After a weekend that many feared would sink the market as the Middle East situation was flaring up, to the surprise of many, the market didn’t sell off and, in fact, by week’s end the S&P 500 had gained 3.4%, the Dow had rallied 3.8% and the Nasdaq added 4.2%.

Even as worries fade over the recent Middle East flare-up, new tariff-related headlines have lately crept back into the news. However, stocks have taken it in stride by ignoring what would normally be “bad” news. In view of this, we’re pleased with the market’s resilience—and it’s also welcome that it hasn’t become overheated with too much enthusiasm yet. We’re still seeing a few flies here and there, with some stocks having trouble breaking above resistance, but a growing number of stocks are joining the parade, with a nice mixture of growthy and cyclical names getting into sync with the general march forward. All told, we like what we’re seeing, and in view of the continued strength, we’re raising our Market Monitor to a level 8.

This week’s list features names across multiple industries, which we view as a sign that categorical strength is building. Our Top Pick is a sporting goods giant that has multiple growth tailwinds and is tightening up as the 25-day line has caught up. We’re fine entering here or (preferably) on a dip.

Chaos was the overriding theme of the first half of 2025. But for all the pearl-clutching over tariffs, Middle East conflict, slowing economic growth and still-high interest rates, the S&P 500 was up 5% and has risen to new all-time highs. Stocks have truly climbed the proverbial “Wall of Worry.” Will they continue to? I wouldn’t bet against it. So today, we add a once-great large-cap tech stock name that may finally be ready to dig out of a years-long funk. Clif Droke identified it as a prime turnaround candidate in his Cabot Turnaround Letter. Now, we add it to the Stock of the Week portfolio.

Details inside.

After a weekend that many feared would sink the market as the Middle East situation was flaring up, to the surprise of many, the market didn’t sell off and in fact by week’s end the S&P 500 had gained 3.4%, the Dow had rallied 3.8% and the Nasdaq added 4.2%.

After a weekend that many feared would sink the market as the Middle East situation was flaring up, to the surprise of many, the market didn’t sell off and in fact by week’s end the S&P 500 had gained 3.4%, the Dow had rallied 3.8% and the Nasdaq added 4.2%.

As we wind up the first half of the year, the market has a great setup in place—in fact, it’s looking like that’s what’s been going on for the past six or seven months, with the big-cap indexes etching their own launching pads. Combined with some big-picture positives (like still-dour sentiment), we continue to think the next big move is up. And, while it’s not completely decisive, we’re finally starting to see some growth stocks perk up, too. Thus, we’re taking another step into the market’s waters tonight, adding one new small position and averaging up on a current holding.

Cannabis stocks remain out of favor. It has been a long wait, but it is still too soon to give up on key federal reform that could help the sector and boost stocks. That’s the view of a top-five cannabis company CEO.

Meanwhile, states continue to make steady progress on legalization.

None of this should be a surprise. Polls consistently show that a majority of voters favor legalization. Many politicians at both the state and national levels are responding. Beyond polls, we see growing support for cannabis in consumer spending trends. Wallet share continues to rise. I provide more details on these trends below in the news roundup section.

Few things are more enduring than America’s love of a good hamburger. Indeed, the iconic sandwich is so much a part of the country’s pop cultural heritage that, according to numerous opinion polls, it’s one of the first things foreigners mention when asked to name the most American symbol they can think of.

Stocks have been very resilient. The market has proven a lot of naysayers wrong. But prices are high, and uncertainty abounds.

Tariffs won’t be a disaster, but there will still be more headlines and uncertainty in the months ahead. The economy is okay, but it’s not great. Interest rates are still stubbornly high. And now the Iran conflict is thrown into the mix along with the tariffs and the economy. Meanwhile, the market indexes are hovering near the high and most stocks are pricey.

Several portfolio positions have had strong rallies in the recovery and are generating high call premiums. The high strike prices guarantee a strong total return if the stocks are called. The high premiums provide a great way to lock in the recent market good fortune by generating a high income from call premiums.

Let’s take what the market is giving. Right now, it’s giving a high income. Tomorrow, who knows? In this issue, I highlight a covered call in Qualcomm (QCOM). It is the sixth call sold on the position since the stock was added to the portfolio four years ago. It’s a great time to prime the pump for income once again.

The worries in the Middle East have continued to move markets in the last week, and despite some worrisome moments as well as signs of hope, the markets are little changed since we last wrote. The S&P 500 fell 0.2%, the Dow was virtually unchanged and the Nasdaq eked out a small gain.

The Middle East uncertainties came to the forefront just over a week ago, and that uncertainty flared up further this weekend with the U.S. joining the fray on Saturday night. Even so, stocks have remained resilient, with all of the indexes remaining in intermediate-term uptrends and not far from their recent highs, and there’s been very little abnormal action among individual stocks even after their big runs in May. That’s all to the good—but, at the same time, nothing has changed for the better, as very few stocks are reaching new high ground and there hasn’t been much net progress for the past month, even in many leaders. We’ll leave our Market Monitor at a level 7.

This week’s list has names from every nook and cranny in the market, which is a good sign. Our Top Pick is a real leader but has rested a bit during the past couple of weeks as the 25-day line has caught up. We’re OK entering here or (preferably) on dips.

Stocks continue to hold the line, even as the dual tidal waves of America’s involvement in the Iran-Israel conflict and the fast-approaching tariff deadlines threaten to submerge everything. Until that happens, though, we should invest in the market in front of us, not the one we think could materialize. And so today, that means going back to the growth well and adding a medium-sized software offering from Cabot Early Opportunities Chief Analyst Tyler Laundon to the portfolio.

Details inside.

In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Agnico Eagle Mines (AEM), Alcoa (AA), Kenvue (KVUE), Pan American Silver (PAAS), Sirius XM Holdings (SIRI) and Toast (TOST).

Precious metals miners Agnico Eagle Mines (AEM) and Pan American Silver (PAAS) continue to lead the portfolio after making yet another series of new highs this week.

The big macro development of the week is that the Fed is in no rush to rescue the market or the economy.

Speaking yesterday at the Economic Club of Chicago, Fed Chair Jerome Powell sounded a hawkish tune. While he acknowledged that the level of tariff increases announced on Liberation Day is much higher that what was expected, and will likely lead to higher inflation and slower growth (i.e. the dreaded stagflation), he said the Fed is well positioned to wait for greater clarity before considering any adjustments to policy.

As markets weigh tariff and trade risks, we will continue our efforts to protect assets through portfolio rebalancing while remaining alert to trading opportunities. Our diversified and global Explorer stocks are doing well.

International investors will be important at the margin since they account for 18% of U.S. stock ownership.

The retreat of the U.S. dollar, down 10% in the last six months, and the emerging premium for U.S. bond markets is leading to higher yields (interest rates).

Regardless of your politics, “calm” is not a word you would likely use to describe the stock market under President Trump, at least through the first three months of his second term. But given the extreme tariff-fueled volatility that pervaded this time a week ago, that’s exactly how the last week has felt for investors: calm.

The market has recovered in a big and fast way over the past week. Are we out of the woods?


What a difference a week makes. Things were frog ugly at the beginning of last week. We were approaching a trade war with the whole world. The S&P 500 came within a whisker of bear market territory (down 20% or more from the high on a closing basis). In fact, it hit the 20% mark down from the high on an intraday basis twice. Then last Wednesday happened.

The market got a reprieve last week. But we’re probably not out of the woods yet.

The S&P 500 came about as close to a bear market as you can get early last week. In fact, it hit the 20% mark down from the high on an intraday basis twice. But it’s not an official bear market until the closing price falls below 20%. The S&P seemed to have one foot on a bear market and the other foot on a banana peel. Then last Wednesday happened.

In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Agnico Eagle Mines (AEM), Centuri Holdings (CTRI), GE Aerospace (GE), Paramount Global (PARA), SLB Ltd. (SLB), Teladoc Health (TDOC) and UiPath (PATH).

Gold miner Agnico Eagle Mines (AEM) continues to lead the portfolio after making a new record high on Thursday.

The U.S. natural gas outlook should prove supportive for SLB Ltd. (SLB).

WHAT TO DO NOW: Remain defensive, but keep your eyes open. Yesterday’s rally was noteworthy and may have started (or will soon start) a process of repairing the damage from the recent selling. That said, the market’s trends are still down and few stocks are in great shape, so the odds favor the repair process taking some time. Of course, we’re flexible, so if the buyers go wild, we’ll act, but tonight we’re again standing pat and seeing how this bounce plays out. Our cash position remains near 87%.

Where to begin.

Let’s start here. I think the idea that the Trump administration had a perfectly executed strategy that included tanking the global equity markets and sending the bond market into utter chaos, to get to the point of announcing 10% tariffs across the board as a major “win,” excluding China, is a stretch.

There have been plenty of market meltdowns over the years. Few have matched what’s happened since last Wednesday evening – so-called “Liberation Day” – when President Trump announced plans to place high tariffs on … the rest of the world. In the week that followed, stocks nose-dived by 13%, with both the Nasdaq and Russell 2000 swinging to a bear market last Thursday and Friday and the S&P 500 nearly following suit.

Until yesterday.

It’s time to buy stocks more aggressively.

That’s the case for stocks in general, but also cannabis stocks. Most cannabis companies aren’t really affected by tariffs. But their stocks have been hit recently by the shift to “risk-off” mode among investors.

It’s a disaster. There was a range of possibilities with the tariffs. The market’s worst fears came to fruition and the S&P crashed more than 5% on consecutive days for the first time since the onset of the pandemic.

Last week the Trump administration announced reciprocal tariffs on just about every nation that trades with the U.S. The tariffs were widespread and severe in many cases. That wasn’t what the market wanted. The S&P is now within a whisker of an official bear market (down 20% from the high on a closing basis). The technology-laden Nasdaq is already there.

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.

FTAI Aviation (FTAI) Short Report

WHAT TO DO NOW: The market is again mixed today, with the major indexes holding their own—but the under-the-surface action remains very hit-and-miss among growth stocks. Today’s bulletin concerns Palantir (PLTR), which has been churning for many weeks and is now starting to slip. It’s not a death knell, but we’re going to trim here, selling one-third of our remaining shares in the stock.

Enovix (ENVX) Pops After Achieving Milestones

WHAT TO DO NOW: Happily, the year is off to a generally good start, but the situation remains tricky, with the market’s intermediate-term trends neutral-to-negative and with the early January effect (tons of volatility among individual stocks) being seen in many names. Today’s bulletin is regarding Axon Enterprises (AXON), which has been a solid winner for us but has been losing ground for a few weeks and today is cracking support on big volume. We’ll sell our remaining shares, taking the rest of our profit off the table. Details below.

Perpetua Resources (PPTA) Gets Green Light

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.