Issues
Despite two big potential market-moving events (NVDA earnings and PCE inflation data) the S&P 500, Dow and Nasdaq all finished the week mostly unchanged to marginally lower, while the Russell 2000 (IWM) rose marginally.
Despite two big potential market-moving events (NVDA earnings and PCE inflation data) the S&P 500, Dow and Nasdaq all finished the week mostly unchanged to marginally lower, while the Russell 2000 (IWM) rose marginally.
“Only the paranoid survive.” -Andy Grove
Nvidia (NVDA) met high expectations yesterday for the July quarter, hitting $46.7 billion in revenue, up 56% from the year-earlier period. However, it cautioned that third-quarter revenue growth will not be as impressive, disappointing analysts and investors.
Explorer stocks did not disappoint this week, with many of our positions posting solid gains. Coeur Mining (CDE) shares continue to outperform for us, up 8.9% this week, and Dutch Bros (BROS) shares were up a stellar 16.3%.
Nvidia (NVDA) met high expectations yesterday for the July quarter, hitting $46.7 billion in revenue, up 56% from the year-earlier period. However, it cautioned that third-quarter revenue growth will not be as impressive, disappointing analysts and investors.
Explorer stocks did not disappoint this week, with many of our positions posting solid gains. Coeur Mining (CDE) shares continue to outperform for us, up 8.9% this week, and Dutch Bros (BROS) shares were up a stellar 16.3%.
Cannabis investors continue to await action by the Trump administration on rescheduling, the next potential major catalyst for the group.
In an August 11 news conference, President Donald Trump said that he’s still considering the change and he will have a decision within a few weeks.
I believe Trump will follow through on his promise to reschedule, but this is not a 100% certainty. The most likely outcome, in my view, is that the Department of Justice will cancel a planned rescheduling hearing and issue a final rule with a public comment period.
In an August 11 news conference, President Donald Trump said that he’s still considering the change and he will have a decision within a few weeks.
I believe Trump will follow through on his promise to reschedule, but this is not a 100% certainty. The most likely outcome, in my view, is that the Department of Justice will cancel a planned rescheduling hearing and issue a final rule with a public comment period.
As you’ve probably surmised by now, I’m not the world’s biggest fan of buying stocks that are coming off fresh 52-week lows, preferring instead those that have carved out a decent bottoming pattern—both in terms of price and sentiment. Nor, for that matter, do I tend to favor buying stocks that are so far out of favor with investors that continued selling pressure is still an ever-present possibility.
But sometimes a stock becomes so cheap, so out of favor and so “wound up” with short interest and capitulation that the temptation to do some bottom fishing is simply too great to pass up. This is especially the case when the turnaround story is so compelling that it practically writes itself. Such is the case with this month’s featured recommendation, Helen of Troy (HELE).
But sometimes a stock becomes so cheap, so out of favor and so “wound up” with short interest and capitulation that the temptation to do some bottom fishing is simply too great to pass up. This is especially the case when the turnaround story is so compelling that it practically writes itself. Such is the case with this month’s featured recommendation, Helen of Troy (HELE).
What will sobered-up investors see after Labor Day when they start really paying attention again?
Although a September rate cut is largely priced into stocks, upcoming inflation and economic reports could change things. September could be a month when the AI rally is renewed and the Fed starts cutting rates, or a month where tech stocks retreat and the rate cut promise is pulled back. It’s a precarious market for stocks priced near the high.
Fortunately, there are several good stocks that are already well off the high. One area is those companies exposed to homebuying. Stubbornly high mortgage rates have held company stock prices down. But the longer-term trajectory for the homebuying market is fabulous. There is huge pent-up demand for homebuying that will ignite at some point. If rates come down in the months ahead, that ignition could occur sooner rather than later.
Several homebuilding company stocks have already spiked higher on the prospect of falling interest rates. In this issue, I highlight a title insurance company stock that has a long history of market outperformance. It is still priced well off the high, while the longer-term prospects are stellar, and it might be on the cusp of a breakout in the short term.
Although a September rate cut is largely priced into stocks, upcoming inflation and economic reports could change things. September could be a month when the AI rally is renewed and the Fed starts cutting rates, or a month where tech stocks retreat and the rate cut promise is pulled back. It’s a precarious market for stocks priced near the high.
Fortunately, there are several good stocks that are already well off the high. One area is those companies exposed to homebuying. Stubbornly high mortgage rates have held company stock prices down. But the longer-term trajectory for the homebuying market is fabulous. There is huge pent-up demand for homebuying that will ignite at some point. If rates come down in the months ahead, that ignition could occur sooner rather than later.
Several homebuilding company stocks have already spiked higher on the prospect of falling interest rates. In this issue, I highlight a title insurance company stock that has a long history of market outperformance. It is still priced well off the high, while the longer-term prospects are stellar, and it might be on the cusp of a breakout in the short term.
*Note: Your next issue of Cabot Profit Booster will arrive next Wednesday, September 3, due to the market holiday next Monday, September 1, in observance of Labor Day.
While it was a highly volatile week that included the AI story coming under intense pressure, buoyed by the Fed Chairman’s dovish speech on Friday the S&P 500 closed the week at a new all-time high. By week’s end the S&P 500 had gained 0.3%, the Dow had rallied 1.5% and the Nasdaq had fallen 0.6%.
While it was a highly volatile week that included the AI story coming under intense pressure, buoyed by the Fed Chairman’s dovish speech on Friday the S&P 500 closed the week at a new all-time high. By week’s end the S&P 500 had gained 0.3%, the Dow had rallied 1.5% and the Nasdaq had fallen 0.6%.
*Note: Your next issue of Cabot Top Ten Trader will arrive next Tuesday, September 2, due to the market holiday next Monday, September 1, in observance of Labor Day.
Ever since early July, the market has seen more and more bouts of rotation, and in the past two weeks, that action has accelerated, with more and more growth stocks getting hit while expectations for a Fed rate cut next month have goosed the broad market. So where do we stand overall? From a top-down perspective, the evidence has improved, but there’s also a lot of crosscurrents and leadership is in transition, which keeps things tricky. We’ll stick with our Market Monitor at a level 7 and see how things look after the coming long weekend.
This week’s list has a bunch of names from different groups, including many smaller titles, which goes hand in hand with what we’re seeing in the market. Our Top Pick had five (!) fakeouts in the past six months, this recent breakout look for real. Aim for modest dips and use a looser stop.
Ever since early July, the market has seen more and more bouts of rotation, and in the past two weeks, that action has accelerated, with more and more growth stocks getting hit while expectations for a Fed rate cut next month have goosed the broad market. So where do we stand overall? From a top-down perspective, the evidence has improved, but there’s also a lot of crosscurrents and leadership is in transition, which keeps things tricky. We’ll stick with our Market Monitor at a level 7 and see how things look after the coming long weekend.
This week’s list has a bunch of names from different groups, including many smaller titles, which goes hand in hand with what we’re seeing in the market. Our Top Pick had five (!) fakeouts in the past six months, this recent breakout look for real. Aim for modest dips and use a looser stop.
Jerome Powell was an unlikely hero to investors last week, reviving an increasingly sluggish market with his surprisingly dovish words from Jackson Hole last Friday. So stocks remain near record highs, and volatility is low, as the prospect of the Fed finally slashing interest rates again starting next month becomes increasingly realistic. Lower interest rates are particularly enticing for housing stocks, a beaten-down sector in the face of sky-high mortgage rates in recent years. So today, we add a high-profile homebuilder that’s starting to gather momentum – enough to catch the attention of Cabot Top Ten Trader Chief Analyst Mike Cintolo.
Details inside.
Details inside.
*Note: Your next issue of Cabot Options Trader will arrive next Tuesday, September 2 due to the market holiday next Monday, September 1 in observance of Labor Day.
While it was a highly volatile week, which saw the AI story come under intense pressure, buoyed by the Fed Chairman’s dovish speech on Friday the S&P 500 closed the week at a new all-time high. By week’s end the S&P 500 had gained 0.3%, the Dow had rallied 1.5% and the Nasdaq had fallen 0.6%.
While it was a highly volatile week, which saw the AI story come under intense pressure, buoyed by the Fed Chairman’s dovish speech on Friday the S&P 500 closed the week at a new all-time high. By week’s end the S&P 500 had gained 0.3%, the Dow had rallied 1.5% and the Nasdaq had fallen 0.6%.
*Note: Your next issue of Cabot Options Trader Pro will arrive next Tuesday, September 2 due to the market holiday next Monday, September 1 in observance of Labor Day.
While it was a highly volatile week, which saw the AI story come under intense pressure, buoyed by the Fed Chairman’s dovish speech on Friday the S&P 500 closed the week at a new all-time high. By week’s end the S&P 500 had gained 0.3%, the Dow had rallied 1.5% and the Nasdaq had fallen 0.6%.
While it was a highly volatile week, which saw the AI story come under intense pressure, buoyed by the Fed Chairman’s dovish speech on Friday the S&P 500 closed the week at a new all-time high. By week’s end the S&P 500 had gained 0.3%, the Dow had rallied 1.5% and the Nasdaq had fallen 0.6%.
It’s been a highly unusual market environment, with the overall market grinding slightly higher, but with growth stocks generally under pressure as more leaders crack or test key support. We continue to think great things will happen when looking out a few months, but we also have to deal with the here and now and have been shedding names as they act abnormally, giving us a cash position north of 50%. We’d prefer to have that lower, but are holding it tonight, waiting for at least some support to show up before putting some of it back to work.
Updates
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.
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.
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.
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.
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.
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.
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.
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.
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.
The S&P 600 Small Cap Index rose modestly this week but not quite to the 1,340 level the index reached on June 11.
We’re seeing what could be an early pattern of higher highs and higher lows for the index, though for that trend to firm up we need to see the index get closer to its 200-day line (currently at 1,367) in the next week or two, and not fall below 1,284.
We’re seeing what could be an early pattern of higher highs and higher lows for the index, though for that trend to firm up we need to see the index get closer to its 200-day line (currently at 1,367) in the next week or two, and not fall below 1,284.
Three years ago this month, I went to see my first movie in a theater since Covid. The film was Top Gun: Maverick, a movie that tapped into my 1980s nostalgia and was more entertaining and coherent than your average sequel. I wasn’t alone – the film grossed nearly $1.5 billion worldwide, making it the highest-grossing movie of Tom Cruise’s career, which is really saying something. Steven Spielberg thanked Cruise for “saving movie theaters.” He may have been right: In the two previous Covid-tainted years, 2020 and 2021, U.S. movie theaters grossed just over $6.5 billion combined – barely more than half of the industry’s 2018 peak of $11.89 billion.
Stocks have been impressively resilient. The market handled the Iran news like a trooper. Stocks have rallied since the U.S. bombing.
It seems like the default position of investors is optimism. Stocks seem to want to go higher and only go lower when they defy gravity. The market made up the tariff panic in short order. Rates have remained stubbornly high. The news from the Middle East is wild. Yet stocks are within bad-breath distance of the all-time high.
It seems like the default position of investors is optimism. Stocks seem to want to go higher and only go lower when they defy gravity. The market made up the tariff panic in short order. Rates have remained stubbornly high. The news from the Middle East is wild. Yet stocks are within bad-breath distance of the all-time high.
In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Alcoa (AA), Centuri Holdings (CTRI), Intel (INTC), Kenvue (KVUE), Paramount Global (PARA) and SLB Ltd. (SLB).
Alcoa (AA) is navigating tariff-related challenges relating to aluminum pricing and sourcing.
SLB Ltd. (SLB) is well positioned to benefit from anticipated oil and natural gas price increases arising from the Iran/Israel conflict.
Alcoa (AA) is navigating tariff-related challenges relating to aluminum pricing and sourcing.
SLB Ltd. (SLB) is well positioned to benefit from anticipated oil and natural gas price increases arising from the Iran/Israel conflict.
Alerts
Natural Grocers (NGVC) should have a decent day (+20% in early hours trading) after Q2 earnings beat expectations. Revenue grew 9.0% to $335.8 million (a $6.1 million beat) while GAAP EPS of $0.56 grew by 60%. Daily average comparable store sales grew by 8.9%. This was a very strong quarter.
Shares of Artivion (AORT) are up over 12% today after the company beat expectations in the first quarter. Revenue grew 1.6% (Q1 of last year was a monster quarter so a tough comparison) to $99 million versus expectations of $94.8 million while adjusted EPS of $0.06 beat expectations by $0.02.
Enovix (ENVX) reported Q1 results yesterday after the close that met revenue expectations with $5.1 million. Operating expenses rose in the quarter and will continue to do so into Q2 to support the ramp up to mass production and to prepare for higher production capacity at the newly acquired South Korean battery manufacturing plant.
This has been a difficult month with high levels of uncertainty.
The concurrent declines in the U.S. dollar and S&P 500 are part of a trend that has swept markets since the broad and steep tariffs were announced.
The concurrent declines in the U.S. dollar and S&P 500 are part of a trend that has swept markets since the broad and steep tariffs were announced.
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.
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.
While there have been some crazy moves in the market this week, it’s somewhat encouraging that, as of 12:00 PM ET, the broad market isn’t off that much compared to Friday’s close.
It’s been encouraging to see the market stabilize over the last two days (though yesterday was a crazy session).
Portfolios
Strategy
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.