A broad-based Republican victory in the election is spurring a sharp rally on Wall Street as investors bank on investor-friendly policies.


Bitcoin, the U.S. dollar, and gold also rose. It was reported that the gold reserves of Italy and France have risen in value by about $100 billion in the last two years. It is unusual historically for gold and the U.S. dollar to rise in tandem. Gold’s steady rise is also unusual given that traders would normally take profits along the way. U.S. economic sanctions have encouraged many to move into gold beyond the long reach of the U.S. government.



It is amazing how much money is being spent on politics. More than 11,000 political groups spent almost $15 billion to influence the election. Of course, this amount seems small weighed against a global economy of about $100 trillion, with the U.S. accounting for about $23 trillion (and about 35% of global debt).



It will be very interesting who gets the top economic policy posts and the GOP strategy going forward.

The election is over, a winner swiftly declared, and the Fed is set to cut rates again today. All of that is hugely bullish, as evidenced by the market hitting fresh all-time highs on Wednesday. But it’s even bigger news for small-cap stocks, which are historically overdue for a massive run. So today, we add a new small-cap stock whose name virtually everyone knows – and perhaps has indulged in themselves. That addition is part of a sweeping portfolio overhaul in our November issue, which includes two stocks reaching – actually eclipsing – our price targets, and our one true laggard getting the ax after a bad earnings report.

Lots to talk about today. Let’s get right to it.

Today we’re jumping into a small-cap recovery story that appears to be in its early innings. It’s a familiar name, and we’re not the first to jump on it. Bank of America just put out a very bullish note after the company posted a big earnings beat.

But this stock isn’t a consensus buy, far from it. There’s a lot of work to be done before Wall Street jumps on board. That spells opportunity.

I don’t think it’ll be a small-cap stock for long. Because of the crazy week with the election and FOMC meeting we will start with a half-sized position with today’s stock.

Today is finally election day, and how the market will react in the days to come is truly anyone’s guess. Because of this uncertainty, today’s covered call is a defensive play on a leading aluminum play that “should” do well under either candidate’s presidency.

It’s fair to say the evidence has taken a small step back in recent days because the intermediate-term trend of the major indexes is essentially on the fence, because the broad market has also faded somewhat, and because we’re finally seeing some earnings-induced dents in strong stocks. Of course, the election has finally (almost) arrived, which could easily cause some hecticness in the days ahead—but also remove some uncertainty. Put it all together and we’re still bullish, but we did pull in our Market Monitor to a level 7 and will take it as it comes in the days ahead.

This week’s list has a pretty solid growth component to it, which we do find encouraging. For our Top Pick, we’ll go with a zinger that has a great story and a powerful chart that we think can go far.

It’s election week, and it will be the elephant in the room for investors until a winner is declared. Will that be before the market opens on Wednesday, as in 2016? Will it take until this weekend, like it did in 2020? Or could this toss-up election drag out even longer, a la Bush/Gore in 2000? Either of the two former scenarios probably wouldn’t impact the market much. The latter would, at least for a time. So let’s all hope for a quick result. Sprinkle in the latest round of Fed cuts later in the week, plus more than a handful of earnings reports for Stock of the Week stocks, and it’s an incredibly pivotal week for the market.

With so much up in the air, today we add a relatively “safe” large-cap stock with a decent yield, low beta and impressive earnings growth. It’s been a staple of Tom Hutchinson’s Cabot Dividend Investor portfolio for quite some time.

Details inside.

Before I dive into my election preview, I first wanted to address Palantir (PLTR) earnings as the company will report its quarterly results today after the close.

Before I dive into my election preview, I first wanted to address Palantir (PLTR) earnings as the company will report its quarterly results today after the close.

The big picture for the market and for growth stocks remains very positive in our view, however, some near-term uncertainties and headwinds have kept us from doing much buying of late, and today saw the first real, widespread distribution in growth stocks since early September. Right now, then, we’re focused on managing our portfolio through earnings season, holding our strong names while jettisoning weak ones and looking to accumulate fresh leaders.

Tonight, we are selling one of our smaller positions that keeled over on earnings, and placing on other name on Hold--but we’re also sitting tight with our other strong, profitable names as we see what earnings season will bring.

Given that the majority of Americans on both the left and the right favor cannabis legalization, it’s no surprise that marijuana has emerged as a significant campaign issue.

Therefore, it makes sense to think about election outcome scenarios and what they mean for cannabis investors.

Big picture, no matter what happens in the presidential election, cannabis wins. That’s because both candidates support major cannabis reform in one way or another. But obviously, some outcomes are better than others. Here are the three main scenarios, from best to worst.

For much of the last four years, the “friendly skies” have been anything but for the airline industry and its customers. The restrictive measures of the Covid era put the entire $1.2 trillion air travel industry into a tailspin, causing massive financial losses and layoffs for the major carriers, not to mention major headaches for travelers.

The problems began in March 2020 and continued through that year, but by the start of 2021, industry-wide losses totaled over $35 billion, with no fewer than 64 airlines around the world ceasing operations. By the time Covid restrictions were lifted in 2023 (in the words of a contemporary CNN report), “A handful [of airlines] have revived after announcing bankruptcy, or changed names, but the vast majority are gone for good.”

Ahead of a monster week of economic data and earnings releases the S&P 500 fell 0.85%, the Dow lost 2.6%, and the Nasdaq gained 0.4%

It’s still a bull market and a rally. But the S&P has been in a sideways funk since the middle of last month.

April has not had news that the market seems to like. There has been stronger-than-expected economic news. The manufacturing numbers were the highest in about two years, and the Fed upgraded its 2024 GDP forecast from 1.4% to 2.4%. But sometimes good news is bad news.

The next earnings season starts very soon, with Mattel (MAT) set to report on Tuesday, April 23.

The first week in April was quiet for Explorer stocks. Looking at what sectors are doing particularly well through the MSCI World index, technology and other cyclical sectors such as energy have outperformed.

Where are the bargains? Consumer staples, Europe, and perhaps even electric vehicle stocks. The EV slowdown can’t be denied – their first-quarter growth rate was a weak 2.7% vs. last year’s 47%. Hybrids vehicles are clearly preferred by many, and on the rise.

It was a great first quarter. The S&P closed out March up 10% YTD. The index also rallied an impressive 28% from late October through the first quarter. Is there more upside ahead?

Things have been good. The Fed reiterated its intention to lower the Fed Funds rate three times this year at the March meeting. Meanwhile, inflation is way down and the economy is solid. Manufacturing data was much better than expected and the Fed raised its GDP forecast for 2024 from 1.4% to 2.4%.

The market looks great. The quarter ended last week with the S&P posting the strongest first-quarter start in five years. All three major market indexes have now risen for five straight months.

The Fed said it still intends to cut the Fed Funds rate three times this year at the March meeting. Meanwhile, inflation remains subdued, and the economy is surprisingly strong. Manufacturing data was much better than expected and the Fed raised its GDP forecast for 2024 from 1.4% to 2.4%.

In today’s note, we discuss the recent earnings reports from Walgreens Boots Alliance (WBA). Our note also includes the monthly Catalyst Report and a summary of the April edition of the Cabot Turnaround Letter, which was published on Wednesday.

The story of the week in the markets has been that central bankers are still leaning toward cutting rates by mid-year (odds still favor a cut in June). That’s helped stocks do pretty well, with outsized performance in energy, banks, insurers and homebuilders.

I’ve been monitoring the performance of small-cap sector ETFs versus those of the comparable large-cap offerings. It’s been interesting to see small-cap financials, materials and industrials performing far better.

WHAT TO DO NOW: Remain bullish, but continue taking things on a stock-by-stock basis. We’re seeing another round of sharp selling in many leading growth stocks today, though few (if any) have cracked meaningful support. To us, it’s another shot across the bow, not prompting any major moves but putting us on alert with certain names. In the Model Portfolio, we’re making one small move—selling 20% of our stake in CrowdStrike (CRWD)— while doing a quick flip on Celsius (CELH), placing it on Hold after last week’s half-position buy after today’s drop on news. Our cash position will now be 25%, and we’re keeping our eyes on a few names should the selling continue.

A bullet was dodged, and the bull market forges on.

It looks like the Fed is going to play ball. There was much worry among investors that the Fed would abandon the three-rate-hike goal for this year amid higher-than-expected inflation. But they didn’t. The Fed reiterated its intention for three cuts this year. The odds of a first cut in June increased to 70%.

It is with mixed emotions that I am writing my last Cabot Value Investor issue. My nearly four years as part of the Cabot team have been exceptionally rewarding. I have had the opportunity to work with an exceptional research team – who bring talent, dedication and investment results that readily match and likely exceed most Wall Street sell-side and buy-side analysts. Our Cabot analysts, despite their very different investing styles, have helped me become a better investor.

Earnings season is over, so there were no companies that reported earnings this past week. However, the next earnings season is just around the corner, starting with Walgreens Boots Alliance (WBA) on March 28.

Jerome Powell’s press conference yesterday, which followed the FOMC’s March policy decision (hold) and updated Summary of Economic Projections (SEP), went better than expected.

Many investors were primed for Powell to dial back expectations for three rate cuts later this year. Yet the SEP maintained that stance, which was set in the December SEP. That’s despite a slightly higher PCE inflation rate and GDP forecast than was expected three months ago.

In the Buffett’s Patient Investor portfolio, we currently own the TXN January 17, 2025, 135 call LEAPS contract at $53.05. You must own LEAPS in order to use this strategy.

After SPY’s historic, 8.9% rally in November (which resulted in a few subsequent losses), I want to sell a bear call spread in SPY going out to the January 19, 2024, expiration cycle. We continue to stick with the probabilities knowing that losing trades will come from time to time. We don’t play on the fringes of the bell curve. Anomalies will occur, and when they do, oftentimes when selling premium using a high-probability approach, losses follow. That’s understood. And that’s why we diversify the strategies (a.k.a. poor man’s covered calls) we employ. But when considering November saw the second-best November since 1980, behind only the pandemic-driven rebound in 2020, remaining disciplined to invest within “the curve” by using a high-probability approach is key.

We are recommending shares of CNH Industrial (CNHI) as a new Buy. The company is a major producer of agriculture (80% of sales) and construction (20% of sales) equipment for customers around the world and is the #2 ag equipment producer in North America (behind Deere). It also provides related supplies, services and financing.

In the Yale Endowment portfolio, we currently own the EEM January 17, 2025, 29 call LEAPS contract at $12.15. You must own LEAPS in order to use this strategy.

As part of the Income Wheel approach, we allowed our KO calls to expire in the money at expiration last week. As a result, our shares were “called” away at the price of 55.

AMGN is currently trading for 262.97.

We currently own the AAPL January 17, 2025, 135 call LEAPS contract at $48.00. You must own LEAPS in order to use this strategy.

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.

We have four remaining positions that are due to expire at the November 17, 2023 expiration cycle. So, let’s go ahead and buy our short calls back and immediately sell some more premium.

We currently own the JPM January 17, 2025, 100 call LEAPS contract at $46.20. You must own LEAPS in order to use this 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.