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The Federal Reserve yesterday maintained its benchmark interest rate while leaving the door open for further action as officials work to bring inflation back to the central bank’s 2% target. This makes sense, though markets are still a bit on edge as further increases are a possibility.

But today, we take a big swing with an aggressive stock that combines biotech with artificial intelligence - and is trading well off its highs.

The Emerging Markets Timer is still pointed up, but it’s clearly seen some selling volume over the last week. So while we’re still bullish, we’re not looking to push for further exposure at this point. The only change in the portfolio is the sale of Telkom Indonesia (TLK) that we recommended in a Special Bulletin on Wednesday.

WHAT TO DO NOW: We continue to stay relatively close to shore as the major indexes remain rangebound and many stocks are hit and miss—but we are impressed given the resilience shown after some worrisome headlines, and earnings season has gone fairly well so far. Today and tonight, we’re making a few small moves: On the sell side, we sold one-third of our AppLovin (APP) stake today and, tonight, will sell half of our On Holding (ONON) position—but we’ll also buy an additional 3% position to Duolingo (DUOL) and start a half-sized stake in DoorDash (DASH). All told, we’ll still have a mid-40% cash position, but we could do more buying if the recent resilience leads to clear buying.

Current Market Outlook


From a top-down perspective (looking at the major indexes and overall trends), last week wasn’t a big deal—most indexes remain in their three-month trading ranges, and all of them are above their longer-term moving averages. But there’s no question that the sellers pulled out the bazooka on many high relative performance stocks, cracking many uptrends in the process. So, combined with the tedious trading during the past few weeks, we’re pulling in our horns a bit more by moving our Market Monitor down two notches to a level 4 out of 10. It’s still best to hold your resilient stocks, especially those that have reacted well to earnings (of which there are many). But you should also limit new buying and be holding plenty of cash until the market firms up.
This week’s list has another batch of earnings winners from last week; if the market can find its footing, many should do well going forward. If you’re looking to nibble on something, our Top Pick is ServiceNow (NOW), an emerging blue chip in the cloud software sector that has a huge runway of growth ahead of it.

Stock Name	Price	Buy Range	Loss Limit
Arch Coal (ARCH)	82.27	74-70	63-61
Cirrus Logic Inc. (CRUS)	0.00	54.5-52.5	50.5-49.5
Ellie Mae (ELLI)	0.00	105-102	98-97
Expedia Group (EXPE)	0.00	130-125	116-115
Mastercard Incorporated (MA)	0.00	107-105	101-100
New Oriental Education (EDU)	113.97	50-48	46-45
ServiceNow (NOW)	341.86	86.5-83.5	79-77.5
Tesaro (TSRO)	0.00	120-116	108-106
US Silica Holdings, Inc. (SLCA)	0.00	46-44	41-40
Western Digital Corporation (WDC)	0.00	59-56.5	52-51

Doximity (DOCS) Delivers

Sell OneStream (OS)

Hannan management was out with two updates this morning.

AST SpaceMobile (ASTS): Most Confusing Success Story Ever!?

Sell Magnite (MGNI)

MP Materials (MP), a rare earths mine and processor, is down about 11% this morning.

It was another interesting week for the market as the Nasdaq rallied 3.3%, while the S&P 500 added 1% and the Dow fell 0.6%. That is quite the performance difference between the Nasdaq and Dow!

The market took a jab to the face last week, but it still looks good. It’s still a strong market. But one that is showing some vulnerability.


After a great first half and a strong July, the market pulled back 2% last week, reversing most of the July gains. The culprit was a Biden administration announcement of new AI chip export restrictions to China. That news also combined with a perceived likelihood of a Trump presidency and the possibility of further trade frictions with China. The technology sector, and semiconductor stocks in particular, took it on the chin.

There isn’t much not to like about this market. After a strong first half of the year, the market is having a great July. And the rally is broadening out. It’s not just technology anymore.

Updates on all our stocks, no ratings changes, and 10 stocks that look likely to rise 5% in the near term.