Despite some mid-week wobbles for stocks, especially in the growth sector, the market once again closed the week at new highs as the S&P 500 gained 1.9%, the Dow rallied 2.2% and the Nasdaq advanced by 2.3%.

Despite some mid-week wobbles for stocks, especially in the growth sector, the market once again closed the week at new highs as the S&P 500 gained 1.9%, the Dow rallied 2.2% and the Nasdaq advanced by 2.3%.

To begin, just a heads up that there will be no Cabot Wealth Explorer issue on November 13 as I will be in transit for a mining and resource conference in Senegal.

Morgan Stanley (MS) notes that stock picking is back, with single-stock activity as opposed to funds and ETFs seeing a significant rise in recent months. This is interesting as there are now more ETFs trading on exchanges than stocks. Blending the two together is the optimal strategy for most.

Before we dive into this week’s covered call idea, we need to clean up a couple positions from the October expiration cycle.

After an ugly day October 10, the major indexes showed solid overall support last week, but under the hood was another round of volatile action, The market’s intermediate-term trend continues to tilt up, though we’re still taking things on a stock-by-stock basis and are closely watching earnings season, which is about to rev up. In the meantime, we’re just following the plan that’s been working for us: Being selective on the buy side, holding strong names (albeit with some partial profits on the way up) and also raising stops as time passes. We’ll again stick with a level 7 on the Market Monitor.

This week’s list is a mixed bag in terms of sectors and setups, with some we’re considering entering on strength and others on pullbacks. Our Top Pick is likely in for years of accelerating growth, and after a big run into early October, the recent pullback looks normal. We’re OK starting small here or on a bit more weakness.

Stocks proved their resilience once again, shaking off the U.S.-China tariff re-escalation fears and creeping back toward their early-October highs. An encouraging start to third-quarter earnings season helped, but that was mostly the banks. The real test will come in the next couple weeks, when most of the big tech companies report. So it’s still choppy waters out there. With that in mind, today we add another fairly low-risk play to the Stock of the Week portfolio in the form of a healthcare REIT that offers a decent yield. It’s a stock Tom Hutchinson just recommended to his Cabot Dividend Investor audience.

Details inside.

Coming off a nasty close for the market the previous week, the indexes rebounded this last week as the S&P 500 gained 1.7%, the Dow added 1.6%, and the Nasdaq rallied 2.1%.

Coming off a nasty close for the market the previous week, the indexes rebounded this last week as the S&P 500 gained 1.7%, the Dow added 1.6%, and the Nasdaq rallied 2.1%.

The market is taken another shot across its bow, with the indexes bending, with many leaders getting dented and with our Two-Second Indicator still negative. That said, while bending, things haven’t broken, with our Cabot Tides still positive and most leaders refusing to crack. We’re not complacent, as we’re holding our 30% in cash and placing three stocks on Hold--but we’re also not running for the storm cellar, as earnings season is likely to determine the next big move in the market and leaders.

The market has hit a little turbulence as we wade into the early innings of the Q3 earnings season. But despite the bumps, there are more than enough stocks acting well enough to fill the pages of the October Issue.

This month, I continue to spread things around, exploring new ideas from the Fintech, software and coal (yes, coal!) industries while plucking two steady performers from our Watch List to add to the portfolio.

Enjoy!

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.

Tariff uncertainty is back. But this time it’s just keeping stocks from going higher, not dragging the market lower.

The administration is currently threatening to enforce 30% tariffs on Mexico and the European Union (EU) starting on August 1. However, investors perceive a strong chance that President Trump will either back off the threat or make deals. Meanwhile, the S&P 500 continues to hover right near the high.

In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Alcoa (AA), Centuri Holdings (CTRI), Dollar Tree (DLTR), GE Aerospace (GE), Intel (INTC) and Paramount Global (PARA).

Note: Due to a technical issue, publication of your Cabot Cannabis Investor update has been delayed by one day. We apologize for any inconvenience; future updates and issues will be delivered per the normal publishing schedule.

If you have been steadily averaging down in cannabis stocks during the sector’s dark days all year, well done.

You are finally being rewarded.

Action in the small-cap indices continues to be very encouraging.

Since the beginning of June, both the S&P 600 SmallCap Index and Russell 2000 have outperformed the S&P 500 and the Nasdaq.

Corporate America is weathering trade uncertainty remarkably well. The S&P 500 index has recovered more than 20% since bottoming out in April but is up only 6% this year.

You may have noticed that the stagflation scenario (inflation and slow growth) is a theme being promoted by the financial media with comparisons to the 1970s. But even if this becomes a reality, stocks are still your best option to protect and grow your wealth. In the 1970s, large-cap value outperformed growth stocks and long-term Treasury bonds. Dividend-paying stocks also outperformed. Our strategy will remain the same regardless of the pundits, value, quality, and momentum.

Uncertainty is growing in a market perched near the high.

Tariffs are front and center again. The July 9 deadline, which began the market rally from the low when the administration issued a 90-day extension, is rapidly approaching. The deadline raises many of the issues the market hated back in April. Stocks started the week on a down note in anticipation.

*Note: Your weekly Cabot Turnaround Letter update is arriving a day early, on Thursday, July 3, due to the market holiday on Friday, July 4, in observance of Independence Day.

In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Alcoa (AA), Bloomin’ Brands (BLMN), GE Aerospace (GE), Intel (INTC), Paramount Global (PARA) and Toast (TOST).

GE Aerospace (GE) strength driven by record backlogs in its commercial aerospace segment.

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.

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.

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.

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.

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.

Sell Fidelity National Information Services (FIS)

Sell Amer Sports (AS) for Modest Gain

Shares of Peloton (PTON) are up double digits this morning after the company delivered a better-than-expected Q2 fiscal 2025 report before this morning’s opening bell. This is a turnaround story so take the numbers in that context. Management is working to curb costs and lay the groundwork for a return to growth, not trying to grow right now.

Sell Fortrea Holdings (FTRE); Buy Pan American Silver (PAAS)

A Tale of Two Earnings Reports: Atlassian (TEAM) and Vestis (VSTS)

Sell AST SpaceMobile (ASTS)

DeepSeek: “Gift to the World” or Nightmare for U.S. AI Ambitions

WHAT TO DO NOW: The popular AI stocks were hit extremely hard today on fears that the CapEx spending boom could be cut short following the DeepSeek successes, which in turn dragged the major indexes lower. Outside of AI, the damage was reasonable, which is a plus, but with the major indexes still trending sideways and few stocks decisively moving higher, we’re remaining relatively cautious. In the Model Portfolio, we’re forced to quickly cut our loss in Marvell Tech (MRVL), which was caught up in the out-of-the-blue selling storm among AI stocks. Our cash position will now be around 53%.

WHAT TO DO NOW: The market has rallied nicely in the past week, which has improved the evidence—though for both our indicators and leading stocks, it’s been good but not necessarily decisive just yet. Even so, we’ve been sitting on a big cash hoard for a few weeks and we’ll start to come off that today, buying half-sized (5% of the portfolio) positions in Marvell Tech (MRVL) and Reddit (RDDT) while also restoring our Buy rating on Shift4 (FOUR). Our cash position will now be around 48%—more details in tonight’s issue of Growth Investor.

FTAI & GEV Updates

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.

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.