What started as a good week for the bulls was quickly vanquished by renewed U.S./China trade fears last week. How long these worries will again weigh on the market is anyone’s guess. However, Friday’s ugly selloff was enough to send the S&P 500 lower by 2.4% on the week, while the Dow fell 2.7%, and the Nasdaq lost 2.5%. Monday’s encouraging bounce-back erased some of those gains, however. We’ll see where it goes from here.

There have been a few shots across the bow in recent weeks, and last week was another, with Friday’s big selloff hitting just about everything, though today’s bounce took some sting out of that. Overall, after six months with hardly any pullbacks, the market could easily be ready for a “real” correction—however, anticipating such a decline isn’t advised. Don’t get us wrong, our antennae are up and we continue to advise being selective, but we’re mostly focused on the next few days: A strong bounce in leaders and the indexes would be positive, but a break of last week’s lows would likely usher in a volatile, corrective period. For now, with most of the evidence unchanged, our Market Monitor remains at a Level 7.

This week’s list has something for everyone, though it’s again full of more growth-y titles. Our Top Pick is part of a newly strong group, and whose stock actually rebounded to a new high today.

Stocks hit another pothole this week after President Trump re-escalated tariff rhetoric against China last Friday, which genuinely spooked the market for the first time in months. He has since walked back some of those comments, and the market is rebounding in an encouraging way today. But the U.S.-China trade war is definitely back in the news, so today we aim to steer clear of it by adding a new position in something that’s a little outside our normal sandbox: a foreign currency. More specifically, it’s a fund that offers exposure to a well-known European currency, and it’s up more than 12% year to date – with more potential upside ahead. The fund was recently recommended by Carl Delfeld to his Cabot Explorer audience.

Details inside.

What started as a good week for the bulls was quickly vanquished by renewed U.S./China trade fears. How long these worries will again weigh on the market is anyone’s guess. However, Friday’s ugly selloff was enough to send the S&P 500 lower by 2.4% on the week, while the Dow fell 2.7%, and the Nasdaq lost 2.5%.

What started as a good week for the bulls was quickly vanquished by renewed U.S./China trade fears. How long these worries will again weigh on the market is anyone’s guess. However, Friday’s ugly selloff was enough to send the S&P 500 lower by 2.4% on the week, while the Dow fell 2.7%, and the Nasdaq lost 2.5%.

The markets don’t seem too swayed by the government shutdown, as they continue to remain near all-time highs.

Economically speaking, we’re not getting some reports, like inflation or unemployment, due to the shutdown. But manufacturing seems to be holding up; real estate prices continue to moderate (up 1.8%); existing home sales were down 0.2%; and consumer confidence dipped a bit. Not much to rattle the markets.

Gold hit $4,000 an ounce and the signal this is sending is not hard to grasp.

Investors are enjoying stock gains but are hedging downside currency and stock price risk as well as a hedge on growing government debt and geopolitical risk. Gold seems the most popular safe haven as it is viewed as a safe harbor asset in a way that the greenback used to be viewed. Gold’s rally began almost three years ago, fueled by central banks and Chinese investors leery of both its stock and property markets.

After spending most of the summer making a series of new highs, it’s been more of the same so far this fall.

The drawback is that the market is high-priced. Technology stocks, driven by the AI catalyst, have driven stocks higher. But certain sectors have not had a great year. Despite the impressive performance of the overall market over the last few years, there are still bargains to be found.

The real estate sector struggled during inflation and rising interest rates and has been the worst-performing sector over the last five years. Healthcare has floundered all year because of uncertainty regarding tariffs and new pricing policies from Washington. It has been the second-worst-performing market sector over the last year.

But things are turning around in both beleaguered sectors. The Fed started cutting the fed funds rate again in September and two more cuts are expected this year. The long-anticipated issues in the healthcare industry have revealed themselves. And it doesn’t seem nearly as bad as feared. As a result, healthcare stocks had the strongest weekly rally in more than 20 years.

In this issue, I highlight a REIT that specializes in healthcare properties. It has a stellar track record of performance and has among the fastest earnings growth among REITs. It also pays a strong dividend yield and will likely benefit in the months ahead from a rally in either sector.

Despite the worries surrounding the government shutdown, the market continued its winning ways last week as the S&P 500 and Dow both rallied 1.1%, and the Nasdaq added 1.3%.

The market’s uptrend continues, but as has been the case for many weeks, it’s somewhat tricky out there, with news-driven moves, selling on strength, the occasional bout of rotation and potholes—all while large swaths of the market are doing a lot more chopping than trending. That’s not “bad,” per se, but it remains a selective environment: We continue to take things on a stock-by-stock basis, focusing on strong names that are ideally fresher in their uptrends, while also being active with portfolio management. We’ll again leave our Market Monitor at a level 7.

This week’s list again has a heavy growth component, and not all are in the AI realm, which we find encouraging. Our Top Pick is a blue chip e-commerce name that, after a couple of false starts, looks like it’s ready to move.

Stocks keep reaching new heights, as last week’s concerns about the market starting to show cracks under the surface seem to have been overblown, at least in the near term. Third-quarter earnings season gets underway next week, and expectations are high again, with economists expecting 8% growth. Companies may have to exceed those lofty expectations to keep this rally going. For now, though, the market is rolling.

To account for some possible bumpiness ahead, however, today I’m adding a big-name value stock to our portfolio. It’s one that I recommended to my Cabot Value Investor audience last month, and it’s already off to a fast start. It’s a company that thrives when the global economy is sound – which it is, despite myriad fears to the contrary.

Details inside.

Despite the worries surrounding the government shutdown the market continued its winning ways last week as the S&P 500 and Dow both rallied 1.1%, and the Nasdaq added 1.3%.

The market is at another new high and looking good. Anticipated Fed rate cuts and a revitalized artificial intelligence trade are driving stocks higher.

It’s Fed Day! And a rate cut is expected. That’s even better than Prince Spaghetti night to Wall Streeters. More than 90% of traders are expecting the first fed funds rate cut in 2025 to be 0.25%. Hopes for a 0.50% cut likely went out the window with the higher-than-expected August CPI number.

Stocks made another new high this week as investors expect a resumption of Fed rate cuts on Wednesday.

The Fed Chairman indicated that the fed funds rate will be cut at the September meeting during his Jackson Hole comments last month. Wall Street traders are pricing in a 90%-plus probability of a 0.25% cut on Wednesday. And consensus expectations are for two more such cuts before the end of this year.

The ultimate “fear gauge” isn’t the CBOE Volatility Index (VIX), as financial market pundits often insist. My contention is that it’s actually gold, which arguably is the most historically reliable barometer of how worried the average investor is over various economic, geopolitical and market-related developments.

WHAT TO DO NOW: The top-down, market-wide evidence remains in good shape, and encouragingly, growth stocks have revved up decently over the past week, though the action remains heavily concentrated in AI infrastructure-type names. There are still lots of crosscurrents and many names are hitting the occasional pothole, though, so picking your stocks and spots remains vital. In the Model Portfolio we’re making one new buy—a half-sized stake in Alnylam Pharmaceuticals (ALNY)—while placing MP Materials (MP) on Hold. We could have some other moves in the next few days (including averaging up on names in the portfolio), but tonight we’ll buy ALNY and go from there. Our cash position will be around 43%.

With jobs numbers (and revisions) looking pretty iffy and inflation numbers looking as expected (CPI, today), if not slightly better (PPI, yesterday), the chances of the Fed cutting rates next Wednesday are essentially a lock.

In fact, the only reason the probability of a 25bps cut is only 89% is because the chance of a 50bps cut is 11%!

The market likes this news very much. And so do small caps.

This is, almost certainly, our last update before the Fed starts slashing interest rates for the first time this year. According to the CME Group’s FedWatch Tool, there is now a 100% chance Jerome Powell and company will cut rates by some amount on September 17; 90% think it will be by 25 basis points, another 10% think it will be by 50 basis points, much like last September.

The waiting game continues. President Donald Trump teased cannabis rescheduling in an August 11 press briefing, suggesting it would happen in a few weeks.

A month has passed, but no joy yet for cannabis investors.

While it would make more sense to reschedule closer to the 2026 mid-term elections for greater political impact, media reports once again recently cited Washington, D.C., insiders who say rescheduling will happen soon.

The market is enduring the post-summer market well, so far. The expected Fed rate cut is pushing stocks higher.

There are few things Wall Street loves more than rate cuts. And there is one almost surely on the way. Traders are assigning better than 90% probability to a cut. But speculation is growing as an increasing number of analysts expect a 0.50% cut, instead of the usual 0.25%.

It has been called “Beijing’s missile fashion week” by news outlets, and it commanded a fair share of this week’s headlines. It’s also a reminder to investors why the defense sector is still in a leadership position from a relative strength standpoint, driven by ongoing military conflicts in Eastern Europe and the Middle East.

Yesterday, Alphabet (GOOG) shares were up 8% after it avoided harsh antitrust penalties keeping its browser and partnership with Apple (APPL). Alibaba (BABA) shares were up 9.9% this week as quarterly cloud growth was up 26% year-over-year and profits exceeded expectations.

Uncertainty and a weak dollar are two reasons gold and silver are doing so well. The pressure on the Federal Reserve, political volatility, and voracious central bank buying from China and other countries are also factors.

The post-Labor Day market is here. And it’s starting off ugly.

The sobered-up, post-summer investor is notoriously cranky. That’s why September is historically the worst month. Combine that fact with a market that is within a whisker of the high with plenty of uncertainty swirling around, and you have a recipe for trouble.

The day of reckoning has arrived. The summer is over. It’s after Labor Day. What will sobered-up investors see when they really start paying attention again?

The post-summer investor can be cranky. That’s why September is historically the worst-performing month in the market. Combine that fact with a market that is within a whisker of the high with plenty of uncertainty swirling around, and you have a recipe for potential turbulence.

We’re going to make a couple of moves today ahead of tomorrow’s Fed meeting and the publishing of the September Issue of Cabot Early Opportunities.

Sell Dynatrace (DT) and Waystar (WAY)

My August pick, Argan (AGX), has become one of the core ways for small-cap investors to play the AI data center, natural gas power and electrification of everything themes. The company grew revenue by 50% last year. As such, expectations from Argan have been high, despite management’s continued conservativism given the current year growth rate will be slower (around 10%) than last year before ramping up again in FY27.

Shares of Byrna (BYRN) are trading modestly higher this morning after the company released preliminary revenue results for Q3.

Credo Tech (CRDO) up 10% on Earnings

WHAT TO DO NOW: The weakening of growth stocks that’s been going on for weeks has resulted in all-out selling this week—we came in with 43% in cash, which has helped, but today we’re selling the rest of our Palantir (PLTR) and Rubrik (RBRK) stakes, leaving us with a large 57% on the sideline. Details below.

If you’re a typical Cabot growth investor, you like to own stocks of fast-growing companies ... the kind that go up fast and come down fast. The ride up with these stocks is wonderful. But the ride down can be shocking. Stocks like these can easily fall 40%, 50% or more in a prolonged market decline, destroying the value of your portfolio.

Using Options to Hedge a Portfolio


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.

I want to clarify a few things about our Hold and Buy ratings.

This guide will help you execute the three types of options strategies recommended in Cabot Options Trader: Buying puts and calls, covered call writing and spreads.

This guide will help you execute the options strategies recommended in Cabot Options Trader.

Guide to Options Trading — Pro Version

A BDC, or Business Development Company, is an investment that gives ordinary investors a way to participate in the rarified world of venture capital.

Our market timing indicators are discussed in every issue of Cabot Growth Investor. Here are detailed explanations of what they are and how we use them.

Changing interest rates affect all income investors, but since they can have a wide variety of effects, figuring out whether changes in rates are going to help you or hurt you can be a complex problem.

If you follow these rules, you’re sure to boost your portfolio’s results.

My stock-picking strategy has been refined over the course of 28 years, and has been quite stable for the last six years. My investment goals are (1) minimize stock market risk, (2) achieve capital gains, with dividends as a welcome addition to total return and (3) outperform the U.S. stock markets.