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Stocks inched further into record territory this week. And while there’s another big news event to weather this week (the Fed’s Jackson Hole meeting and Jerome Powell press conference), the market has already motored ahead in the face of a bad July jobs report and escalating inflation. The real test is likely to come in September, historically the worst month for stocks as Wall Street returns from its summer vacation and sells off its laggards. So today, we add a bit of safety in the form of a low-beta, high-yield utility courtesy of Cabot Dividend Investor Chief Analyst Tom Hutchinson. But this utility acts more like a growth stock, thanks to AI and data center buildouts.

Details inside.

Stocks spent the holiday-shortened Thanksgiving week getting well and are again knocking on the door of all-time highs after a sharp pullback through most of November. Value stocks never retreated the way growth titles did, though, and are appearing more in favor by the day. That includes consumer staples, which are still undervalued despite recent momentum. In this month’s Cabot Value Investor issue, we add a once-prominent name from that group that trades at less than half its early-2025 highs – and yet the company never stopped growing. In fact, its sales are accelerating, making it a prime buy-low candidate.

Details inside.

For a second straight fall, the Federal Reserve has slashed interest rates three times from September through December. The result? What was a two-decade-high federal funds rate (5.25%-5.5%) 15 months ago is now down to a far more palatable 3.50-3.75% range. That’s still higher than at any point since before the Great Recession, so from a 21st-century perspective, interest rates aren’t exactly “low.” Usually, when interest rates are this high, stocks underperform their historical norm. In fact, prior to this recent stretch, it had only occurred two other times this century. Here were the results …

The bull market rolls on, with Jerome Powell and company only adding fuel to the buyers’ fire by affirming their intention to cut interest rates three more times this year. While the artificial intelligence hype cycle has slowed a bit, other sectors are starting to get noticed. One of them is MedTech. So today, we add a once-great MedTech stock that got slashed in half during the bear market of 2022 but has since climbed all the way back to new highs, thanks in part to a new product just approved by the FDA. It was enough to convince Tyler Laundon to add the stock to his Cabot Early Opportunities portfolio, and today we do the same.

Learn about conservative investing strategies that deliver you double-digit income to boost your retirement. Tom Hutchinson’s Dividend Multiplier Strategy will supercharge your income. If you’re attracted to the prospect of generating an extraordinary income stream in today’s tumultuous market—safely—this is the advisory for you.

Our plant-touching Cabot Cannabis Investor portfolio is up 29.2% since June 25. It is still down for the year. But it is performing better than the sector.

I believe it continues to make sense to stay long cannabis stocks, despite the big gains in the past month. Now, with the appointment of Terrance Cole to lead the Drug Enforcement Administration (DEA), cannabis investors are one step closer to learning how serious the Trump administration is about rescheduling cannabis.

Tuesday’s edition of The New York Times had a stock-centric article titled, “The S&P is Nearing a Record. Really.” The subtext, of course, is that stocks have climbed near February all-time highs despite a bevy of geopolitical tensions, potential economic landmines, and widespread investor and consumer pessimism. As I wrote last week, the market has fully recovered from its tariff-fueled cratering of late March and early April, but lingering uncertainties threaten to derail it at any moment … and that was before Israel and Iran started bombing each other.

In 2000 a small company began selling a proprietary surgical adhesive to seal up arteries. Over the next two decades that company would acquire several highly specialized products for patients undergoing heart surgery.

Today, the company is hitting its stride as surgeons and patients (and the FDA) see how much better its solutions are.

This month’s Issue has all the details.

The Board of Directors of Harman International Industries (HAR) has come to a definitive agreement with Samsung Electronics, in which Samsung will acquire Harman for $8 billion. Harman’s shareholders will receive $112 per share in cash. The deal is expected to close in mid-2017.

It remains pretty much the same story out there as we’ve seen for at least three weeks, if not longer. First, when it comes to the top-down evidence, it’s solid, with the intermediate-term trend of most everything pointed up; second, looking at things from a bottoms-up perspective, the evidence is encouraging, as many fresher breakouts have emerged in the past month or so; and third is more of a heads up, as near-term sentiment is very elevated and earnings season for most leading titles is ramping up, so some tricky trading (volatility, especially among extended stocks) is possible. Thus, we’re staying flexible, but given the overall positive vibes, are leaving our Market Monitor at a level 8.

This week’s list actually has many big-cap titles but there’s plenty for everyone. Our Top Pick appears to have finally left behind a multi-year consolidation after its Q3 report. Ideally you can get in on modest weakness if the market dips.

Last week was quiet, which keeps the overall evidence mostly unchanged—the indexes are hanging in there despite a rash of worrisome news, but there remain plenty of potholes and news- (and rumor-) driven action, including continued selling on strength. The question is whether Q1 reports will bring buyers out of their slumber and launch of bunch of fresh leaders higher. If so (given the hugely bearish sentiment out there), there could be tons of opportunities—but until it happens, it’s best to remain cautious. Once again we’ll leave our Market Monitor at a level 5.

This week’s list has does have a couple of recent earnings winners, and our Top Pick is one of them, gapping to new highs last week and leading what looks like a group move higher.

With mortgage rates leveling off and housing prices still elevated, here’s everything you need to know to confidently buy a new home in less-than-ideal conditions.

We’ve been writing for a few weeks that many secondary indicators were near levels normally associated with the market lows, so if something actually went right in the world, the market could respond powerfully—and we’re optimistic that process is now underway as interest rates have fallen off and the market popped beautifully last week. In response we’re bumping up our Market Monitor ... but only to a level 5 at this point, as the intermediate-term trend still isn’t up. Long story short: We’re OK throwing a couple more lines in the water, but we want to see constructive action from here (tame pullbacks, more breakouts, etc.) before turning truly bullish.

This week’s list has charts in a few different places (some coming off the lows, some near new highs, etc.), but a ton of them reacted well to earnings and most should do well if the market follows through on its rally. Our Top Pick is a stock that, after many months of tedious action, appears to be ready to resume its major upmove.

After a sharp correction in early April, the market posted a nice, but not powerful, rebound for four weeks but the past two weeks have definitely hurt the near-term evidence, whether you look at the overall market or leading stocks, where some abnormal action has appeared. There’s still more positive evidence than not, but at this point it’s very much a mixed bag, with some stocks acting fine, some coming under the gun and lots of up-and-down action. We’ll leave our Market Monitor at a level 7, but it’s vital to be in the right names and sectors.

This week’s list has many resilient names, including a few that have been out of the spotlight for a while. Our Top Pick is a small medical device outfit that, thanks to a good-sized acquisition of late, looks like a major player in the spinal surgery area, with new products and technology selling well.

Boost Your Profits in All Markets With Great Growth Stocks and Covered Calls. Jacob Mintz, Chief Analyst of Cabot Options Trader, Cabot Options Trader Pro, and the soon-to-be launched Cabot Profit Booster, and Chris Preston, Chief Analyst of Cabot Wealth Daily.

The Fed’s latest hawkish stance prompted an upside breakout in Treasury rates and a big late-week selloff in the stock market, with just about everything getting whacked. That action puts to bed the rally attempt from late August, of course, and reinforces our overall stance—the intermediate-term trend remains down, and with the broadening of selling pressure, we’re pulling our Market Monitor down to a level 5. To be fair, though, we’re not sticking our head in the sand: Yes, there are many worries, but the longer-term trend is still up and there’s plenty of evidence suggesting a resumption of the post-bear rally is coming at some point. Even so, it’s best to wait to see the bulls arrive first than to catch falling knives—right now, we advise holding plenty of cash.

While there aren’t many super-strong stocks out there, this week’s list has many that have taken the selling in stride thus far. Our Top Pick is helping to lead a group move that got underway a few weeks ago and could be starting its first pullback—further weakness would be tempting.

There are three changes to the portfolio today.

Interest rates are heading higher.

In normal and efficient markets, a strong economy and steeply rising prices would drive interest rates much higher. But rates have been held down and distorted by the Fed’s hyper-aggressive accommodation.



The Fed dismissed inflation in the early stages as “transitory” and now realizes it missed the boat and inflation is getting out of hand. Behind the curve and embarrassed, the Central Bankers will have to make up for lost time by reversing course, ending its bond buying program and raising the Fed Funds rate.



The main force preventing economic growth and rising prices from pushing interest rates higher is about to be removed, and perhaps quickly. Under the circumstances, it is quite reasonable to expect interest rates to move higher.



In this issue, I highlight an investment in the financial sector. Many companies in the sector benefit from higher rates as they earn higher spreads and profits. This company stands to benefit not only from higher interest rates but a change in consumer behavior as well.

There is overwhelming historical evidence that buying good stocks in bear markets is a highly successful long-term strategy. After all, it’s better to buy stocks cheap. And the market always trends higher over time. The truth is that buying stocks in a bear market is the most successful investment strategy ever devised.
Of course, the market may fall further before it recovers. You don’t have to pick one day and invest all your cash. You can trickle in over time. You can invest just a little right now. If the low is already in, you got a great price. If the market falls more, you put more money in later. Over time it will work out.


In this issue, I highlight a portfolio position in the technology sector. The sector plunged into a bear market before the S&P and will likely be one of the first sectors to lead the way back up. The sector was already down less than the overall market in last week’s tumult.

After a better than 30% plunge at record speed, the market has staged an epic rally from the bottom. The S&P 500 has moved more than 20% higher from the lows in late March. It is likely sensing an end to the economic shutdown sooner rather than later.
That’s good news, and the market usually gets it right. But even if the economy opens back up in May and June, there is a good chance of more trouble ahead. Terrible earnings and economic reports will come and consumers will be wounded for a while.


While I believe the economy and the markets will recover, there is a good chance of another down leg in the market. In this issue, I seek to take advantage of that possibility by targeting great companies to buy and below current prices. These are fantastic companies to own that are only ever cheap in bear markets like this.


The market will come back, but probably not yet. Taking advantage of another down move is a fantastic way to profit from the market’s eventual recovery.