The market has rebounded encouragingly from last Monday’s Greenland/tariff fears—and, ideally, that shakeout will prove to be the last one for the big-cap indexes and for growth stocks before a sustained run higher. Still, to this point, while resilient, the evidence hasn’t changed, with the broad market doing well, but also with many areas of the market still lagging. Thus, we’ll again leave our Market Monitor at a level 7, but now’s the time to really pay attention—a reversal lower would obviously be iffy, but a rotation into many growth stocks that have rested for three months is possible.

This week’s list is again well-rounded, with many names acting well ahead of their reports. For our Top Pick, we’ll go with a commodity-ish name that’s finally hesitated the past couple of weeks as its moving averages start to catch up. A bit more weakness should lead to a solid entry.

More than half the country is buried in snow or ice today. And yet, stocks continue to hum along regardless of the weather, economic headwinds or myriad geopolitical worries. A big one was quickly stamped out last week, when renewed tariff threats caused a brief market shock before cooler heads prevailed in Davos. This week will be dominated by mega-cap earnings and another Fed meeting. Given the market’s resilience against all-comers of late, today we take another big swing with a mid-cap industrial stock that was the Top Pick from Tyler Laundon in the most recent edition of Cabot Early Opportunities advisory.

Details inside.

Please note this is an update focused solely on our open positions as I am away from my home office and stuck in travel limbo having been impacted by the snow/ice storm this past weekend. I HOPE to be back at the desk this evening, but that is in question. However, while I’m away from my desk, I am still able to monitor our positions if we need to make moves.

Please note this is an update focused solely on our open positions as I am away from my home office and stuck in travel limbo having been impacted by the snow/ice storm this past weekend. I HOPE to be back at the desk this evening, but that is in question. However, while I’m away from my desk, I am still able to monitor our positions if we need to make moves.

If you are a commodities or small-cap investor, you’d probably be heavily invested right now -- but, for growth stocks, the environment remains challenging, with lots of ups and downs but no real progress, and with most growth funds (including the Nasdaq) under performing even defensive stocks. The odds favor the next major move being up, but until that starts, we’re staying relatively close to shore and waiting for more stocks to get going, possibly during earnings season.

Momentum has broadened out to start 2026, with several previously under‑the‑radar groups (like industrials) showing powerful relative strength, even as last year’s market leaders take a breather.

This month’s issue leans into these emerging trends. I feature companies tied to infrastructure, building systems, aerospace engines, and industrial filtration. I’ve also included a fast‑moving biotech company with multiple near‑term catalysts.

Enjoy!

Coming off record highs early last week, U.S. equities drifted lower as the week progressed as the first week of the corporate earnings season unfolded. And despite upbeat earnings from select tech and semiconductor names, profit-taking set in across large caps late in the week and kept the major averages slightly underwater by Friday’s close. Small caps bucked the broader trend, continuing their early-year leadership as the Russell 2000 extended gains on optimism around economic resilience and rotation out of mega caps. For the week, the S&P 500 lost 0.4%, the Dow fell 0.3%, and the Nasdaq Composite declined by 0.7%.

The market took a good-sized hit today, and we see the action as a shot across the bow and are remaining flexible. But as always, we’re going to go with what’s in front of us: Right here, many stocks remain in good shape, though clearly things are mixed, while some yellow flags have arisen. It’s imperative to stick with what’s working, aim for decent entry points and actively manage your portfolio (partial profits on the way up, raising stops, etc.). We’ll again stick with a level 7 on the Market Monitor, though the next few days should be telling.

This week’s list has a bigger growth mix, though as has been the case, there’s something for everyone here. Our Top Pick has shown outstanding power and ties into both AI and the recently strong defense and space trades. Try to buy on further weakness.

Tariffs are back in the news, and the market doesn’t like it. How long they remain in the news is anybody’s guess. Perhaps the situation will be settled over lunch in Davos this week. In the meantime, fourth-quarter earnings season serves as a welcome diversion and ramps up this week after some mixed results from the banks last week. Speaking of banks, today we add a regional play that should pair well with our Morgan Stanley (MS) holding. It’s a lower-risk, income-generating stock that is a new choice of Cabot Dividend Investor Chief Analyst Tom Hutchinson.

Details inside.

*Please note, S&P 500 futures are indicated lower by 1.5% this morning on renewed tariff fears.

Coming off record highs early last week, U.S. equities drifted lower as the week progressed as the first week of the corporate earnings season unfolded. And despite upbeat earnings from select tech and semiconductor names, profit-taking set in across large caps late in the week and kept the major averages slightly underwater by Friday’s close. Small caps bucked the broader trend, continuing their early-year leadership as the Russell 2000 extended gains on optimism around economic resilience and rotation out of mega caps. For the week, the S&P 500 lost 0.4%, the Dow fell 0.3%, and the Nasdaq Composite declined by 0.7%.

*Please note, S&P 500 futures are indicated lower by 1.5% this morning on renewed tariff fears.

Coming off record highs early last week, U.S. equities drifted lower as the week progressed as the first week of the corporate earnings season unfolded. And despite upbeat earnings from select tech and semiconductor names, profit-taking set in across large caps late in the week and kept the major averages slightly underwater by Friday’s close. Small caps bucked the broader trend, continuing their early-year leadership as the Russell 2000 extended gains on optimism around economic resilience and rotation out of mega caps. For the week, the S&P 500 lost 0.4%, the Dow fell 0.3%, and the Nasdaq Composite declined by 0.7%.

Explorer stocks are off to a good start in 2026. Alibaba (BABA) shares soared 15.8% this week as it was reported that Alibaba Cloud has captured about 36% of China’s AI cloud market share. Archer Aviation (ACHR) shares followed last week’s 11.5% gain with a 5.8% gain this week as its CEO presented at Bank of America’s Defense and Commercial Aerospace Forum. Alphabet (GOOG) shares gained more than 4% this week as Apple (AAPL) announced that it had selected Gemini to power a more personalized version of its Siri chatbot. And Coeur Mining (CDE) shares were up 7.7% this week following last week’s 8% gain.

Now we look to a region that is in the headlines, performed well last year, and is likely to be at the center of attention this year.

The law of averages is a powerful thing … especially when it comes to investing.

Stocks and sectors that outperform for an extended period of time often regress to the mean, sometimes violently, when people least expect it. On the flip side, stocks and sectors that have underperformed for months or even years start to get noticed by bargain hunters and play catch-up, even if it’s a bit more gradual.

Circle December 15 on your calendar. That’s the day the Supreme Court will likely let us know whether it decides to hear a major cannabis lawsuit. If it says yes, cannabis stocks will rally hard. Cannabis stocks may well even rally in the run-up to that date.

The suit challenges federal jurisdiction over cannabis in states where it is legal. We still won’t know the final outcome if the court decides to take up the case. So, any rally might be sellable for very short-term traders. Personally, I will continue to hold through, because the timing of any rescheduling news is uncertain.

The market is close to the high, and all eyes are on the Fed.

The market has priced in a 0.25% fed funds rate cut already. It could get ugly if the Fed doesn’t cut the rate on Wednesday. But that is unlikely. The rally in interest rate-sensitive stocks took place over the past few weeks. Now, those stocks are pulling back as investors fret over what the Chairman might say about future rate cuts in the minutes following the rate cut announcement.

It’s that time of the year when economists and market mavens spill an abundance of ink making year-ahead stock forecasts and boom/bust warnings. As there seems to be an abnormal amount of recession predictions for the year ahead—including a few from some reputable sources—I think we should examine the question: Will the U.S. witness a major economic shock in 2026?

WHAT TO DO NOW: The evidence has improved of late, though we haven’t seen many decisive green lights from our indicators. Still, with so much cash, we’ll dip a couple of toes in tonight and then follow up … if the good vibes continue. Tonight, we’ll add half-sized positions (5% of the account) in Eli Lilly (LLY) and JFrog (FROG), leaving us with a still-big 55% cash hoard. Details below.

The resilient market forges on. After the biggest market dip since April in the middle of last month, the S&P has gained it all back in the last couple of weeks.

Stocks weakened last month as investors worried that tech stock valuations were too high, as the artificial intelligence trade may be overdone. They also worried that the Fed would not cut rates in December. But stocks were rejuvenated after some positive statements by Fed members greatly increased the odds of a December fed funds rate cut.

This is one confusing market. It’s doom and gloom one day and then optimism the next. Investors can’t seem to make up their minds about whether the world is going to Hell in a handbag or it’s time to buy. What’s going on?

Last week was confounding to say the least. Two events promised to address the market’s chief concerns: the sustainability of the AI trade and the state of the economy. Last week’s earnings report from the ultimate AI bellwether Nvidia (NVDA) and the long-awaited jobs numbers could answer both questions. Both the earnings report and the jobs report were everything investors could have hoped for. Stocks tanked anyway.

Due to a short Thanksgiving week, rather than the usual stock-by-stock update, I will briefly highlight some significant moves by Explorer stocks. I’d also like to wish you and your family a great long Thanksgiving weekend.

Regrettably, Universal Technical Institute (UTI) has not worked out for us despite filling a crucial need and posting impressive earnings, as the stock was down sharply this week. I’m moving this to a sell. Coeur Mining (CDE) and International Business Machines (IBM) were both up about 6% this week, while Sea Limited (SE) was down 7%.

A couple of weeks ago we discussed the likelihood that the “all things AI” momentum trade would sooner or later lose luster. I called into question the tenacity of some of 2025’s top-performing tech stocks while also speculating that some of this year’s wayside laggards would launch a return to prominence in the coming months.

WHAT TO DO NOW: The market tried to rebound today after Nvidia’s earnings last night—but big investors stepped up to sell, driving the market and many growth stocks into the red. Our Cabot Tides have now joined the Two-Second Indicator in negative territory, which has us remaining cautious and holding plenty of cash. In the Model Portfolio, we’re going to book partial profits in the ProShares S&P 500 Fund (SSO), selling one-third of our stake and holding the rest. That will leave us with a cash position of 62%. Details below.

A quick housekeeping note: with our offices closed next Thursday and Friday for Thanksgiving, we won’t be publishing the regular Weekly Update next week. I will, of course, send out Special Bulletins if/as needed. I hope you have a happy and healthy Thanksgiving!

On to the market.

Nvidia’s (NVDA) upbeat revenue forecast due to ongoing AI demand should help to tamp down bubble concerns today and possibly stanch the selling that pushed the S&P 500 and Nasdaq below their 50-day moving average lines earlier this week and inflicted the same damage on the S&P 600 SmallCap Index last Thursday.

WHAT TO DO NOW: The indexes continue to act fine, but individual growth stocks remain hit or miss based on the news of the day. Today we’re going to sell our position in MP Materials (MP), taking a tiny gain and holding the cash (which will now be around 35%). Details below.

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.

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.

These rules are the foundation of the Cabot Market Letter investment philosophy.

Here’s an overview of everything you should know about preferred stocks before adding them to your portfolio.

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.

MLPs (short for master limited partnership) are exempt from U.S. corporate taxes in exchange for passing on most of their income to investors, who are called unitholders. As a result of this unusual situation, unitholders accept the tax burden on the distributions they receive from the MLP.

One of the things many investors like best about dividend income is that it can qualify for the lower Federal capital gains tax rate. For investors in the 25% to 35% marginal tax bracket, that’s 15%, and for those in lower brackets, it’s 0%. But not all dividends and distributions qualify.

Real estate investment trusts are special-purpose entities, with special tax status, that own real estate and pass along most of the income from the real estate (rents or mortgage payments) to shareholders. They can own any type of real estate, and many specialize in one type.

This month, I’m considering making the first sale from our portfolio, to cut our losses in Seadrill (SDRL). I think now is a good time to address our approach to selling, which stems from our focus on long-term, income-oriented returns.

Guide to Options Trading

Even if you’ve been investing for decades, income investing can introduce a lot of new lingo and acronyms, which are not always well explained. Here are some of the key terms I use in Cabot Dividend Investor or that you may see as you research your investments further.

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.