This remains a “buy weakness” market. Sure, there are plenty of reasons for concern – which is almost always the case. But the positives continue to outweigh the negatives. So, I’m moderately bullish on stocks, particularly the ones that insiders favor.

Let’s start with three negatives.

It’s true that seasonal demand for certain foods and drinks—and the companies that produce them—is typically discounted well in advance by investors. Nonetheless, there’s evidence that interest in this category is picking up appreciably this summer.

My recent screening for turnaround candidates has picked up more than a few food and beverage companies that had fallen out of favor but are now attractive—and even showing signs of accumulation in some cases.

Despite the major indexes trading near the highs, most stocks have struggled.

For most of the rest of the market, the problem is oil. The price per barrel of crude oil skyrocketed to over $110 from under $60 before the war. And prices stayed elevated for more than three months. Oil is involved in everything. And that means inflation. And inflation means high interest rates.

But that’s in the past. The future is likely to be different.
Peace changes the dynamic. Without war, oil prices will fall. Interest rates will come down. That rate hike may be off the table. And stocks held back by inflation and high interest rates should be poised to move higher.

The pessimists have it all wrong. The resilient economy isn’t precarious. The restraints were precarious. When the falling oil prices unleash a stronger economy, it will change things. Let’s get ahead of the curve with stocks that will benefit.

Before we dive into this week’s covered call idea we need to move on from three stock positions coming out of June expiration, as the calls we sold expired worthless.

To execute these trades you need to:

Sell YOU stock

Sell PL stock

Sell VIAV stock

Moving on ...

Last week was a bit of a disjointed, volatile affair, so we’re being a bit more selective when it comes to stock selection and entry points. That said, the intermediate-term picture remains as bright as ever, with the trends for leading indexes, sectors and stocks pointed up and with impressive resilience and mostly-normal action even after many stocks posted massive gains in April and May. We’re leaving our Market Monitor at a level 8, aiming to give our winning stocks some rope and look for fresh buys on dips.

This week’s list is again heavy on growth names, though there are a few newer titles that haven’t appeared before. Our Top Pick is an out-of-the-way AI play that’s seeing humongous new orders and just completed a major acquisition.

Editor’s Note: There will be no issue of Cabot Stock of the Week next Monday. You will receive your next issue on Monday, July 6.

Rotation is in full swing, and that’s making for a healthier, less top-heavy market despite the S&P 500 and Nasdaq trading below their early-June tops. As the air has come out of the AI trade a bit, investors have simply moved money into the many unloved and undervalued sectors – financials, healthcare, utilities, materials. The latter sector is where today’s new portfolio addition comes from. It’s a little-known name Tyler Laundon dubbed his Top Pick in this month’s issue of his Cabot Early Opportunities newsletter. It’s a stock with tremendous upside and momentum.

Details inside.

After more than three months of dictating every move on Wall Street, the Iran war finally headed toward the exits last week — the U.S. and Iran agreed to a framework to end the conflict, reopen the Strait of Hormuz, and lift the U.S. naval blockade, sending oil tumbling back toward the mid-$70s. The other headliner last week was new Fed Chair Kevin Warsh’s first meeting on Wednesday: The Fed held rates steady, but its updated projections flipped hawkish, with the median policymaker now penciling in a rate hike rather than a cut before year-end — a shift that knocked stocks lower midweek before a sharp Thursday rebound.

After more than three months of dictating every move on Wall Street, the Iran war finally headed toward the exits last week — the U.S. and Iran agreed to a framework to end the conflict, reopen the Strait of Hormuz, and lift the U.S. naval blockade, sending oil tumbling back toward the mid-$70s. The other headliner last week was new Fed Chair Kevin Warsh’s first meeting on Wednesday: The Fed held rates steady, but its updated projections flipped hawkish, with the median policymaker now penciling in a rate hike rather than a cut before year-end — a shift that knocked stocks lower midweek before a sharp Thursday rebound.

After more than three months of dictating every move on Wall Street, the Iran war finally headed toward the exits last week — the U.S. and Iran agreed to a framework to end the conflict, reopen the Strait of Hormuz, and lift the U.S. naval blockade, sending oil tumbling back toward the mid-$70s. The other headliner last week was new Fed Chair Kevin Warsh’s first meeting on Wednesday: The Fed held rates steady, but its updated projections flipped hawkish, with the median policymaker now penciling in a rate hike rather than a cut before year-end — a shift that knocked stocks lower midweek before a sharp Thursday rebound.

It was a better week for markets and Explorer stocks. GE Vernova (GEV) came to life this week, up 21%. Coeur Mining (CDE) shares rebounded this week, soaring 13.8% following a recent announcement that it will be added to the S&P MidCap 400 Index.

And new Fed chairman Kevin Warsh signaled yesterday that he is an inflation hawk. Overnight, the Bank of Japan raised interest rates to its highest level since 1995. Officials signaled more hikes ahead to combat too-high inflation.

But our bull market seems to confirm that rising interest rates do not matter much.

The June issue of Cabot Early Opportunities is focused on three companies benefiting from powerful structural growth trends that are still in the early innings.

Whether it’s a newly independent materials company gaining exposure to nuclear and AI demand, a critical power infrastructure provider solving bottlenecks in next-generation computing, or a semiconductor supplier riding a surge in testing complexity, these businesses are seeing improving fundamentals that continue to pull in fresh money.

All the details are in the June issue of Cabot Early Opportunities.

What a difference a week makes. After the prior Friday’s chip-driven rout, a volatile, headline-whipped week ultimately ended higher as growing optimism that a U.S.-Iran peace deal is finally within reach sent oil tumbling back toward $85 a barrel. And despite a modestly hot May inflation report and an Oracle-led wobble in AI names, by Friday the bulls had the upper hand as SpaceX pulled off the largest IPO in history.

June has been a return to form for stocks in 2026, with value outperforming growth the way it did in the first quarter before the April and May AI-fueled boom. This month, value stocks are up roughly 3% while the S&P 500 is down 2.5% and the Nasdaq is off more than 4%. That mimics the first-quarter outperformance by value stocks, which added 2.5% from January through March while the S&P and Nasdaq tumbled 4.5% and 7%, respectively.

The peace rally is again being overshadowed by more technology ugliness.

The selloff in artificial intelligence that began after Broadcom’s (AVGO) earnings at the beginning of the month is gaining steam early this week. Technology had been red-hot and lifted the market in April and May. Now, it’s spoiling the peace party.

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.

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.

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.

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.

[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.

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.

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.

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%.

Increased volume and rates pushed this railroad company’s second quarter earnings 17% higher.

Union Pacific (UNP)
from Richard C. Young’s Intelligence Report

Shipping via highway has become more difficult thanks to increased congestion, higher costs for fuel, shortages of drivers, and increased regulation of motor carriers. According to Intermodal Association of North America...

This hotel’s transition to a more upscale environment is paying off in rising sales and earnings. And we have an update on Ecolab, Inc., recommended in our October 2013 issue.

Marriott International Inc. (MAR)
from Blue Chip Growth

Marriott International Inc. (MAR) is a familiar name to travelers. The company’s properties cover the...

Sell: Ecolab (ECL)
Update from Investment Digest 750, October 28, 2013

Ecolab (ECL) has been on the Buy List just shy of ten months now, and during that time we have benefited from the company’s solid profit potential and its steady dividend. However, in recent weeks we’ve seen institutional buying pressure drop...

This South Korean bank is a powerhouse, but its shares are trading at just a bit more than 11 times earnings.

Shinhan Financial Group (SHG)
from Capitalist Times

Shinhan Financial Group (SHG) became one of South Korea’s four largest financial institutions after acquiring Choheung Bank in 2003 and LG Card in 2007.

With a...

Today’s 2014 Top Picks update is a biotech whose earnings estimates are trending up. This contributor has also increased his price target for the shares.

Pharmacyclics (PCYC)
from The Medical Technology Stock Letter

In January, Pharmacyclics (PCYC) released highly positive data from the RESONATE trial, the first Phase III study of Imbruvica in...

Today’s 2014 Top Picks update is a tech company whose shares were recently initiated as a Buy at Maxim Group.

Oracle (ORCL 40)
from Hendershot Investments

Oracle (ORCL) reported fiscal 2014 fourth quarter total revenues were up 3% to $11.3 billion with net income down 4% to $3.46 billion and EPS flat at...

Today’s 2014 Top Picks update places this contributor’s original Top Pick on Hold, and adds a new Top Pick whose shares were just initiated with a “Buy” rating by Nomura Securities.

Hold HomeAway (AWAY)
from Cabot Top Ten Trader

My top pick of HomeAway (AWAY) has continued to execute on its business plan,...

New Pick: Buy Restoration Hardware (RH)
from Cabot Top Ten Trader

Instead, I like Restoration Hardware (RH), which, after going private for a few years, came public in late-2012. It’s the go-to home furnishings provider for the well-to-do, and is revolutionizing the industry by moving away from mall stores and instead opening...

Today’s 2014 Top Picks update is a biotech company that just received FDA approval for its lead product for insulin therapy.

MannKind (MNKD)
from Nate’s Notes

Thanks to a favorable Advisory Panel meeting with the FDA back in April, and then a final approval for the company’s lead product, Afrezza (an inhalable form...

Today’s 2014 Top Picks update puts the original recommendation in buy/hold status and offers a new pick for the rest of the year.

Ubiquiti (UBNT)
from BI Research

Ubiquiti (UBNT) is truly a disruptive, R&D-focused, wireless networking company. 65% of employees are engineers who are hands-on and actually designing networking products. Its products...

Vertex (VTNR)

My current favorite for the second half of 2014 is Vertex (VTNR), a leading recycler and reprocessor of used motor oil (primarily) and other petroleum byproduct streams into higher value end products. These are then sold as feed stocks to other fuel blenders and re-refiners, or as replacement fuel...

Today’s 2014 Top Picks update is a hospitality Real Estate Investment Trust that has engineered a turnaround. The shares are up 20% since our Top Picks 2014 issue in January.

FelCor Lodging Trust (FCH)
from The Turnaround Letter

Our top pick for 2014 was FelCor Lodging Trust (FCH), a REIT that owns hotels...

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.