster action continues.

A few Cabot Options Trader subscribers have asked me about ways to protect gains in their portfolios, so I thought I would write to everyone with a couple of strategies using options to hedge your portfolio.

A subscriber recently asked me if I keep a journal of my trades. Many traders keep journals so they can look back at their trades and evaluate what they did right and what they did wrong.

Want to know how the big institutional investors use options? Here is an example of how one trader spent $132 million on three technology stocks.

Options trading has its own vernacular. To know how to do it, you need to know what every options term means. Here are some of the basics.

Our Cabot Momentum Trader’s market timing system consists of two parts—one based on the action of three select, growth-oriented market indexes, and the other based on the action of the fast-moving stocks Cabot Momentum Trader features.