Issues
The market has been terrific. But uncertainty is growing, particularly with regard to the economy and artificial intelligence.
The government shutdown is over. Tariffs are increasingly less of an issue in the market. But the economy is about to take center stage. There haven’t been the usual economic reports during the shutdown and there is a risk that when they do finally come out the market could be startled.
At the same time, there has been a tug-o-war regarding the AI trade, and Wall Street doesn’t know what to think. AI has driven the market higher for most of the last three years. The future direction of AI and technology will determine the future direction of the overall market.
Fortunately, there are trends and stocks that are not overly dependent on the unpredictable technology sector or the state of the economy. Electricity demand is soaring because of artificial intelligence data centers, electric vehicles, and manufacturing onshoring. The best health care companies will thrive with the enormous tailwind of the aging population megatrend.
Electricity demand will boom, and people will get sick and need medicine regardless of the near-term gyrations of the economy or the market. In uncertain times like this, I like to go with bankable trends.
In this issue, I highlight two of the very best stocks to buy in the areas of utilities and health care.
The government shutdown is over. Tariffs are increasingly less of an issue in the market. But the economy is about to take center stage. There haven’t been the usual economic reports during the shutdown and there is a risk that when they do finally come out the market could be startled.
At the same time, there has been a tug-o-war regarding the AI trade, and Wall Street doesn’t know what to think. AI has driven the market higher for most of the last three years. The future direction of AI and technology will determine the future direction of the overall market.
Fortunately, there are trends and stocks that are not overly dependent on the unpredictable technology sector or the state of the economy. Electricity demand is soaring because of artificial intelligence data centers, electric vehicles, and manufacturing onshoring. The best health care companies will thrive with the enormous tailwind of the aging population megatrend.
Electricity demand will boom, and people will get sick and need medicine regardless of the near-term gyrations of the economy or the market. In uncertain times like this, I like to go with bankable trends.
In this issue, I highlight two of the very best stocks to buy in the areas of utilities and health care.
Despite a promising start, last week turned into a rough one for the market. A mix of rising economic uncertainty and heavy tech-valuation concerns weighed on sentiment, driving the market to a risk-off environment. By week’s end the S&P 500 had fallen 1.6%, the Dow Jones had slid 1.2%, and the Nasdaq Composite had dropped 3%.
On balance, there’s little doubt the evidence worsened last week, and yet, most leaders didn’t crack, and the big-cap indexes didn’t either, so the question was whether a “real” correction was getting underway … or this would be yet another shakeout-type decline that gives way to higher prices. So far, of course, it’s looking like the latter. On Friday’s update, we dropped our Market Monitor to a level 6, but we’re going to quickly change course and go back to 7 today—and then stay flexible as we see whether a year-end run is getting underway or whether more volatility is coming.
This week’s list again has a growth tilt to it, which we find encouraging given the selling we saw in many areas of the market of late. Our Top Pick is a steadier leader in the AI (and solar) space and is testing its 10-week line for the first time—look to enter on strength and use a tight-ish percentage stop.
This week’s list again has a growth tilt to it, which we find encouraging given the selling we saw in many areas of the market of late. Our Top Pick is a steadier leader in the AI (and solar) space and is testing its 10-week line for the first time—look to enter on strength and use a tight-ish percentage stop.
The market took a few lumps last week but is recovering nicely today. We’ll see which direction it goes from here now that third-quarter earnings season is winding down. Yet again, earnings did more help than harm, providing a floor for stocks to help counteract some of the unfavorable headwinds (high valuations, record-long government shutdown, accelerating job cuts by major corporations) threatening to derail them. Today, we add one of the bigger earnings season winners, a mid-cap biotech that has been beaten up for a couple years but is staging a comeback that got a welcome boost from its late-October report. It’s a stock that got Mike Cintolo’s attention in Cabot Top Ten Trader.
Details inside.
Details inside.
Despite a promising start, last week turned into a rough one for the market. A mix of rising economic uncertainty and heavy tech-valuation concerns weighed on sentiment, driving the market to a risk-off environment. By week’s end the S&P 500 had fallen 1.6%, the Dow Jones had slid 1.2%, and the Nasdaq Composite had dropped 3%.
Despite a promising start, last week turned into a rough one for the market. A mix of rising economic uncertainty and heavy tech-valuation concerns weighed on sentiment, driving the market to a risk-off environment. By week’s end the S&P 500 had fallen 1.6%, the Dow Jones had slid 1.2%, and the Nasdaq Composite had dropped 3%.
Nuclear energy is a $2 trillion industry waiting to explode. And while some of the bigger-name providers of it have seen their share prices rise manyfold over the last year, other companies that provide nuclear power have remained under the radar – and undervalued.
That includes this month’s new addition. It’s a California utility company that’s one of the largest electricity providers in the country – and it has a nuclear plant that’s starting to get into the (you guessed it) artificial intelligence game.
Details inside.
That includes this month’s new addition. It’s a California utility company that’s one of the largest electricity providers in the country – and it has a nuclear plant that’s starting to get into the (you guessed it) artificial intelligence game.
Details inside.
Today we’re taking a half-sized position in an emerging MedTech company disrupting the insulin market. It has developed a fully automated device that removes many of the headaches associated with insulin pumps, which have kept adoption of those systems in check.
It’s a rapid-growth company with one product already approved by the FDA, and more solutions in the pipeline.
All the details are inside the November Issue of Cabot Small-Cap Confidential.
It’s a rapid-growth company with one product already approved by the FDA, and more solutions in the pipeline.
All the details are inside the November Issue of Cabot Small-Cap Confidential.
The market’s momentum continued last week as a benign inflation print and another round of solid earnings backed up bullish sentiment—with virtually all of the major indexes moving higher. For the week the S&P 500 rose 0.7%, the Dow Jones Industrial Average advanced 0.8%, the Nasdaq Composite jumped 2.2%, but the Russell 2000 slipped 1.4%.
The big-cap indexes have been leading for a while now, but more recently, we’ve seen an even greater dichotomy out there, with the broad market actually coming under pressure and with most (non-big-cap) indexes testing or breaking intermediate-term support. On the flip side, the number of growth-y stocks in good shape has actually increased. As we wrote last Friday, these sorts of divergences tell us the risk of some unpleasantness has increased, though that doesn’t guarantee it will happen and, if it does, when. Thus, it’s best to go with the flow right here—aiming to buy strong, fresh leaders at decent entry points, but also being willing to book partial profits on the way up and raise stops when needed. We’ll again leave our Market Monitor at a level 7.
This week’s list has a major growth tilt, which goes along with the emergence of many growth stocks from multi-week (or, sometimes, multi-month) consolidations. Our Top Pick is getting going from a two-and-a-half-month rest following another great quarterly report.
This week’s list has a major growth tilt, which goes along with the emergence of many growth stocks from multi-week (or, sometimes, multi-month) consolidations. Our Top Pick is getting going from a two-and-a-half-month rest following another great quarterly report.
The major indexes continue to hover near all-time highs, even as more issues beneath the surface crop up. Another strong earnings season, dwindling U.S.-China trade tensions, and another interest rate cut are helping prop stocks up, even as volatility begins to creep higher again. So today, to account for a possible pullback, we opt for a stock that’s a household name but one that has become so undervalued that Clif Droke just added it to his Cabot Turnaround Letter portfolio.
Details inside.
Details inside.
The market’s momentum continued last week as a benign inflation print and another round of solid earnings backed up bullish sentiment—with virtually all of the major indexes moving higher. For the week the S&P 500 rose 0.7%, the Dow Jones Industrial Average advanced 0.8%, the Nasdaq Composite jumped 2.2%, but the Russell 2000 slipped 1.4%.
Updates
The S&P 500 reached a new all-time high. Now what?
It’s been a tremendous recovery since the “tariff Armageddon” days of early April. Stocks went from the precipice of a bear market to a brand new high in just a couple of months.
It’s been a tremendous recovery since the “tariff Armageddon” days of early April. Stocks went from the precipice of a bear market to a brand new high in just a couple of months.
NOTE: A couple of things. First, we’re sending this update a day early, as the Friday holiday is pushing up our publishing schedule by a day. And second, I’m actually out of town on vacation, so while we’re sending this update this morning, we’ll follow up with a bulletin tomorrow morning if need be. If we’re not in touch, have a great holiday weekend!
WHAT TO DO NOW: Remain bullish but take things on a stock-by-stock basis. The overall market is in fine shape, but Tuesday saw a lot of selling in growth stocks as investors rotated into stodgy areas (Dow Industrials and defensive stocks). For now, the action is broadly acceptable, but the next few days will be key. Today, we are making some small changes: We’ll place Axon (AXON) and Rubrik (RBRK) on Hold and we’re going to sell one-third of our remaining position of Palantir (PLTR), leaving us with around 23% in cash.
WHAT TO DO NOW: Remain bullish but take things on a stock-by-stock basis. The overall market is in fine shape, but Tuesday saw a lot of selling in growth stocks as investors rotated into stodgy areas (Dow Industrials and defensive stocks). For now, the action is broadly acceptable, but the next few days will be key. Today, we are making some small changes: We’ll place Axon (AXON) and Rubrik (RBRK) on Hold and we’re going to sell one-third of our remaining position of Palantir (PLTR), leaving us with around 23% in cash.
The S&P 500 reached a new all-time high last week. And the market is moving higher to start this week.
The market is being propelled higher by technology as the artificial intelligence trade turned hot again. Technology had been dragging the market lower all year until recently after leading it higher for most of the bull market. The sector sold off after the DeepSeek news in late January and then took a further hit with the tariff panic in April.
The market is being propelled higher by technology as the artificial intelligence trade turned hot again. Technology had been dragging the market lower all year until recently after leading it higher for most of the bull market. The sector sold off after the DeepSeek news in late January and then took a further hit with the tariff panic in April.
In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Agnico Eagle Mines (AEM), Alcoa (AA), Centuri Holdings (CTRI), GE Aerospace (GE), Paramount Global (PARA) and SLB Ltd. (SLB).
Agnico Eagle (AEM) CEO explains why his company is one of the industry’s top performers.
Agnico Eagle (AEM) CEO explains why his company is one of the industry’s top performers.
It was a quiet week for Explorer stocks as mega tech momentum stocks have led a sharp rebound from the lows of April’s tariff-driven market pullback. This has led the broader markets to close near all-time highs.
But this is nothing compared with Spain’s IBEX 35 index, which is up almost 40% year-to-date, crushing the Nasdaq’s anemic 4% gain. Spain is now Europe’s fastest-growing major economy with electricity prices helping manufacturing and logistics. Spain brought in 94 million visitors last year and I was one of them. In 2024 alone, 170,000 people migrated from Latin America to Spain, further propelling growth and productivity.
But this is nothing compared with Spain’s IBEX 35 index, which is up almost 40% year-to-date, crushing the Nasdaq’s anemic 4% gain. Spain is now Europe’s fastest-growing major economy with electricity prices helping manufacturing and logistics. Spain brought in 94 million visitors last year and I was one of them. In 2024 alone, 170,000 people migrated from Latin America to Spain, further propelling growth and productivity.
The S&P 600 Small Cap Index rose modestly this week but not quite to the 1,340 level the index reached on June 11.
We’re seeing what could be an early pattern of higher highs and higher lows for the index, though for that trend to firm up we need to see the index get closer to its 200-day line (currently at 1,367) in the next week or two, and not fall below 1,284.
We’re seeing what could be an early pattern of higher highs and higher lows for the index, though for that trend to firm up we need to see the index get closer to its 200-day line (currently at 1,367) in the next week or two, and not fall below 1,284.
Three years ago this month, I went to see my first movie in a theater since Covid. The film was Top Gun: Maverick, a movie that tapped into my 1980s nostalgia and was more entertaining and coherent than your average sequel. I wasn’t alone – the film grossed nearly $1.5 billion worldwide, making it the highest-grossing movie of Tom Cruise’s career, which is really saying something. Steven Spielberg thanked Cruise for “saving movie theaters.” He may have been right: In the two previous Covid-tainted years, 2020 and 2021, U.S. movie theaters grossed just over $6.5 billion combined – barely more than half of the industry’s 2018 peak of $11.89 billion.
Stocks have been impressively resilient. The market handled the Iran news like a trooper. Stocks have rallied since the U.S. bombing.
It seems like the default position of investors is optimism. Stocks seem to want to go higher and only go lower when they defy gravity. The market made up the tariff panic in short order. Rates have remained stubbornly high. The news from the Middle East is wild. Yet stocks are within bad-breath distance of the all-time high.
It seems like the default position of investors is optimism. Stocks seem to want to go higher and only go lower when they defy gravity. The market made up the tariff panic in short order. Rates have remained stubbornly high. The news from the Middle East is wild. Yet stocks are within bad-breath distance of the all-time high.
In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Alcoa (AA), Centuri Holdings (CTRI), Intel (INTC), Kenvue (KVUE), Paramount Global (PARA) and SLB Ltd. (SLB).
Alcoa (AA) is navigating tariff-related challenges relating to aluminum pricing and sourcing.
SLB Ltd. (SLB) is well positioned to benefit from anticipated oil and natural gas price increases arising from the Iran/Israel conflict.
Alcoa (AA) is navigating tariff-related challenges relating to aluminum pricing and sourcing.
SLB Ltd. (SLB) is well positioned to benefit from anticipated oil and natural gas price increases arising from the Iran/Israel conflict.
NOTE: We’re publishing this update a day early as our offices (along with the overall market) will be closed tomorrow for Juneteenth.
WHAT TO DO NOW: Continue to lean bullish but stand pat for now. Overall, the market is handling the Middle East uncertainties well, with the major indexes and most stocks holding up well and most of the intermediate-term evidence in good shape. Still, with most stocks and indexes in holding patterns, we’ll follow along tonight—holding our 28% cash position and our current positions as we wait to see if more stocks can eventually lift out of their recent tight ranges.
WHAT TO DO NOW: Continue to lean bullish but stand pat for now. Overall, the market is handling the Middle East uncertainties well, with the major indexes and most stocks holding up well and most of the intermediate-term evidence in good shape. Still, with most stocks and indexes in holding patterns, we’ll follow along tonight—holding our 28% cash position and our current positions as we wait to see if more stocks can eventually lift out of their recent tight ranges.
Tuesday’s edition of The New York Times had a stock-centric article titled, “The S&P is Nearing a Record. Really.” The subtext, of course, is that stocks have climbed near February all-time highs despite a bevy of geopolitical tensions, potential economic landmines, and widespread investor and consumer pessimism. As I wrote last week, the market has fully recovered from its tariff-fueled cratering of late March and early April, but lingering uncertainties threaten to derail it at any moment … and that was before Israel and Iran started bombing each other.
There really isn’t a lot to complain about. But I’ll try.
The S&P 500 spiked about 25% from the low of early April. The index is now up around 2% YTD, up 1.5% in June, and is just 2% from the all-time high. That’s great in terms of coming off the precipice of a bear market. But a 2% YTD return halfway through June isn’t exactly lighting it on fire.
The S&P 500 spiked about 25% from the low of early April. The index is now up around 2% YTD, up 1.5% in June, and is just 2% from the all-time high. That’s great in terms of coming off the precipice of a bear market. But a 2% YTD return halfway through June isn’t exactly lighting it on fire.
Alerts
WHAT TO DO NOW: Happily, the year is off to a generally good start, but the situation remains tricky, with the market’s intermediate-term trends neutral-to-negative and with the early January effect (tons of volatility among individual stocks) being seen in many names. Today’s bulletin is regarding Axon Enterprises (AXON), which has been a solid winner for us but has been losing ground for a few weeks and today is cracking support on big volume. We’ll sell our remaining shares, taking the rest of our profit off the table. Details below.
I hope you’ve had a wonderful holiday season and are looking forward to a healthy and profitable 2025. I know I am.
Shares of Perpetua Resources (PPTA) closed down 13% yesterday, likely on speculation that there will be a delay in the final Record of Decision (ROD) for the Stibnite Project.
Today, a whopping eight Profit Booster positions will expire. Most are “slam-dunk,” full-profit trades, while others will go down to the wire.
The big takeaway, before we dive in, is we are going to let the situation play itself out, and come Monday/Tuesday of next week we will revisit our profits, as well as how we will manage the remaining positions.
The big takeaway, before we dive in, is we are going to let the situation play itself out, and come Monday/Tuesday of next week we will revisit our profits, as well as how we will manage the remaining positions.
Shares of Mama’s Creations (MAMA) are trading down this morning in what “should” be a short-term retreat following a solid Q3 report. The takeaway from the report is that Mama’s has made considerable progress building the foundation for faster, higher-margin growth and is past construction and commodity-related disruptions that impacted Q3 results.
Portfolios
An updated portfolio for Cabot Options Institute – Quant Trader.
An updated portfolio for Cabot Options Institute – Fundamentals Portfolio.
An updated portfolio for Cabot Options Institute – Fundamentals Portfolio.
An updated portfolio for Cabot Options Institute – Quant Trader.
An updated portfolio for Cabot Options Institute – Earnings Trader.
An updated portfolio for Cabot Options Institute – Fundamentals Portfolio.
An updated portfolio for Cabot Options Institute – Earnings Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Quant Trader.
An updated portfolio for Cabot Options Institute – Earnings Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Quant Trader.
Strategy
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 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.