Issues
As I do periodically over long holiday weekends, I stepped away from the “typical” Monday morning update and spent time with the family. Here is a shorter version of usual weekly update, focused entirely on our current open positions.
As I do periodically over long holiday weekends, I stepped away from the “typical” Monday morning update and spent time with the family. Here is a shorter version of usual weekly update, focused entirely on our current open positions.
The gold-silver ratio is an intimate relationship. It indicates how many ounces of silver are needed to buy one ounce of gold. In the last century, this ratio reached its lowest point at just under 15:1 at the end of 1979 and peaked at over 110:1 during the COVID crisis.
This year, we passed the 100:1 mark for only the fourth time in a hundred years – a strong signal that silver may be underpriced.
So today, we add an aggressive silver play to the Explorer portfolio as a bet that it will close the gap on gold.
This year, we passed the 100:1 mark for only the fourth time in a hundred years – a strong signal that silver may be underpriced.
So today, we add an aggressive silver play to the Explorer portfolio as a bet that it will close the gap on gold.
The stock market has perked up considerably since the Liberation Day turmoil in early April, igniting shares of stocks across the market cap spectrum.
We look under the hood of five names that span the risk spectrum this month, including a couple of old names that might be familiar and a new one that’s been hard to ignore.
We look under the hood of five names that span the risk spectrum this month, including a couple of old names that might be familiar and a new one that’s been hard to ignore.
*Note: Your next issue of Cabot Profit Booster will arrive next Wednesday, May 28 due to the market holiday next Monday, May 26 in observance of Memorial Day.
Sparked by positive trade developments, the stock market raced higher last week as the S&P 500 rallied 5%, the Dow gained 3.4%, and the Nasdaq added 6%.
Sparked by positive trade developments, the stock market raced higher last week as the S&P 500 rallied 5%, the Dow gained 3.4%, and the Nasdaq added 6%.
The evidence continues to take steps in the right direction, with most of the intermediate-term, top-down measures now pointing up and, after last week, more and more leadership-type names are beginning to perk up. Of course, the headline news from this weekend was the downgrade of U.S. debt, which could be used as an excuse to pull in some indexes and stocks that have had good runs … though today there wasn’t much of that at all. All told, we’re increasingly optimistic when it comes to the bigger picture, though we still want to see more fresh leaders emerge. We have our Market Monitor at a level 7.
This week’s list is a bit eclectic, with everything from earnings winners to earnings setups to news-driven names. Our Top Pick acts like an institutional leader and has the story and numbers to match.
This week’s list is a bit eclectic, with everything from earnings winners to earnings setups to news-driven names. Our Top Pick acts like an institutional leader and has the story and numbers to match.
The market is healthy again, or at least WAY healthier than it was a month ago, as tariff worries have faded, for now, and encouraging inflation and jobs data have helped restore investors’ faith in the U.S. market. Stock of the Week stocks have performed even better, as is often the case, led by the likes of Sea Limited (SE), Banco Santander (SAN), BYD (BYDDY) and old reliable, Tesla (TSLA). Today we add to our haul by striking while the iron is hot on growth stocks by recommending Mike Cintolo’s latest addition to his Cabot Growth Investor portfolio.
Details inside.
Details inside.
*Note: Your next issue of Cabot Options Trader Pro will arrive next Tuesday, May 27 due to the market holiday next Monday, May 26 in observance of Memorial Day.
Sparked by positive trade developments, the stock market raced higher last week as the S&P 500 rallied 5%, the Dow gained 3.4%, and the Nasdaq added 6%.
Sparked by positive trade developments, the stock market raced higher last week as the S&P 500 rallied 5%, the Dow gained 3.4%, and the Nasdaq added 6%.
*Note: Your next issue of Cabot Options Trader will arrive next Tuesday, May 27 due to the market holiday next Monday, May 26 in observance of Memorial Day.
Sparked by positive trade developments, the stock market raced higher last week as the S&P 500 rallied 5%, the Dow gained 3.4%, and the Nasdaq added 6%.
Sparked by positive trade developments, the stock market raced higher last week as the S&P 500 rallied 5%, the Dow gained 3.4%, and the Nasdaq added 6%.
From a top-down perspective, the market’s action over the past few weeks is about as good as you could have hoped for -- our Cabot Tides, Two-Second Indicator and Aggression Index have turned positive, and combined with the negative sentiment and blastoff-type indicators, we think the path of least resistance has turned up and solid gains are likely, at least when looking out many months.
The holdup is growth stock leadership, which has been tricky to this point, with many strong stocks getting hit while beaten-down names rally. That situation has improved some this week, but we want to see more fresh leadership kick off in the weeks ahead.
Still, we’ve reacted to the improvement in the evidence by making a few moves, some on the sell side (kicking out laggards), but a bunch on the buy side -- we still have 55% cash and are hoping to put some of that work if and as new leaders emerge. We review all our thoughts and some names we’re watching closely for purchase in tonight’s issue.
The holdup is growth stock leadership, which has been tricky to this point, with many strong stocks getting hit while beaten-down names rally. That situation has improved some this week, but we want to see more fresh leadership kick off in the weeks ahead.
Still, we’ve reacted to the improvement in the evidence by making a few moves, some on the sell side (kicking out laggards), but a bunch on the buy side -- we still have 55% cash and are hoping to put some of that work if and as new leaders emerge. We review all our thoughts and some names we’re watching closely for purchase in tonight’s issue.
Just a little over a month ago, stocks were crashing. But things are changing fast.
The tariff uncertainty has vastly improved with the announcement of trade deals with the U.K. and positive negotiations with China. The S&P has soared 22% from the intraday low on April 7. The index is now in positive territory YTD and within 5% of the all-time high. The technology-laden Nasdaq index is up 28% from the April low.
But the market tends to overreact in the near term. Tariff trouble isn’t over yet. There could still be setbacks. A negative headline can roil the market on any day. There’s also the economy. Growth is slowing. It may pick up or slow further. What will be waiting beyond the tariffs?
Fortunately, there is a trend to bank on that will thrive regardless of the near-term gyrations of the market or economy.
Artificial intelligence is a massive growth catalyst that will endure and thrive in any environment. It is a generational phenomenon that will drive certain stocks to huge gains. The dominant trend has sold down and consolidated in recent months. Such a move was overdue. But technology is coming back strong. It’s the hottest sector again.
In this issue, I highlight a goliath in the technology industry that is poised for a huge growth windfall from artificial intelligence in the years ahead. The stock has fallen far from the high. But the AI trend is revving up again and will likely transcend the current unpredictable environment.
The tariff uncertainty has vastly improved with the announcement of trade deals with the U.K. and positive negotiations with China. The S&P has soared 22% from the intraday low on April 7. The index is now in positive territory YTD and within 5% of the all-time high. The technology-laden Nasdaq index is up 28% from the April low.
But the market tends to overreact in the near term. Tariff trouble isn’t over yet. There could still be setbacks. A negative headline can roil the market on any day. There’s also the economy. Growth is slowing. It may pick up or slow further. What will be waiting beyond the tariffs?
Fortunately, there is a trend to bank on that will thrive regardless of the near-term gyrations of the market or economy.
Artificial intelligence is a massive growth catalyst that will endure and thrive in any environment. It is a generational phenomenon that will drive certain stocks to huge gains. The dominant trend has sold down and consolidated in recent months. Such a move was overdue. But technology is coming back strong. It’s the hottest sector again.
In this issue, I highlight a goliath in the technology industry that is poised for a huge growth windfall from artificial intelligence in the years ahead. The stock has fallen far from the high. But the AI trend is revving up again and will likely transcend the current unpredictable environment.
The Federal Reserve event came and passed without much volatility last week as stocks were mostly quiet. For the week, the S&P 500 fell 0.5%, the Dow lost 0.2%, and the Nasdaq declined by 0.3%. But yesterday’s 3% run-up in the S&P 500 and nearly 4% in the Nasdaq – fueled by a 90-day pause on U.S.-China tariffs – may have signaled a turning point for the market. Stay tuned.
Updates
The Trump Administration is off and running along with Cabot Explorer stocks as markets closely watch the potential for tariffs on Canada, China, and Mexico.
Mexico and Canada are America’s two largest trade partners, and both countries are bracing for major economic disruption should Trump follow through. Mexico and Canada send about 80% of their exports to the U.S. Market turbulence in stocks based in Mexico or Canada could create an opportunity for us.
Mexico and Canada are America’s two largest trade partners, and both countries are bracing for major economic disruption should Trump follow through. Mexico and Canada send about 80% of their exports to the U.S. Market turbulence in stocks based in Mexico or Canada could create an opportunity for us.
What a difference a week makes!
Early last week, things were looking pretty gloomy for the market, with stocks on a six-week losing streak dating back to early December and interest rates, as measured by the 10-year Treasury yield, stretching to 14-month highs. More than 300 stocks on the New York Stock Exchange and Nasdaq were trading at 52-week lows.
Early last week, things were looking pretty gloomy for the market, with stocks on a six-week losing streak dating back to early December and interest rates, as measured by the 10-year Treasury yield, stretching to 14-month highs. More than 300 stocks on the New York Stock Exchange and Nasdaq were trading at 52-week lows.
While the market news is inundated with Trump stories as he has issued a massive number of executive orders on his first day in office, the real market catalyst right now actually started last week.
There were a slew of executive orders affecting the energy industry but no real surprises. The improving story remains essentially the same since the election. There was likely some relief that large tariffs have not been announced, at least so far. But the Trump news is overshadowing last week’s market-altering news.
There were a slew of executive orders affecting the energy industry but no real surprises. The improving story remains essentially the same since the election. There was likely some relief that large tariffs have not been announced, at least so far. But the Trump news is overshadowing last week’s market-altering news.
A week ago, the market was teetering on the brink. But it teetered in the right direction.
The benchmark ten-year Treasury rate had soared above 4.8%, dangerously close to the late 2023 peak of about 5%. December CPI inflation was reported last week. A bad number could have thrust the 10-year rate above the peak, almost certainly prompting a selloff in stocks. But Wall Street was happy with the number and things went the other way.
The benchmark ten-year Treasury rate had soared above 4.8%, dangerously close to the late 2023 peak of about 5%. December CPI inflation was reported last week. A bad number could have thrust the 10-year rate above the peak, almost certainly prompting a selloff in stocks. But Wall Street was happy with the number and things went the other way.
In today’s note, we discuss pertinent developments and ratings changes for some of the stocks in the portfolio, including Alcoa (AA), Atlassian (TEAM), GE Aerospace (GE), SLB Ltd. (SLB), Starbucks (SBUX), Super Hi International Holding (HDL) and Teladoc Health (TDOC).
The market’s trends were looking pretty iffy until better-than-feared inflation data came out on Tuesday (PPI) and Wednesday (CPI).
Those data releases finally gave Treasuries a boost and knocked the 10-year yield down from last week’s level of 4.8%, which was the highest since November of 2023 (the 10-year yield hit 4.74% last April, which was close, but not quite as high as last week).
Those data releases finally gave Treasuries a boost and knocked the 10-year yield down from last week’s level of 4.8%, which was the highest since November of 2023 (the 10-year yield hit 4.74% last April, which was close, but not quite as high as last week).
WHAT TO DO NOW: Remain cautious but stay alert. The five-week drubbing for the broad market and many growth titles has caused sentiment to really drop (a good thing), and this week’s bounce (as interest rates dipped) is intriguing … but at this point, we’ve seen one decent day of action after five tough weeks, so we’ll stand pat with our large (60%-ish) cash position and watch closely to see how this rally develops.
Fourth-quarter earnings season is underway, and while expectations are high at an estimated 11.9% average year-over-year growth among S&P 500 companies, according to data collected by Factset, the actual numbers probably won’t matter much to the market’s short- and intermediate-term direction.
Ignore inflation numbers too. CPI and PPI – this week’s dual reports of the December results – were encouragingly cooler than expected. But in the end, what really matters is how they impact the Fed’s decision-making, which we probably won’t know until at least the end of the month.
Ignore inflation numbers too. CPI and PPI – this week’s dual reports of the December results – were encouragingly cooler than expected. But in the end, what really matters is how they impact the Fed’s decision-making, which we probably won’t know until at least the end of the month.
Things are getting dicey in the market.
The problem is interest rates. Growth expectations are strong following the election. At the same time, inflation has been sticky and not moving lower. Investors were already expecting higher rates for longer when they got a gut punch with last week’s strong jobs report.
The problem is interest rates. Growth expectations are strong following the election. At the same time, inflation has been sticky and not moving lower. Investors were already expecting higher rates for longer when they got a gut punch with last week’s strong jobs report.
Uh oh. The rally is in trouble.
The market sort of wobbled into January after a rough December. It started good but things turned a little ugly last week after a better-than-expected jobs report and worries about sticky inflation.
The market sort of wobbled into January after a rough December. It started good but things turned a little ugly last week after a better-than-expected jobs report and worries about sticky inflation.
In today’s note, we discuss pertinent developments and institutional ratings changes for some of the stocks in the portfolio, including Agnico Eagle Mines (AEM), Alcoa (AA), American Airlines (AAL), Atlassian (TEAM) and Toast Inc. (TOST).
Markets were closed yesterday in honor of the late President Jimmy Carter.
No matter your politics, the service was well done and inspirational.
It was a solid opening this first week of 2025: new recommendation American Superconductor (AMSC) shares were up 10%, Centrus Energy (LEU) shares were up about 8%, Cloudflare (NET) shares were up 7.5%, and Dutch Bros (BROS) shares were up 7.3%.
No matter your politics, the service was well done and inspirational.
It was a solid opening this first week of 2025: new recommendation American Superconductor (AMSC) shares were up 10%, Centrus Energy (LEU) shares were up about 8%, Cloudflare (NET) shares were up 7.5%, and Dutch Bros (BROS) shares were up 7.3%.
Alerts
Back on August 28 after the close, I shared bullish commentary on the cannabis group which was melting down at the time.
Yesterday we learned that the Drug Enforcement Agency (DEA) has decided to hold an administrative law judge (ALJ) hearing on rescheduling cannabis. It is set for December 2.
The decision dashes all hopes of rescheduling before the election, sending cannabis stocks much lower.
The decision dashes all hopes of rescheduling before the election, sending cannabis stocks much lower.
Artivion (AORT) Delivers Q2 Beat; Sell Remaining Half of EverQuote (EVER)
Quick Takes: Vertex (VERX), Rivian (RIVN), Apple (AAPL) and Modine (MOD)
EverQuote (EVER) and RxSight (RXST) Deliver; FTAI Infrastructure (FIP) Still a Buy
Portfolios
An updated portfolio for Cabot Options Institute – Fundamentals Portfolio.
An updated portfolio for Cabot Options Institute – Earnings Trader.
An updated portfolio for Cabot Options Institute – Fundamentals Portfolio.
An updated portfolio for Cabot Options Institute – Quant Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Earnings Trader.
An updated portfolio for Cabot Options Institute – Fundamentals Portfolio.
An updated portfolio for Cabot Options Institute – Income Trader.
An updated portfolio for Cabot Options Institute – Quant Trader.
An updated portfolio for Cabot Options Institute – Fundamentals Portfolio.
An updated portfolio for Cabot Options Institute – Earnings Trader.
An updated portfolio for Cabot Options Institute – Income Trader.
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.