As growth investors, we continue to advise a cautious but flexible stance, as our neutral-to-negative growth-focused indicators and the weak action among many leading stocks has us holding lots of cash. That said, we’re really not that negative--most big-picture evidence is still positive, and our watch list is still full of stocks holding in normally while the market finds its way. We have no changes tonight, but are ready to pounce when our indicators give the go-ahead.

Before we dive into this week’s covered call idea we need to clean up a couple positions from the July expiration cycle. First off, FROG, BROS and SN expired for their full profits. However, SEDG and FLEX did not, leaving us with our stock positions which we will exit today.

To execute these trades, you need to:

Sell SEDG Stock

Sell FLEX Stock

Moving on …

The split tape condition we alluded to last week continues to hold sway, with a divergence of strength and weakness among the major sectors. While there are some encouraging signs among key groups—including financials, healthcare and cybersecurity—the primary evidence is still mixed, with cross-currents holding sway and some growth-y names looking for support. Accordingly, we’ll keep our Market Monitor at level 6.

This week’s list has a fair number of stocks that should be able to shake off—or even benefit from—the latest headwinds. Our Top Pick is showing solid momentum and has excellent potential with a promising healthcare franchise.

Midsummer market malaise drags on, but perhaps that will change in the coming weeks now that second-quarter earnings season is in full swing. And while air has certainly come out of the balloon of the AI trade of late, money has mostly rotated into sectors and names that either didn’t participate in or sharply trailed the massive market run-up in April and May. That includes today’s new addition to the Cabot Stock of the Week portfolio. It’s an undervalued healthcare name that I recommended to my Cabot Value Investor readers last month. So far, it’s looking like a smart buy-low choice, as the stock is starting to build momentum. And yet, shares remain undervalued – making it perfect for the current risk-off climate.

Details inside.

The semiconductor selloff went from a sector story to the market’s main event last week, as the Philadelphia Semiconductor Index (SOX) tumbled into a bear market — down 20% from its recent highs — while investors continued to question whether the enormous sums being poured into AI infrastructure will earn their keep. Adding to the drama, oil surged nearly 10% as the fragile U.S.-Iran ceasefire wobbled yet again. The encouraging news is that a cool June CPI report (inflation data) and strong results from the big banks kept money rotating — into energy, financials and consumer staples — rather than fleeing stocks altogether.

The semiconductor selloff went from a sector story to the market’s main event last week, as the Philadelphia Semiconductor Index (SOX) tumbled into a bear market — down 20% from its recent highs — while investors continued to question whether the enormous sums being poured into AI infrastructure will earn their keep. Adding to the drama, oil surged nearly 10% as the fragile U.S.-Iran ceasefire wobbled yet again. The encouraging news is that a cool June CPI report (inflation data) and strong results from the big banks kept money rotating — into energy, financials and consumer staples — rather than fleeing stocks altogether.

The semiconductor selloff went from a sector story to the market’s main event last week, as the Philadelphia Semiconductor Index (SOX) tumbled into a bear market — down 20% from its recent highs — while investors continued to question whether the enormous sums being poured into AI infrastructure will earn their keep. Adding to the drama, oil surged nearly 10% as the fragile U.S.-Iran ceasefire wobbled yet again. The encouraging news is that a cool June CPI report (inflation data) and strong results from the big banks kept money rotating — into energy, financials and consumer staples — rather than fleeing stocks altogether.

As I expected, SpaceX (SPCX) shares have fallen below their 135 IPO price, marking a significant decline from their initial highs above 200.

Earnings growth has accounted for more than 70% of the S&P 500’s total return since the 1990s, with the rest coming from dividends and changes in valuation. The five largest banks in the United States this week posted a combined $49 billion in profit for the last quarter, shattering records amidst increased investment in AI and a surge in related deals.

The July Issue of Cabot Early Opportunities focuses on three companies helping power some of today’s most important industrial growth markets – from aerospace and nuclear energy to infrastructure and specialty materials.

These businesses are benefiting from powerful long-term demand trends, yet all three remain far less followed than many of today’s market favorites. Recent pullbacks toward key moving averages have created attractive entry points as their growth stories continue to unfold.

All the details are inside this month’s Issue.

Last week was all about rotation, as money whipped between sectors seemingly every session. Semiconductors started the week in a hole — extending their early-July selloff after disappointing results from Samsung — before the AI trade came roaring back Thursday and Friday, capped by SK Hynix (SKHYV) pulling off the largest-ever U.S. IPO by a foreign company and META ripping 15% higher on the week. Meanwhile, energy quietly led the sector scoreboard as oil climbed, financials firmed ahead of this week’s bank earnings, and small caps — the stars of recent weeks — took a well-earned breather.

First off, a heads up: I’m running a webinar this Wednesday, July 15, at 1 p.m. ET, where I’ll go into detail about what I’m seeing in the market, what I’m thinking big picture, what would change my mind, a few stocks I think will help lead in the second half of the year. You can sign up for free at cabotwealth.com/webinars (it’s the first one listed).

As for the market, the current environment remains tricky and challenging, with many leaders are either under pressure or getting choppy. The good news is that the fresher leadership areas are still acting well … though even there things are getting whippy. Big picture, we do remain optimistic, but with little progress being made by risk-on areas, we’re content to stay relatively close to shore. We’ll leave our Market Monitor at a level 6 today.

Interestingly, this week’s list does have a lot of growth titles, many of which have leveled off reasonably for a few weeks following big runs. Our Top Pick is dancing to its own bullish drummer, with a non-AI story that has the stock perched near new highs. Try to buy on dips.

A busy week of earnings and inflation reports should help stocks pick a lane after a month of summer stagnation. Recent earnings seasons have helped get stocks going, and with 23.6% EPS growth expected in the second quarter, this time could be similar … as long as this week’s inflation prints (CPI on Tuesday, PPI on Wednesday) don’t spoil the party before it even gets going.

For now, the market is healthy, so it’s a good time to take a swing on a down-and-out Latin American e-commerce giant that is due for a bounce-back. In fact, insiders are betting on one, which is why the stock got the attention of Michael Brush, who recommended it to his Cabot Insider Edge audience recently.

Details inside.

It’s not often that we discuss currencies in the Cabot Turnaround Letter, but given the persistent relative strength of the U.S. dollar right now, I think it’s imperative that we address it—mainly because of how it will likely impact our portfolio holdings going forward.

The top haven asset for the first half of 2026 wasn’t gold, U.S. Treasury bonds or the Japanese yen.

After spending much of the year leading the market higher, small caps have finally run into a little turbulence. Through midday today, the S&P 600 Index is down 1.8% from last Thursday’s close, roughly in line with the S&P 500’s 1.9% decline.

That said, it’s important to keep the recent pullback in perspective. Small caps remain the market’s clear leader in 2026, with the S&P 600 up 20.2% year to date versus an 8.1% gain for the S&P 500.

While flashier, more star-studded teams like Lionel Messi’s Argentina, Kylian Mbappe’s France and Erling Haaland’s Norway garnered most of the headlines at the just-completed World Cup, Spain was the best team. There was nothing flashy about Spain: no mega-stars, not a ton of goals, no relentless attack. Instead, they dominated the tournament with precision passing, immaculate ball control and near-impenetrable (just one goal allowed all tournament!) defense.

High-flying AI-related stocks are facing a high bar of performance. Even what normally would be considered staggering growth is met with a yawn. The backdrop of the Middle East conflict and almost $100 oil is not helpful.

The Philadelphia Semiconductor Index (SOX) has outperformed the S&P 500 by 57% this year, even after a sharp correction. This is basically a macro trade, and there are few industries as cyclical, or as capital-intensive, as semiconductor manufacturing.

The market rolls sideways amidst a slew of conflicting forces.

The S&P 500 has bounced around and is at the same level it was in the middle of May. The primary culprit is technology. That sector has been in a funk. The S&P 500 is hard-pressed to generate any lasting traction while this massive sector, accounting for over 40% of the index, flounders.

The market has gone sideways since May. It seems to be deciding what to do.

It’s encouraging that the resumption of hostilities with Iran has not sent the market lower. It’s also positive that oil prices aren’t rising back to the $100 level earlier in the war, although prices have risen. It’s also another earnings season and analysts expect a big one.

With war being one of the most dominant themes of the last four years, it stands to reason that investors should position their portfolios to account for this conspicuous (and unwelcome) trend.

And lest one be tempted to think that the warfare theme will diminish anytime soon, last week’s article by NPR deflates that illusion: It revealed that global military conflicts are at their highest level since WWII.

Price targets are standard practice on Wall Street. But sometimes, they can act as an artificial ceiling.

For example, say Truist sets a price target on an up-and-coming growth stock that’s 25% higher than its current share price. For a growth stock, a 25% return isn’t much. But then again, the stock could be a total flop, which is the natural boom-or-bust tradeoff growth investors must endure in trading off increased risk for massive upside. So, a price target on a growth stock seems almost like an unnecessary cap on a stock that has the potential to go through the roof.

WHAT TO DO NOW: Continue to trim your sails. In the Model Portfolio, we’ve been getting closer and closer to shore as growth funds and indexes are under pressure and AI stocks cascade lower. Tonight we’re going to further trim Marvell (MRVL) given its ugly action, selling a third of what we have left. That will leave the portfolio with a big 58% cash position. We could put some of that to work if growth names find support, but we want to see key growth measures firm up before buying.

After a brief pause last week, small caps are once again leading the pack.

Through Wednesday’s close, the S&P 600 Small Cap Index is up roughly 21% year to date, compared to gains of about 15% for the S&P 400 MidCap Index, 17% for the Nasdaq and 11% for the S&P 500.

Its earnings season again! That’s a good thing. Earnings just might save the day in an otherwise confusing and uncertain market.

The market is causing whiplash. The Iran peace deal changed things. Stocks held back by high oil prices, and the resulting higher inflation and interest rates, reignited as oil prices came back down after the peace deal. But hostilities with Iran have resumed.

The peace deal may be on hold again. But stocks are hanging in there so far.

The ceasefire with Iran is over and hostilities have resumed. That sounds like a bigger bummer than it’s been in the market so far. Falling oil prices enabled previously beleaguered stocks to soar higher again as the prognosis for inflation and interest rates simultaneously improved. But that rally is over if oil prices spike higher again.

This global insurance provider recently hiked its dividend by $0.35 and also received a Strong Buy rating from Zack’s.

Allied World Assurance (AWH)
from 2 for 1

Allied World Assurance (AWH) splitting 3 for 1 wins the pole position and will be added to the 2 for 1 portfolio next week.

Allied is a...

BUY IDEAS
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Barnes Group (B)

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American Capital (ACAS)
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While this investment bank saw its earnings slip by 11%, due to a decline in bond trading, it still managed to beat estimates, earning $4.02 per share vs. the $3.49 Wall Street analysts expected.

Goldman Sachs (GS)
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One of the stocks on our Buy List that needs to be highlighted...

This bank provides financial products and services to individuals and businesses in India, as well as in Bahrain and Hong Kong.

HDFC Bank (HDB)
from Cabot Top Ten Trader

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This semiconductor company is seeing new interest from investors who are plowing their funds into call options on its shares, ahead of next week’s earnings report. And JMP Securities recently raised its price target on the shares to $46.

Skyworks Solutions (SWKS)
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This information technology company’s shares were recently upgraded to Buy by UBS Securities.

Cognizant Technology (CTSH)
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Cognizant Technology (CTSH) offers complete start-to-finish solutions for designing, testing and integrating complex software systems for corporations. More companies are outsourcing partial or full responsibility of their technology functions to Cognizant....

This mining company has precious metal properties and land positions throughout the Americas, including in Brazil, Chile, Argentina and Mexico.

Yamana Gold (AUY)
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Yamana Gold (AUY) is a gold producer, developer and explorer with assets in Central and South America. Despite an overall tough go for gold since the beginning...

This spirits maker just saw its adjusted earnings rise by more than 72% in the fourth quarter, handily beating estimates.

Constellation Brands Inc. (STZ)
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On Wednesday morning Constellation Brands Inc. (STZ) revealed that it beat fiscal fourth-quarter earnings estimates by a hefty margin. The New York-based beverage maker reported...

This Indian car manufacturer has recently seen 141 institutions increasing their holdings of its stock by 19 million shares.

Tata Motors (TTM)
From Cabot China & Emerging Markets Report

In the 1990s, Tata started making India’s first domestic passenger car. The company matured as a manufacturer in the 2000s, designing and manufacturing a...

This company explores for, develops, produces and markets crude oil and natural gas. Stifel recently raised its target price to $120, noting that high margins, volume growth and free cash flow should push the stock higher.

EOG Resources (EOG)
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With an Overall score of 98, EOG Resources (EOG) is...

This mobile security company will report earnings today, and analysts are increasingly positive.

NQ Mobile Inc. (NQ)
from Unconventional Wealth

Security software on phones and tablets is still a relatively new idea. Chances are, today you don’t know anyone using it. Mobile is the biggest area of growth in the security marketplace—for both...

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.