Issues
The market opened the New Year with a bang last week, partially thanks to a peaceful conclusion to the Fiscal Cliff deal. But, really, the market has been acting well enough for many weeks, and with some of the uncertainty finally in the past, the buyers flexed their muscle. At this point, we’re seeing excellent strength in many cyclical- and turnaround-type companies—financials, industrials, transports and the like, so that’s where your focus should be today. Growth stocks are doing well enough but we can’t say they’re leading quite yet ... though earnings season, which gets underway soon, can always change the landscape.
This week’s list is heavy on the cyclical side of the list, with many stocks coming back to life after 18- to 24-month rest periods—big launching pads that have the potential to generate sustained upmoves. Our favorite of the week is (believe it or not) General Motors (GM), whose business is at its best levels in five years and whose stock is acting like it has much more upside ahead. Buy on any weakness.
This week’s list is heavy on the cyclical side of the list, with many stocks coming back to life after 18- to 24-month rest periods—big launching pads that have the potential to generate sustained upmoves. Our favorite of the week is (believe it or not) General Motors (GM), whose business is at its best levels in five years and whose stock is acting like it has much more upside ahead. Buy on any weakness.
| Stock Name | Price | ||
|---|---|---|---|
| TripAdvisor (TRIP) | 55.14 | ||
| SodaStream (SODA) | 142.91 | ||
| Reliance Steel & Aluminum Co. (RS) | 117.45 | ||
| Robert Half (RHI) | 78.58 | ||
| Cheniere Energy (LNG) | 63.82 | ||
| General Motors Company (GM) | 0.00 | ||
| Ctrip.com International Ltd. (CTRP) | 34.94 | ||
| Citigroup Inc. (C) | 0.00 | ||
| Ashland Inc. (ASH) | 0.00 | ||
| ARM Holdings (ARMH) | 0.00 |
The market took a hit last week, as Washington’s ineptitude continued to grab the headlines and cause investors to raise cash and book some profits. The action wasn’t pretty, for sure, but we can’t say it’s changed the big picture—the rally since the mid-November lows is still intact, and many of the stocks and sectors that had been performing well took last week’s dip in stride. Another day or two of big declines would change our outlook, but right here, you should continue to “lean bullish,” holding your better performers and putting some money to work as opportunities arise. You should, however, also hold a decent cash position until we see more power and decisiveness from the market.
This week’s list is almost evenly split between great growth companies and turnarounds, including a couple of well-known names that are looking good. We like many of the charts, but we’ll go with Qihoo 360 (QIHU) as our favorite of the week. The stock is a bucking bronco, but it has great growth and a big story.
This week’s list is almost evenly split between great growth companies and turnarounds, including a couple of well-known names that are looking good. We like many of the charts, but we’ll go with Qihoo 360 (QIHU) as our favorite of the week. The stock is a bucking bronco, but it has great growth and a big story.
| Stock Name | Price | ||
|---|---|---|---|
| Tenet Healthcare (THC) | 0.00 | ||
| Terex (TEX) | 0.00 | ||
| Rackspace (RAX) | 0.00 | ||
| Rackspace (RAX) | 0.00 | ||
| Qihoo 360 (QIHU) | 0.00 | ||
| Mohawk Industries (MHK) | 0.00 | ||
| General Motors Company (GM) | 0.00 | ||
| FLSR (FLSR) | 0.00 | ||
| Equinix, Inc. (EQIX) | 547.73 | ||
| 3D Systems (DDD) | 0.00 | ||
| Bank of America (BAC) | 0.00 |
It’s not uncommon for nascent market rallies to feature a lot of crosscurrents, and we’re seeing just that during the past few weeks—the action has been generally constructive, but the environment remains news-driven with lots of rotation among stocks and sectors on a day-to-day basis. That said, because of the resilience of the major indexes and the strength (or set-ups) seen from leading stocks, we think you should continue to “lean bullish,” which means doing some buying as opportunities arise, but not pushing the accelerator to the floor. If this rally is the real deal, we expect more and more stocks from a variety of sectors to begin lifting off from multi-week launching pads. It’s something to watch for.
This week’s list is another mixed bag, with many turnaround situations and a few true growth plays. Our favorite of the week is Trimble Navigation (TRMB), an under-the-radar story with solid growth and a powerful stock.
This week’s list is another mixed bag, with many turnaround situations and a few true growth plays. Our favorite of the week is Trimble Navigation (TRMB), an under-the-radar story with solid growth and a powerful stock.
| Stock Name | Price | ||
|---|---|---|---|
| Trimble Navigation (TRMB) | 0.00 | ||
| PVH Corp. (PVH) | 0.00 | ||
| Melco Crown (MPEL) | 0.00 | ||
| Gulfport Energy (GPOR) | 0.00 | ||
| Eastman Chemical (EMN) | 0.00 | ||
| Computer Sciences (CSC) | 0.00 | ||
| Salesforce.com (CRM) | 0.00 | ||
| Cree, Inc. (CREE) | 67.96 | ||
| Abercrombie & Fitch (ANF) | 15.37 | ||
| Aecom Technology (ACM) | 0.00 |
The market’s rally since its mid-November lows has proven durable enough to turn our intermediate-term indicators back into a bullish mode. (Our Market Monitor, shown to the left, has followed suit.) Granted, the buyers aren’t exactly flexing their muscle here, with plenty of choppy action as investors await word on the Fiscal Cliff. But there’s enough evidence that the sellers have left the building, seen in both the major indexes, which have refused to give back any gains of late, and in leading stocks, more and more of which are setting up. You shouldn’t head for the deep end yet, but putting some sidelined cash to work is advised.
This week’s list is a hodgepodge of stocks and sectors, with a handful of turnaround-type stories thrown in. Our favorite of the week is MasTec (MTZ), an off-the-radar name in the construction business. Growth is picking up, and the stock is acting excellently.
This week’s list is a hodgepodge of stocks and sectors, with a handful of turnaround-type stories thrown in. Our favorite of the week is MasTec (MTZ), an off-the-radar name in the construction business. Growth is picking up, and the stock is acting excellently.
| Stock Name | Price | ||
|---|---|---|---|
| United Rentals, Inc. (URI) | 0.00 | ||
| Rackspace (RAX) | 0.00 | ||
| Rackspace (RAX) | 0.00 | ||
| MasTec, Inc. (MTZ) | 66.65 | ||
| Marathon Petroleum Corporation (MPC) | 0.00 | ||
| Louisiana-Pacific (LPX) | 0.00 | ||
| Lowe’s Companies (LOW) | 98.15 | ||
| First Solar (FSLR) | 83.74 | ||
| Canadian Pacific Railway (CP) | 0.00 | ||
| ASML Holding (ASML) | 350.01 | ||
| Amazon.com (AMZN) | 2.00 |
The market’s rally continues to impress, with the major indexes building on their gains and more individual stocks acting well. At this time, our indicators are this close to turning positive; we’ll officially leave our Market Monitor in neutral territory, but if you see a good opportunity, it’s OK to take it. We are growing more encouraged that the market’s two-month correction is over, but we need to see more power among potential leaders; it’s really the one missing ingredient in the market’s nascent rally.
This week’s list is a mixed bag of growth stories and sectors, but there are a few that have us interested. Our favorite of the week is a well-known company that most investors now dislike. It’s Facebook (FB), the social media giant, whose stock is one of the few that has shown great power during the past three weeks. Try to buy on weakness.
This week’s list is a mixed bag of growth stories and sectors, but there are a few that have us interested. Our favorite of the week is a well-known company that most investors now dislike. It’s Facebook (FB), the social media giant, whose stock is one of the few that has shown great power during the past three weeks. Try to buy on weakness.
| Stock Name | Price | ||
|---|---|---|---|
| Ulta Beauty (ULTA) | 331.95 | ||
| Stratasys (SSYS) | 0.00 | ||
| Martin Marietta Materials (MLM) | 261.52 | ||
| Gulfport Energy (GPOR) | 0.00 | ||
| GameStop (GME) | 0.00 | ||
| Facebook, Inc. (FB) | 0.00 | ||
| eBay Inc. (EBAY) | 0.00 | ||
| Dillard’s (DDS) | 0.00 | ||
| Colfax (CFX) | 0.00 | ||
| Abercrombie & Fitch (ANF) | 15.37 |
After a straight-down move following the election, the market rallied smartly during Thanksgiving week on light volume. Clearly, the move was good to see, and there are a decent number of good-looking set-ups out there. However, by our measures, the market’s trends remain down, and we think the rubber will meet the road from this point forward—if the correction is over, we expect more and more stocks to shape up, and for the major indexes to build on their gains. If not, we expect the sellers to take advantage of these prices during the next few days. For now, remain cautious, and we’ll let you know if we get any new buy signals.
In the meantime, it’s imperative to be up on the best-acting stocks and sectors in the market. This week’s list has many names that are off most investors’ radar screens, which we like. Our favorite of the week is Salesforce.com (CRM), a big firm that looks ready to get going after a two-year pause.
In the meantime, it’s imperative to be up on the best-acting stocks and sectors in the market. This week’s list has many names that are off most investors’ radar screens, which we like. Our favorite of the week is Salesforce.com (CRM), a big firm that looks ready to get going after a two-year pause.
| Stock Name | Price | ||
|---|---|---|---|
| Tenet Healthcare (THC) | 0.00 | ||
| Regeneron Pharmaceuticals (REGN) | 512.96 | ||
| Qihoo 360 (QIHU) | 0.00 | ||
| Packaging Corp (PKG) | 0.00 | ||
| HollyFrontier Corporation (HFC) | 0.00 | ||
| HDFC Bank Limited (HDB) | 0.00 | ||
| Gilead Sciences (GILD) | 75.10 | ||
| Eaton Vance Corp. (EV) | 0.00 | ||
| Salesforce.com (CRM) | 0.00 | ||
| Alaska Air Group (ALK) | 0.00 |
The market remains under pressure, though the sellers have eased up a bit during the past couple of trading days; it’s possible that, after a sharp plunge at the end of last week we could see a bounce or countertrend rally develop. That said, this remains a news-driven environment, especially as our leaders in Washington begin their posturing to deal with the Fiscal Cliff. Overall, the intermediate-term trend remains down, and while there are some stocks and sectors resisting the decline, it’s best to stick with your generally defensive stance, limiting new buying to small amounts, taking profits (or partial profits) quickly when you get them and holding a good amount of cash on the sideline.
This week’s list is a hodgepodge of names that are doing well, usually because of recent catalysts or great reactions to quarterly results. Our favorite is a lower-priced name that looks like a special situation—Nam Tai Electronics (NTE) is showing exceptional strength, has huge earnings and sales, and even a big dividend, too. It’s a hot potato, but a small position on weakness could work very well.
This week’s list is a hodgepodge of names that are doing well, usually because of recent catalysts or great reactions to quarterly results. Our favorite is a lower-priced name that looks like a special situation—Nam Tai Electronics (NTE) is showing exceptional strength, has huge earnings and sales, and even a big dividend, too. It’s a hot potato, but a small position on weakness could work very well.
| Stock Name | Price | ||
|---|---|---|---|
| AMC Networks (AMCX) | 0.00 | ||
| BE Aerospace (BEAV) | 0.00 | ||
| BioMarin Pharmaceutical (BMRN) | 0.00 | ||
| Computer Sciences (CSC) | 0.00 | ||
| Copa Holdings (CPA) | 0.00 | ||
| Lions Gate Entertainment Corp. (LGF) | 0.00 | ||
| Mohawk Industries (MHK) | 0.00 | ||
| Nam Tai Electronics (NTE) | 0.00 | ||
| Quanta Services (PWR) | 91.45 | ||
| Thor Industries (THO) | 104.76 |
The market environment hasn’t changed much during the past couple of weeks; the intermediate-term trend of the market is down, and few stocks are managing to make meaningful progress on the upside. That said, it’s also not a disaster out there; some growth stocks have been hammered, but many groups are holding up well and most indexes are just a few percent off their peaks. Of course, the U.S. elections are tomorrow, and it’s possible the results could change the market’s course. But right now, we’ll keep our Market Monitor in neutral territory as the sellers remain in control.
This week’s list is a bit of a hodgepodge of stocks and sectors, but most of the names have recently reacted well to earnings, which is always a positive clue. Our favorite of the week is Whirlpool (WHR), a turnaround stock that is showing exceptional strength. It’s not changing the world, but the numbers look outstanding. Try to buy on weakness.
This week’s list is a bit of a hodgepodge of stocks and sectors, but most of the names have recently reacted well to earnings, which is always a positive clue. Our favorite of the week is Whirlpool (WHR), a turnaround stock that is showing exceptional strength. It’s not changing the world, but the numbers look outstanding. Try to buy on weakness.
| Stock Name | Price | ||
|---|---|---|---|
| WPI (WPI) | 0.00 | ||
| Whirlpool (WHR) | 0.00 | ||
| Affiliated Managers Group, Inc. (AMG) | 0.00 | ||
| CommVault (CVLT) | 0.00 | ||
| Eastman Chemical (EMN) | 0.00 | ||
| Expedia Group (EXPE) | 0.00 | ||
| GameStop (GME) | 0.00 | ||
| Louisiana-Pacific (LPX) | 0.00 | ||
| NXP Semiconductors (NXPI) | 0.00 | ||
| PVH Corp. (PVH) | 0.00 |
Hurricane Sandy has the market closed today and possibly tomorrow, but we don’t think that’s going to affect the market’s path all that much. It’s not 2008 out there, but there’s no question the intermediate-term trend is still down, and that earnings season has been generally rough thus far. We flipped our Market Monitor into neutral territory a couple of weeks ago and it remains there today; it’s better to focus on capital preservation these days than capital appreciation, though some new buying here or there is fine—just be sure to keep your positions smaller than normal, and to keep your stops in place.
The good news is that we have seen a decent amount of big-volume support appear in many stocks during earnings, including more than a few commodity and turnaround situations. Our favorite of the week is Packaging Corp. (PKG), a firm with a supposedly boring story ... but with exciting numbers and a beautiful chart.
The good news is that we have seen a decent amount of big-volume support appear in many stocks during earnings, including more than a few commodity and turnaround situations. Our favorite of the week is Packaging Corp. (PKG), a firm with a supposedly boring story ... but with exciting numbers and a beautiful chart.
| Stock Name | Price | ||
|---|---|---|---|
| 3D Systems (DDD) | 0.00 | ||
| ARM Holdings (ARMH) | 0.00 | ||
| Cabot Oil & Gas (COG) | 0.00 | ||
| HDFC Bank Limited (HDB) | 0.00 | ||
| Jazz Pharmaceuticals (JAZZ) | 0.00 | ||
| Melco Crown (MPEL) | 0.00 | ||
| Michael Kors Holdings Limited (KORS) | 73.22 | ||
| Packaging Corp (PKG) | 0.00 | ||
| Royal Caribbean Cruises (RCL) | 0.00 | ||
| United Rentals, Inc. (URI) | 0.00 |
Markets coughed up a hairball at the end of last week and weren’t all that happy today. Defensive stocks had a better time of it, but many growth issues came under heavy pressure. A few high-profile issues (like Google GOOG) got taken to the cleaners after poorly received earnings reports. It’s too early to conclude that markets are in for a big correction, but the action is negative enough to warrant taking a slightly more defensive posture. You should tighten up the leash on your stocks, maybe be a little quicker to take partial profits or cut losers off if their charts deteriorate. Don’t go in for wholesale selling, but work to protect your portfolio.
This week has an interesting list of metals, large-caps and retail, but the Editor’s Choice is Citigroup (C), a global banking giant that’s making a slow comeback from a massive correction when the housing bubble burst. It’s a good value for a high-quality stock that’s appealing to institutional investors.
This week has an interesting list of metals, large-caps and retail, but the Editor’s Choice is Citigroup (C), a global banking giant that’s making a slow comeback from a massive correction when the housing bubble burst. It’s a good value for a high-quality stock that’s appealing to institutional investors.
| Stock Name | Price | ||
|---|---|---|---|
| Silver Wheaton (SLW) | 0.00 | ||
| Weyerhaeuser (WY) | 0.00 | ||
| Chico’s FAS (CHS) | 0.00 | ||
| Citigroup Inc. (C) | 0.00 | ||
| Coeur Mining (CDE) | 0.00 | ||
| Domino’s Pizza (DPZ) | 339.47 | ||
| LyondellBasell Industries NV (LYB) | 0.00 | ||
| Ocwen Financial (OCN) | 0.00 | ||
| Oshkosh (OSK) | 95.04 | ||
| Polaris Industries (PII) | 0.00 |
The market and many stocks had a bad last week, no doubt about it—instead of slowly fading, the selling pressures have increased of late as earnings season begins in earnest. We can’t say we’re seeing a rash of breakdowns, but enough selling has occurred that we’re moving our Market Monitor into the neutral camp. A shift back in a week or two is possible if earnings season unfolds bullishly, but for now, we recommend limiting your new buying to smaller positions (maybe half or two-thirds of what you’d usually buy) and consider some names that could trend on their own (like precious metals names, for instance). You should, however, still try to hold onto shares of your most resilient performers, giving them a chance to re-emerge.
This week’s list has a few tempting growth stocks, as well as some turnaround plays that are doing well. But we’ll stick with the precious metals group, which has consolidated nicely after bolting higher last month. Allied Nevada Gold (ANV) is one of many that looks like it wants to head higher, bolstered by the price of gold and higher output.
This week’s list has a few tempting growth stocks, as well as some turnaround plays that are doing well. But we’ll stick with the precious metals group, which has consolidated nicely after bolting higher last month. Allied Nevada Gold (ANV) is one of many that looks like it wants to head higher, bolstered by the price of gold and higher output.
| Stock Name | Price | ||
|---|---|---|---|
| ANV (ANV) | 0.00 | ||
| AOL, Inc. (AOL) | 0.00 | ||
| Barclays (BCS) | 0.00 | ||
| CTRX (CTRX) | 0.00 | ||
| DVA (DVA) | 0.00 | ||
| Eagle Materials Inc. (EXP) | 0.00 | ||
| AG (AG) | 0.00 | ||
| Google Inc. (GOOG) | 0.00 | ||
| Rackspace (RAX) | 0.00 | ||
| Royal Caribbean Cruises (RCL) | 0.00 |
The market bounced back in the first few days of last week, but Friday’s negative reversal, combined with today’s downmove, makes it clear that there are still sellers lurking out there. Our thoughts remain unchanged—on a near-term basis, expect more choppiness and hesitation; taking some profits on strength and holding some cash makes sense as we head into earnings season. That said, we can’t conclude the intermediate-term trend has turned down, either for the market or for most stocks; thus, while you should dump your losers and laggards, we recommend holding on to most of your best performers.
This week’s list reflects the recent environment—most of the names are either a bit thinly traded or have the ability to trade outside the market’s influence (housing, precious metals, etc.). Our favorite of the week is Fusion-io (FIO), a relatively new technology firm that is growing rapidly and has been acting very well over the past few months.
This week’s list reflects the recent environment—most of the names are either a bit thinly traded or have the ability to trade outside the market’s influence (housing, precious metals, etc.). Our favorite of the week is Fusion-io (FIO), a relatively new technology firm that is growing rapidly and has been acting very well over the past few months.
| Stock Name | Price | ||
|---|---|---|---|
| Accenture (ACN) | 0.00 | ||
| Align Technology (ALGN) | 316.20 | ||
| CLGX (CLGX) | 0.00 | ||
| Cosan Limited (CZZ) | 0.00 | ||
| Fusion-io (FIO) | 0.00 | ||
| NetSuite, Inc. (N) | 0.00 | ||
| ONYX Pharmaceuticals (ONXX) | 0.00 | ||
| Qihoo 360 (QIHU) | 0.00 | ||
| Whirlpool (WHR) | 0.00 | ||
| AUY (AUY) | 0.00 |
Updates
Has there ever been anything as overvalued as SpaceX (SPCX)?
Elon Musk’s rocket and space-based internet company reported $18.7 billion in revenue in 2025. That’s less than half the revenue declining electronics store chain Best Buy (BBY, $41.7 billion) generated last year, less than International Paper Company (IP, $23.6 billion), and barely more than Casey’s General Stores (CASY, $17.6 billion). Those three companies have a combined market cap of roughly $67 billion. As of this writing, SpaceX has a market cap of $2.7 trillion. That’s more than the combined market cap of Walmart (WMT), JPMorgan (JPM) and Visa (V). Together, those three companies generated $847 billion in revenue last year.
Elon Musk’s rocket and space-based internet company reported $18.7 billion in revenue in 2025. That’s less than half the revenue declining electronics store chain Best Buy (BBY, $41.7 billion) generated last year, less than International Paper Company (IP, $23.6 billion), and barely more than Casey’s General Stores (CASY, $17.6 billion). Those three companies have a combined market cap of roughly $67 billion. As of this writing, SpaceX has a market cap of $2.7 trillion. That’s more than the combined market cap of Walmart (WMT), JPMorgan (JPM) and Visa (V). Together, those three companies generated $847 billion in revenue last year.
Small caps continue to hold up well. The S&P 600 Small Cap Index is up modestly since last Thursday and is trading just below the fresh all-time highs it hit earlier this week. The group’s resilience stands out, especially against a backdrop of narrowing leadership and ongoing rotation beneath the market’s surface.
The main macro development this week was the Fed’s June meeting and Chair Kevin Warsh’s press conference, which confirmed a shift in policy direction.
The main macro development this week was the Fed’s June meeting and Chair Kevin Warsh’s press conference, which confirmed a shift in policy direction.
WHAT TO DO NOW: The market’s bounce has been a good one, and the intermediate-term outlook remains bright. That said, near term, there are still some crosscurrents (rotation into the broad market, Dow outperforming the Nasdaq) that tell us growth stocks could throw us another curveball in the coming week or two. Overall, then, we’re mostly standing pat, but we’re going to add a half-sized stake in Guardant Health (GH) here, leaving us with a still-good-sized cash position of 37% or so. Details below.
Stocks started this week with a huge rally as the Iran ceasefire deal appears to be the real thing.
Of course, it’s been months of supposed peace deals falling apart. It’s hard to believe. I’m sure that fact is holding the market back somewhat. But this one is different for a couple of reasons.
Of course, it’s been months of supposed peace deals falling apart. It’s hard to believe. I’m sure that fact is holding the market back somewhat. But this one is different for a couple of reasons.
Stocks are starting off this week with a huge rally as the U.S. and Iran have reached a ceasefire deal.
We’ve been here before. These peace deals have fallen apart several times. I’m sure that fact is holding the market back somewhat. But this one is different for a couple of reasons. First, it’s the furthest a peace deal has gotten with both sides agreeing and independent verification from Pakistan. Second, this is what a peace deal would look like at this point if it’s real and lasting.
We’ve been here before. These peace deals have fallen apart several times. I’m sure that fact is holding the market back somewhat. But this one is different for a couple of reasons. First, it’s the furthest a peace deal has gotten with both sides agreeing and independent verification from Pakistan. Second, this is what a peace deal would look like at this point if it’s real and lasting.
[Note: The Cabot Turnaround Letter weekly update won’t be published next Friday, June 19, due to the market being closed for the Juneteenth holiday.]
Before we get into the main topic for today’s newsletter update, a quick note on the portfolio is in order. I’m continuing our “spring cleaning” effort that we began last week by trimming a couple more of our holdings, but I’m also adding a new position to take the place of the recent deletions.
Before we get into the main topic for today’s newsletter update, a quick note on the portfolio is in order. I’m continuing our “spring cleaning” effort that we began last week by trimming a couple more of our holdings, but I’m also adding a new position to take the place of the recent deletions.
After two near-record-setting months, stocks are encountering their first real turbulence since March. It’s no surprise.
While stocks go up an average of 10% a year, they rarely do so in a straight line. And after the S&P 500 rallied nearly 20% in April and May and the Nasdaq shot up nearly 30%, a pullback of some kind – or possibly even a true correction – was to be expected. It seems it’s happening all at once.
While stocks go up an average of 10% a year, they rarely do so in a straight line. And after the S&P 500 rallied nearly 20% in April and May and the Nasdaq shot up nearly 30%, a pullback of some kind – or possibly even a true correction – was to be expected. It seems it’s happening all at once.
Stocks look set to enter the summer near all-time highs, but leadership has narrowed, volatility has ticked up, and there’s been renewed scrutiny on the AI trade and valuation concerns in some of the market’s biggest winners.
At the same time, the macro backdrop remains a mix of resilience and intermittent turbulence. While economic data continues to hold up, energy prices remain elevated due to the ongoing Iran conflict – which has no end in sight – keeping upward pressure on inflation and yields.
At the same time, the macro backdrop remains a mix of resilience and intermittent turbulence. While economic data continues to hold up, energy prices remain elevated due to the ongoing Iran conflict – which has no end in sight – keeping upward pressure on inflation and yields.
Tech, commodity, AI, and Explorer stocks struggled this week as concern over capital expenditures increased. Mideast tensions intensified and inflation numbers came in yesterday at their highest rate in over three years, fueled by rising energy costs. The combination of anticipated higher interest rates and rising bond yields impacted the price of precious metals, with gold sliding below $4,200 an ounce and silver falling below $64 an ounce.
Stocks look to enter summer near all-time highs, but leadership has narrowed and volatility has ticked up thanks to renewed scrutiny on the AI trade and open-ended questions about valuations in some of the hottest areas of the market.
There’s also been more focus on the evolving macro landscape, which features a resilient U.S. economy but stubbornly high energy prices due to the ongoing Iran conflict, and somewhat elevated yields. We’re now looking at a higher likelihood of a Fed rate hike, with the odds of a hike by December now well over 50%.
There’s also been more focus on the evolving macro landscape, which features a resilient U.S. economy but stubbornly high energy prices due to the ongoing Iran conflict, and somewhat elevated yields. We’re now looking at a higher likelihood of a Fed rate hike, with the odds of a hike by December now well over 50%.
The high-flying AI stocks got crushed on Friday. But those stocks started this week higher. Where do we go from here?
The technology-heavy Nasdaq index fell 4% on Friday, and the S&P 500 fell for the week for the first time in 10 weeks. A couple of things spooked investors. The AI trade turned sour after Broadcom (AVGO) reported earnings that included slightly lower revenue projections for its AI chips than were expected. Also, a blowout jobs report strengthened the case for a Fed rate hike by the end of the year.
The technology-heavy Nasdaq index fell 4% on Friday, and the S&P 500 fell for the week for the first time in 10 weeks. A couple of things spooked investors. The AI trade turned sour after Broadcom (AVGO) reported earnings that included slightly lower revenue projections for its AI chips than were expected. Also, a blowout jobs report strengthened the case for a Fed rate hike by the end of the year.
A major economic narrative that took shape in recent years was the decline and (presumptive) inevitable death of the so-called “petrodollar,” as a growing number of countries diversified their foreign exchange reserves away from the U.S. dollar and toward gold and alternative currencies like the Chinese yuan.
Alerts
Our contributor has a new buy recommendation in the transportation industry, is taking some nice profits on a medical stock, and is saying goodbye to an energy company that has underperformed.
Buy: Knight Transportation (KNX)
from Cabot Benjamin Graham Value Investor
Knight Transportation (KNX) reported decent sales and earnings. Sales advanced 14% and...
Buy: Knight Transportation (KNX)
from Cabot Benjamin Graham Value Investor
Knight Transportation (KNX) reported decent sales and earnings. Sales advanced 14% and...
Sell: ITC Holdings (ITC)
from Cabot Benjamin Graham Value Investor
Updated from Investment Digest 758, June 18, 2014
ITC Holdings (ITC) missed earnings estimates for four straight quarters, and the trend could continue. ITC is likely to lose a transmission rate complaint, and the outcome could include refunding previously collected revenues. More rate...
from Cabot Benjamin Graham Value Investor
Updated from Investment Digest 758, June 18, 2014
ITC Holdings (ITC) missed earnings estimates for four straight quarters, and the trend could continue. ITC is likely to lose a transmission rate complaint, and the outcome could include refunding previously collected revenues. More rate...
Sell: Stryker Corp. (SYK)
from Cabot Benjamin Graham Value Investor
Updated from Investment Digest 762, October 22, 2014
Stryker Corp. (SYK) reached its Minimum Sell Price of 101.66 today, July 24. The company’s second-quarter results were released last night. Sales rose 3% and EPS tripled. Management raised its sales and earnings estimates for...
from Cabot Benjamin Graham Value Investor
Updated from Investment Digest 762, October 22, 2014
Stryker Corp. (SYK) reached its Minimum Sell Price of 101.66 today, July 24. The company’s second-quarter results were released last night. Sales rose 3% and EPS tripled. Management raised its sales and earnings estimates for...
This fund’s top five holdings are Whitewave Foods Company (WWAV, 0.61% of assets), Acuity Brands Inc (AYI, 0.56/5), United Therapeutics Corp (UTHR, 0.55%), SVB Financial Group (SIVB, 0.53%), and Extra Space Storage Inc (EXR, 0.52%).
Vanguard Small Cap Growth Index (VISGX)
from The Moneyletter
Vanguard Small Cap Growth Index (VISGX) employs a full...
Vanguard Small Cap Growth Index (VISGX)
from The Moneyletter
Vanguard Small Cap Growth Index (VISGX) employs a full...
This tech security firm hammered estimates, posting EPS (non-GAAP) of $0.12, and beating analysts’ forecasts by five cents last quarter. The company’s revenues also beat estimates, soaring 28%, to $78.1 million.
Infoblox (BLOX)
from Capitalist Times
We’ve added Infoblox (BLOX) to the Wealth Builders Portfolio’s information technology sleeve as a buy up to...
Infoblox (BLOX)
from Capitalist Times
We’ve added Infoblox (BLOX) to the Wealth Builders Portfolio’s information technology sleeve as a buy up to...
This financial tech company is gaining momentum. Zacks currently rates it a Buy.
Yodlee (YDLE)
from Game Changers
Yodlee (YDLE), a pioneer in the FinApps industry, has developed the Yodlee Financial Cloud, a secure platform that powers a growing set of FinApps. The company has designed its platform to be easily customized to...
Yodlee (YDLE)
from Game Changers
Yodlee (YDLE), a pioneer in the FinApps industry, has developed the Yodlee Financial Cloud, a secure platform that powers a growing set of FinApps. The company has designed its platform to be easily customized to...
This emerging markets funds is generally concentrated on 100 or fewer stocks, with technology, financial and consumer cyclical the leading sectors.
T. Rowe Price New Asia (PRASX)
from Bob Carlson’s Retirement Watch
T. Rowe Price New Asia (PRASX) is a no-load fund can own stocks in any of the Asian markets except Japan....
T. Rowe Price New Asia (PRASX)
from Bob Carlson’s Retirement Watch
T. Rowe Price New Asia (PRASX) is a no-load fund can own stocks in any of the Asian markets except Japan....
Today’s buy recommendation beat EPS estimates by five cents last quarter, and next year’s numbers have been revised upward three times in the past 30 days. And our contributor is locking in gains on a previous recommendation.
Buy: CF Industries Holdings (CF)
from 2 for 1 Stock Split Newsletter
CF Industries Holdings (CF)...
Buy: CF Industries Holdings (CF)
from 2 for 1 Stock Split Newsletter
CF Industries Holdings (CF)...
Sell: ProAssurance Corporation (PRA)
from 2 for 1 Stock Split Newsletter
Updated from Investment Digest 735, January 3, 2013
Based on recent prices, ProAssurance’s (PRA) overall return for 2 for 1 will be about 19% when we sell it next week. The sale will be at or near the 52-week high for PRA....
from 2 for 1 Stock Split Newsletter
Updated from Investment Digest 735, January 3, 2013
Based on recent prices, ProAssurance’s (PRA) overall return for 2 for 1 will be about 19% when we sell it next week. The sale will be at or near the 52-week high for PRA....
A Chinese flooring scandal has sent shares of this retailer to a buyable level. Earnings are due August 5, and analysts estimate an EPS of $0.06.
Lumber Liquidators Holdings, Inc. (LL)
from Validea Hot List Newsletter
Strategy: P/E/Growth Investor
Based on: Peter Lynch
Guru Score: 91%
Lumber Liquidators Holdings, Inc. (LL) is a retailer of hardwood...
Lumber Liquidators Holdings, Inc. (LL)
from Validea Hot List Newsletter
Strategy: P/E/Growth Investor
Based on: Peter Lynch
Guru Score: 91%
Lumber Liquidators Holdings, Inc. (LL) is a retailer of hardwood...
This bank’s shares are discounted; it may benefit from consolidation in the financial sector, and recently insiders and institutions have been increasing their holdings, by 1.9% and 5.04%, respectively.
First United Corporation (FUNC)
from Contra the Heard
The stock price of FUNC has been pretty much flat for the first half of...
First United Corporation (FUNC)
from Contra the Heard
The stock price of FUNC has been pretty much flat for the first half of...
This tech company is beefing up its cloud and other software services and remains a buy.
F5 Networks (FFIV)
from Dow Theory Forecasts
F5 Networks (FFIV) is the country’s largest seller of a product you’ve probably never heard of—application delivery controllers, or ADCs.
These devices manage traffic on computer servers, allowing websites and communications...
F5 Networks (FFIV)
from Dow Theory Forecasts
F5 Networks (FFIV) is the country’s largest seller of a product you’ve probably never heard of—application delivery controllers, or ADCs.
These devices manage traffic on computer servers, allowing websites and communications...
Portfolios
Strategy
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.