While the action under the surface was hardly encouraging, in the face of plenty of hawkish headlines from the Fed it was impressive that the S&P 500 gained 1.4%, the Dow rallied 1.44%, and the Nasdaq added 1% last week.

SThe story of the broad market is much the same as it has been in recent weeks. To wit, rotation continues across several industry groups while the major averages remain stuck in a lateral range. Things should start to heat up as we head further into the earnings season, though we’re not advising any major change in stance just yet.

This week’s list includes a nice mix of key industries that are benefiting from major fundamental and economic trends. Our Top Pick is a stock that should get a boost from accelerating interest in online foreign language learning.

It’s possible stocks are stretched, at least in the near term, and the just-underway earnings season will put that to the test in the coming weeks. The next big move may be to the downside, so today we’re adding some more portfolio protection in the form of a mega-cap health insurer that pays a modest dividend but has a history of beating the market. It’s the latest recommendation from Cabot Dividend Investor Chief Analyst Tom Hutchinson.

The goal this week is to add some positive deltas to the portfolio. We took a loss in our DIA bear call spread early last week, which was our first loss since February 2. And while the small setback should be expected (losses will occur) we continue to progress higher as the overall returns remain just under 100%, and remember, this is during what has been one of the more volatile periods in market history, a year when the major indexes were deeply entrenched in negative territory.

The message remains consistent again this week in all five of our open positions: All there is to do at the moment is allow time decay to work its magic.

All five positions are shaping up nicely as we head closer to May 19, 2023 expiration. But with earnings season upon us, as I stated last week, I expect to see several short-term positions (30 to 60 days ‘til expiration) being added to the mix. I’ve been very conservative about adding new positions to the mix and I don’t necessarily think all is clear ahead, but I do think we have an opportunity during this earnings season to add a few selective positions to the portfolio.

As we enter our second week of earnings trades, we are greeted with a plethora of opportunities. My focus this week will be on Morgan Stanley (MS) and American Express (AXP). That being said, there are several other stocks that could garner some attention as well, including Netflix (NFLX) and International Business Machines (IBM). So, given the number of potential opportunities this week, expect to see at least two, if not three, trade alerts as we move throughout the week.

After the recent pullback, the All-Weather portfolio is now up 9.88%, with the Vanguard Total Stock Market ETF (VTI) doing the heavy lifting, up 25.36% since it was introduced to the portfolio back on 6/15/22.

I will be rolling all of our LEAPS positions to the 2025 expiration cycle this week. So, be prepared to make a few trades this week as we increase the duration of our LEAPS while simultaneously continuing to sell more call premium.

While the action under the surface was hardly encouraging, in the face of plenty of hawkish headlines from the Fed it was impressive that the S&P 500 gained 1.4%, the Dow rallied 1.44%, and the Nasdaq added 1% last week.

While the action under the surface was hardly encouraging, in the face of plenty of hawkish headlines from the Fed it was impressive that the S&P 500 gained 1.4%, the Dow rallied 1.44%, and the Nasdaq added 1% last week.

The broad markets have improved nicely in the past month, albeit with a recent pullback. Leading sectors were Communication Services, Consumer Staples, Healthcare, Technology, and Utilities. Style-wise, large-cap growth stocks beat their value peers, gaining 3.64% for the month.

The employment picture remains healthy, with 236,000 jobs added in March, taking the unemployment rate down to 3.5%. This was the slowest job growth in two years, so economists are hoping that will slow inflation—and the Fed’s rate hikes!

So far, this has been a positive year for the market. But an enormous amount of uncertainty remains.

The painful high inflation/hawkish Fed conundrum that caused last year’s bear market appears to be ending. But a high risk of recession is taking over. It will be difficult for stocks to rally into the next bull market without knowing the timing, severity, or duration of a possible recession.

Inflation could remain sticky. A recession could hit in any of the next three quarters. A recovery may be lame when it finally arrives because the Fed may have to keep interest rates high. We don’t know if six months from now we will face more inflation, a recession or even stagflation.

Today, I’m recommending a failed biotech that is undergoing a strategic review.

Key points:
· Based on conservative assumptions, I see 30% to 92% upside within 12 months.
· Low downside risk given stock market cap is 51% of net cash.
· High insider / institutional ownership assures incentives are aligned.

All the details are inside this month’s Issue. Enjoy!

Greentech is in the midst of its best run, on a weekly basis, since the huge bull advance from spring 2020 into the start of 2021. By our Greentech Timer’s definition, it’s a bull market now. Our benchmark index, the Wilderhill Clean Energy Index, is trading over its 20-day and 40-day moving averages, both of which are trending higher, a condition that started Monday. We’re also seeing the most consistently strong buying volume in Greentech in 13 months. Breadth is excellent. Over the past week, 92% of Greentech stocks are higher – 267 out of the 291 we track – and over the past month 83% are higher. It’s quite a swing in sentiment: over the past three months only 37% of Greentech stocks are higher, even after the past four weeks of excellent performance.

One common belief shared by Cathy Wood and the Cabot Undervalued Stocks Advisor. We comment on the impressive recovery of one of our recommendations as they reported strong fourth-quarter earnings, as well as updates on other recommended stocks.

With this update, I’m giving you trades for rebalancing the Aggressive portfolio (100% equity) and the Moderate portfolio (60% equity/40% fixed income).

Any time the broad market declines 10% or more, into correction territory, it’s wise to evaluate your holdings and be sure nothing has strayed too far out of line from your predetermined allocation.

Our recent ratings change from Buy to Sell for an energy company, earnings updates and other comments on our recommended companies, and some thoughts on the amazingly complex macro environment.

The market put on a good show for the third day in a row – at the close, the Dow was up 418 points and the Nasdaq was up 178 points.

While the Russia-Ukraine conflict continues to add a huge amount of uncertainty in global markets we now have a little more clarity on the interest rate environment here in the U.S. after the Fed hiked rates by a quarter point yesterday.

It’s Fed decision day. The Central Bank is going to raise rates. And the market loves it.

All three market indexes are up big for the second day in a row. Despite the fact that the Fed will today announce the first rate hike since 2018, it’s expected and the market isn’t worried. As a matter of fact, investors sense we will navigate this minefield with no additional cause for concern.

It’s that time of the month. I mean when all eyes are on the Fed, of course. But this time investors have one eye on the Fed and the other eye on Russia.

At the same time, a new narrative is emerging: slowing economic growth. The last several trading days are reflecting investor angst that inflation, the Russian war, and a tightening Fed will slow growth both domestically and internationally. That’s new.

We relate a quote from the movie “Anchorman” to the financial markets and provide updates on our recommended companies.

The three “strategic” portfolios, allocated according to aggressive, moderate, and conservative risk tolerances, trade less frequently, and are designed to help investors meet specific goals.

AppLovin (APP) reported Q3 2021 results that surpassed expectations on the top line and missed on the bottom line. Maravai (MRVI) reported Q3 results yesterday that surpassed expectations.

This closed-end fund’s largest holders are: Parametric Portfolio Associates (11.86% of assets); SIT Investment Associates Inc (5.14%); and Saba Capital Management, L.P.(4.55%)

Kornit Digital (KRNT) reported Q3 results that missed on the top line and matched consensus on the bottom line. Net of the $7.9 million impact from warrants, revenue was up 51% to $86.7 million ($89.2 million expected) while adjusted EPS of $0.27 was in line.

The market is getting walloped today after a huge inflation report led to a horrible bond auction that kicked interest rates higher. As of 2 pm, the Dow is off 163 points, but the Nasdaq is down 200 points and many hot growth titles are pulling in hard.

Upstart (UPST) reported Q3 results yesterday, and the stock is taking it on the chin this morning despite strong results.

After a nine-month-long and very deep correction, during which the Global Cannabis Index fell 54% and many stocks fell farther, there was strong buying in the sector on Friday and Monday, signaling that the correction in the sector is likely over.

The shares of this financial business have recently been upgraded by Seaport Global to ‘Buy.’

This digital media company expanded its geographical reach with the acquisition of 365 Digital, a digital advertising solutions company headquartered in South Africa. The company’s EPS for its latest quarter beat analysts’ estimates by $0.05 and revenues by revenues 0.21%.

Sell Freshpet (FRPT). Freshpet (FRPT) reported yesterday afternoon and the stock has been under pressure today.

This aerospace company beat earnings estimates by $0.20 last quarter. The shares have a current annual dividend yield of 2.24%, paid quarterly.

This afternoon we are moving shares of Signet Jewelers (SIG) from BUY to SELL.

After going through our portfolio this past weekend, I’ve decided to make a couple of quick changes. Part of my thinking with these two sells is that we have a new crop of ideas coming in next week’s issue and we can carve out some spots (and free up capital) for fresh ideas, while taking a little risk off the table while the market is strong.

Our Cabot Top Ten 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 Top Ten features.