Thank goodness; the shutdown is over!

And that agreement (although not really agreeing on much!) has helped the markets to continue their upward momentum, albeit with a few hiccups. All eyes are on the Fed, as I write this, with expectations that it will once again lower rates by a quarter of a point.

Artificial intelligence is the biggest thing in the market these days. But AI doesn’t work without energy.

The world doesn’t run on technology. It runs on energy. Energy is the respiratory system of the modern world that can’t function without it. Technology doesn’t work without electricity powering its systems.

Sure, clean energy is the future, but not yet. In fact, the U.S. and the rest of the world still rely on fossil fuels (oil, natural gas, coal) for more than 80% of energy needs and will likely continue to do so for decades to come. But fossil fuel consumption is changing. A new king is emerging – natural gas.

Natural gas is by far the fastest-growing fossil fuel. It is the number one fuel source by far to generate electricity in the U.S. and much of the rest of the world. There are also powerful trends adding to the already growing demand.

U.S. electricity demand is growing at breakneck speed because of data centers, electric vehicles, and increased onshoring of manufacturing. U.S. natural gas exports, in the form of natural gas liquids (NGLs), are soaring. This country is already the largest exporter, and the growth is staggering. U.S. NGL liquid exports over this past year have grown a whopping 67% over the prior year.

Natural gas was already the fastest-growing fossil fuel. The addition of soaring electricity demand and exploding U.S. exports accelerates that growth. The fuel is shaping up to be a dominant theme in 2026. In this issue, I highlight the country’s largest producer of natural gas.

Despite a quiet tone for much of last week, markets ended on a modestly upbeat note as interest rate-cut optimism firmed. Tech and growth names helped push the market higher on hopes the Federal Reserve will ease soon, while small caps and cyclicals got a lift on improving sentiment.

By week’s end, the S&P 500 had risen +0.3%, the Dow Jones Industrial Average had gained +0.5%, the Nasdaq Composite had climbed +0.9%, and the Russell 2000 had advanced +0.8%.

We can’t say much bad about the market’s rebound from its pre-Thanksgiving low area, but we wouldn’t say the rally has been decisive at this point. That’s not bearish, but simply a fact that the recovery needs to continue to progress—a bad two or three days from here could get iffy, though continued strength would likely bring a spate of breakouts. As always, we’ll just take it as it comes—right here, we’re encouraged and are extending our line, but are going slow until we see more stocks confirm on the upside. Our Market Monitor stands at a level 6.

This week’s list reflects some of the broadening out we see in the market, with names from many different nooks and crannies. Our Top Pick is a chipmaker that sat out the dance during the past year and a half but has recently emerged on big volume after earnings as growth accelerates. Try to buy on weakness.

The market rally that materialized over Thanksgiving week is on temporary hold as investors wait to see if the Fed will, in fact, cut interest rates by another 25 basis points as anticipated this week. If it happens, there’s a good chance the risk-on mood will resume, and the major indexes could reach new all-time highs by Christmas. While I’m not big on predicting what’s going to happen with the Fed, the odds heavily (87%) favor investors getting their wish, so let’s play those odds today by adding a speculative mid-cap software stock recently recommended by Mike Cintolo in Cabot Top Ten Trader.

Details inside.

Despite a quiet tone for much of last week, markets ended on a modestly upbeat note as interest rate-cut optimism firmed. Tech and growth names helped push the market higher on hopes the Federal Reserve will ease soon, while small caps and cyclicals got a lift on improving sentiment.

Despite a quiet tone for much of last week, markets ended on a modestly upbeat note as interest rate-cut optimism firmed. Tech and growth names helped push the market higher on hopes the Federal Reserve will ease soon, while small caps and cyclicals got a lift on improving sentiment.

Today we’re jumping into an emerging precision oncology company that is on the cusp of a major Phase 3 data release for a potential best-in-class treatment for rare eye cancers.

The company also has a stacked pipeline of other potential assets and has teamed up with some of the best in the business as it looks to transition from a clinical-stage company to a full-on commercial success.

Suffice it to say, the risks are somewhat higher with a stock like this, given that FDA approval, or denial, will have a major short-term impact on share price performance.

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

Stocks spent the holiday-shortened Thanksgiving week getting well and are again knocking on the door of all-time highs after a sharp pullback through most of November. Value stocks never retreated the way growth titles did, though, and are appearing more in favor by the day. That includes consumer staples, which are still undervalued despite recent momentum. In this month’s Cabot Value Investor issue, we add a once-prominent name from that group that trades at less than half its early-2025 highs – and yet the company never stopped growing. In fact, its sales are accelerating, making it a prime buy-low candidate.

Details inside.

In China, the competition in its EV market is particularly brutal with over 100 companies in the game. Some of those automakers are also working on flying cars to take safety and speed to another level. This is where we go today for a new Explorer recommendation.

Details inside.

Nothing like a little holiday cheer to brighten a grumpy market’s spirits! Salvaging what had theretofore been a miserable November, last week’s Thanksgiving-shortened week brought four straight trading days of buying, nudging the indexes right back to within bad-breath distance of their late-October highs. Is it a sign of things to come in December? Perhaps. If so, now is a good time to pounce on a more speculative biotech play that’s been in favor all year. It’s a name recommended by Tyler Laundon in the November issue of his Cabot Early Opportunities newsletter. Today, we add it to the Stock of the Week portfolio.

Details inside.

After a holiday-shortened but very productive week for the market, here’s what’s happening with all our positions.

As expected, the Federal Reserve cut interest rates by a quarter point yesterday. This was largely already baked into the market. Looking ahead, Fed Chairman Jerome Powell had an impactful comment: “What do you do if you are driving in the fog? You slow down.”

This comment is consistent with our strategy of alternating aggressive and conservative stocks, taking partial profits to build cash, and seeking international diversification.

This Halloween, there’s nothing to fear. At least not for investors.

OK, nothing is a bit of an exaggeration. Today’s anticipated meetup between President Trump and Chinese President Xi Jinping could go sideways, putting high tariffs between the two mega-powers back on the menu. There could be some key earnings blowups ahead as we remain in the thick of third-quarter reporting season. And the government shutdown is more than a month old at this point, which could take a toll on the market.

The market just keeps on going. So far this week, the S&P 500 has hit a new high on both Monday and Tuesday.

The S&P 500 is now up about 17% year to date with more than two months left in 2025. There is a good chance that the index delivers another 20%-plus return year, which would make it three consecutive years of such returns for the first time in nearly 30 years. Sure, we’re in a Fed rate-cutting cycle. Investors love that. But artificial intelligence is the main force driving the market higher.

One of the most attractive industries right now for turnaround-focused investors is chemicals, with the share prices for many major producers in this group hovering at or near multi-year lows.

The reasons for this collective underperformance vary, and while not all chemical companies are in a classic turnaround situation, many of them are under serious margin pressures and are implementing strategic plans aimed at improving their company’s fortunes and reversing the stock price declines.

WHAT TO DO NOW: The market continues to hang in there, but growth stocks have been far trickier, with many pulling back sharply, others testing support and a few breaking down. Still, it’s mostly mixed, with some names perking up, so we’re staying flexible, especially as earnings season plows ahead. This week we sold two names that cracked—MP Materials (MP) and GE Vernova (GEV)—which leaves us with 43% in cash. We’ll stand pat tonight, though we could redeploy some of the money into stronger names if growth stocks continue to stabilize.

There’s been a jump in volatility among individual stocks and some sectors (gold, oil, retail investor favorites, etc.), but at an index level, things continue to be pretty smooth. The S&P 600 SmallCap Index is trading higher than it was a week ago.

Let’s talk about bubbles.

There’s been a whole lot of investor speculation of late over whether we’re near an artificial intelligence bubble, akin to what we saw from the dot-com bubble at the turn of the century or the housing bubble that led to the 2008-09 Great Recession. Indeed, with AI spending (an estimated $300 to $400 billion this year) outpacing revenue (an estimated $60 billion this year) by roughly a 6-to-1 ratio – about double the capital expenditures-to-revenue ratio just before the dot-com bubble burst – the angst over an AI bubble is understandable, and perhaps warranted.

Looking good. The bull market is enduring the historically troubling months of September and October with nary a sign of resistance.

The S&P 500 is up about 15% year to date and within a whisker of the all-time high, as investors are more excited about earnings than worried about tariffs or the government shutdown. And why shouldn’t they be? Government shutdowns are always temporary. And tariff negotiations always culminate in an arrangement that satisfies the market.

Stocks started this week on a strong note. After sluggish performance over the past month, the S&P 500 is gaining steam.

Investors are focusing on the promising earnings season and a tamping down of tensions with China. The Trump administration has moderated its stance on China and will meet with them in the weeks ahead. Meanwhile, earnings season is heating up with Tesla (TSLA), Intel (INTC), Netflix (NFLX), and Coca-Cola (KO) reporting this week.

The introduction of fear to the financial market can be either a good thing or a bad thing—but seldom is it neither.

In the first case, increasing fear among investors in an environment characterized by fairly limited public participation (i.e. an uncrowded market), relatively unstretched valuations and plenty of liquidity often results in the “wall of worry” phenomenon in which stocks actually benefit from the rising fear levels.

Both the S&P 600 SmallCap Index and the Russell 2000 are trading higher than they were a week ago, making the ugly selloff last Friday look like a one-off event.

That said, it’s totally valid to be at least a little concerned about the trade war heating up again. And while it sounds like progress could soon be made in the government shutdown (Senate Majority Leader Thune is rumored to be talking with Democrats about extending ACA subsidies in exchange for reopening the government), there’s little doubt that the longer the shutdown goes on the greater the risks are to the market.

Explorer stocks were mixed this week as Asian stocks struggled amidst increased U.S.-China economic tensions and concern over Chinese economic growth.

Commodities are back but something to keep in mind was mentioned to me by a friend in the energy business: “America is running out of shale oil.” This has big implications for world oil markets and America’s energy mix since if we are running out of the shale oil that can be extracted at about $60/barrel, higher oil and energy prices are around the corner.

I’m recommending that we sell our position in Helen of Troy (HELE).

We’re going to step aside from Byrna Technologies (BYRN) today.

Helen of Troy (HELE) is imploding on earnings today, despite beating estimates on both the top and bottom lines. Revenue, however, declined 9% year over year, while earnings per share of 59 cents were less than half the $1.21 the company earned in the same quarter a year ago, though they were north of the 54-cent estimate

Sell a Half Position in UiPath (PATH)

Sell Live Nation Entertainment (LYV) & ThredUp (TDUP)

Fill Second Half: Sensient (SXT) and Unity (U)

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.

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.

If professional investment companies are not making their decisions based on the price of the stock, neither should you.

Here are some common-sense, down-to-earth ways to control your risk, so that the market’s inevitable potholes never cause fatal damage to your portfolio.

More than six years after the Fed lowered the Federal Funds rate to 0%-0.25% in December 2008, the economy has strengthened to the point that the Fed is considering raising rates to prevent inflation.

I created Cabot Dividend Investor’s three-tiered portfolio to address the needs of the widest possible variety of investors with some combination of these goals. But this variety means that you need to figure out how to mix and match my recommendations to best fit your goals.

Our sell rules demand we sell under a number of conditions, which can be roughly dividend into two broad categories: fundamental weakness or unacceptable risk.

Here are some ways you can use options to hedge or create additional yield in your portfolio. In addition to covered calls, which generate additional income on stocks you already own, I also share hedging strategies using puts and spreads.

Here’s a quick review on how to invest in emerging markets the Cabot way.

This is a collection of tips on stock chart reading, something that’s key to Mike Cintolo’s growth stock methodology, but something few individual investors (and even professional investors) understand too well.

A unique market timing tool, we use the Cabot Two-Second Indicator to determine the health of the stock market every day.

Here are some common questions we’re received about Cabot Dividend Investor.

Today, we take a look back at every sale made from the Cabot Dividend Investor portfolio from inception in February 2014 to the end of April 2015 to see how our sold stocks have fared.

Diversification is usually one of the first risk management principles investors learn. It’s simple enough to understand. At its most basic, diversification is simply an extrapolation of the old advice not to put all your eggs in one basket. And it’s good advice.