WHAT TO DO NOW: The market’s evidence remains unchanged, with a choppy, narrow and challenging environment. Many stocks are hanging in there, but there continue to be air pockets here and there, and our goal is to get out of names that are truly breaking down while holding (and possibly adding) resilient growth titles. Tonight, we’re going to sell PulteGroup (PHM), which hasn’t been able to bounce and cracked support today on a big rise in rates. Our cash position will be around 37%, which we’ll hold onto tonight but could put some back to work in the days ahead.
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The second half of the year is starting out the same as the first half ended—the big-cap indexes are up today (0.2% S&P 500, 0.7% Nasdaq), but pretty much every other index (broad market, equal-weight big-cap, growth) is flat to down.
Today’s bulletin is about PulteGroup (PHM), which has been weakening for some time—even when Treasury rates slipped in recent weeks—and today, support gave way as rates spiked. There is some support in the mid-100s that could save the day, but the consistent deterioration in homebuilders and PHM doesn’t bode well. We sold a chunk of shares many weeks ago and will take the rest of our modest profit off the table here. SELL
That will leave us with 37% in cash, which seems a bit high to us—we’re not going to buy just for buying’s sake, but it’s possible we’ll put some money back to work in the days ahead.
Don’t hesitate to email me directly at mike@cabotwealth.com with any questions.
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