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Current Market Outlook


As the year winds to a close, nothing has changed with the market’s overall stance—big picture, it’s a bull market, and numerous factors tell us that the uptrend has farther to go; the odds favor higher prices when looking months down the road. Shorter-term, though, there are also many signs that tell us risk is elevated—that doesn’t necessarily mean a huge correction is on tap, but we think it’s safe to say that the next few weeks are likely to be more challenging than the past few weeks, with potholes, rotation and news-driven moves possible. As we’ve been writing, that’s no reason to bail out, but being discerning on the buy side (good entry points, starting small, etc.) and booking some partial profits makes sense.

Our last list of 2019 is a broad mix of strong stocks, including turnarounds, recent breakouts and fresh setups. Our Top Pick is Crocs (CROX), which is benefiting from some rotation into retail titles and a string of solid quarterly reports.

Stock Name	Price	Buy Range	Loss Limit
Bed Bath & Beyond (BBBY)	0.00	16-17	14.3-14.9
Cardlytics (CDLX)	0.00	58-61	51-52.5
Carvana (CVNA)	82.90	91-94	83-85
Crocs (CROX)	0.00	39-41	35.5-36.5
Floor & Décor (FND)	68.03	49-51	45.5-46.5
GSX Techedu (GSX)	97.59	19.5-20.5	17-18
Luckin Coffee (LK)	0.00	34-36.5	30-31.5
Paycom Software (PAYC)	0.00	257-267	237-241
Sea Limited (SE)	132.86	38-39.5	34-35
United Rentals, Inc. (URI)	0.00	163-167	150-152

The rotation into the year’s underperformers that started last week has continued, while taking on some aspects of a generic risk-on trade. Financial stocks have outperformed all others since our last update, and tech stocks are up again this week. Materials and industrials also continue to do well.

Macy’s (M) – With a capable new CEO since February 2018, Macy’s is aggressively overhauling its store base, cost structure and e-commerce strategy to adapt to the secular shift away from mall-based stores. Macy’s acceleration of its overhaul shows considerable promise.

Welcome news: The Fed holds interest rates steady in a sign tightening has peaked and that rates cuts may be coming in 2024. Big positive for stocks.

One of the Explorer’s themes is the exciting and potentially profitable sector of medicine and life sciences. A success story is Novo Nordisk (NVO), which is up about 45% this year. The Denmark-based company has been the talk of the pharma and medical world and even Hollywood with stars trying the firm’s diabetes and weight-loss medicines, Ozempic and Wegovy.

The market hasn’t completely changed character at this point, but the recent action suggests that we’re at a key juncture here: After testing its October high, the Nasdaq has been fading, dragging down most other indexes while the number of new lows has picked up right off the recent high, all while defensive areas perk up—though, we’re also seeing many growth stocks hang in there well, with a few testing new high ground. All told, we’re again leaving our Market Monitor at a level 7, but we think the next few days will tell the tale of whether some new leadership can emerge … or whether a more general corrective phase gets underway. Stay tuned.

This week’s list has lots of strong names, including a few early earnings winners. Our Top Pick has a solid aerospace story but, like other names in this issue, is moving into the AI power space with some big future deals. We think nibbling on some here or on a further pullback makes sense.

We’re going through a highly unusual period in the history of the stock market during which earnings estimates keep rising for a broad spectrum of companies. That’s because we’re experiencing a growing economy, deregulation and lower income tax rates, all of which contribute to rising corporate profits.

The bull market finally expanded to more than just a select few names last week, with small caps, Chinese stocks and other sectors finally getting some love. It’s a good sign for the rally’s longevity and could be a boon for our diverse portfolio. So today, we add another non-AI, non-tech stock that’s been attracting some overdue buying. It’s a big-name, resilient growth company whose stock consistently outperforms the market – and yet is undervalued at the moment. It’s a recommendation I just shared with my Cabot Value Investor readers, and today it joins our Stock of the Week portfolio.

Current Market Outlook


The market’s snapback in recent days has been impressive, with the Nasdaq toying with new-high ground, some other indexes popping back above their 50-day lines and many growth stocks acting much better. But not all is bright and sunny—there remain many divergences in the market, and the advance is extremely thin, with just one-third as many stocks hitting new highs today as during the Nasdaq’s initial run at this level in early July. Because the evidence has improved, we’re shifting our Market Monitor toward bullish territory, so you can put some sidelined cash to work, but we advise stepping back into the market slowly.

Regardless of the daily gyrations, we remain encouraged by the many growth stocks showing better action. Our Top Pick this week is LinkedIn (LNKD), a stock that still has resistance to chew through, but has turned the corner after getting cut in half.

Stock Name	Price	Buy Range	Loss Limit
YY Inc. (YY)	0.00	86-88	77-79
Western Refining (WNR)	0.00	43-45	40-41
Tata Motors Limited (TTM)	0.00	43-44.5	40-41
Tesla, Inc. (TSLA)	818.87	250-260	235-240
Medivation (MDVN)	0.00	82-85	77-78
LinkedIn Corporation (LNKD)	0.00	208-218	189-193
Jumei Holdings (JMEI)	0.00	36-38	33-34
Green Plains Energy (GPRE)	0.00	40-42	35.5-36.5
FleetCor Technologies (FLT)	0.00	140-146	132-134
Carter’s (CRI)	0.00	78-81	73-74

Current Market Outlook


Turkey’s currency crisis is the latest of what seems like a never-ending string of worries this year (volatility implosions, trade wars, rate hikes, etc.) that have hit the market to some extent. That said, we’re relatively encouraged by what we’ve seen during the past couple of weeks, with the major indexes holding and bouncing off important support, some new leadership emerging on earnings and other leading names forming solid bases. It’s still a tricky, narrow and choppy environment, which is a good reason to pick your spots, honor your stops and hold some cash. But we’re nudging our Market Monitor up another notch, as we see a healthy number of good-looking leading stocks and the market’s major trends remain up.

For the second week in a row, we have a growth-oriented list, a positive sign after the late-July selloff. Our Top Pick is Roku (ROKU), a very volatile name with a very big story. Keep it small, try to buy on dips and expect plenty of wiggles.

Stock Name	Price	Buy Range	Loss Limit
Alteryx (AYX)	132.78	51-54	44-46
Carvana (CVNA)	82.90	49-52	42-43.5
CF Industries (CF)	45.23	46.5-48.5	43-44
CyberArk (CYBR)	111.74	68-71	62-64
Match (MTCH)	0.00	47-49.5	43.5-45.5
Michael Kors Holdings Limited (KORS)	73.22	70-72.5	65-66.5
Roku, Inc. (ROKU)	150.46	53.5-56.5	47-49
Seattle Genetics (SGEN)	150.85	71-74	64.5-66.5
Teladoc, Inc. (TDOC)	127.95	67.5-71	59.5-62
Wingstop (WING)	121.52	58-60	53-54.5

Current Market Outlook


We’ve now seen four constructive weeks in a row for the overall market, not just because the major indexes are rallying, but also due to the amazing breadth during the advance (a good longer-term sign and indicative of a vacuum of selling pressure) and the action of individual stocks, a ton of which are setting up good-looking launching pads. That said, it’s not all peaches and cream—the intermediate-term trend is still on the fence (could turn up this week, but hasn’t quite yet), most indexes and stocks are below longer-term moving averages and, after four good weeks, some shakeouts and potholes (possibly on earnings) could emerge. Overall, we’re optimistic and are bumping up our Market Monitor to a level 6, but it’s best to step (not plunge) into stocks and keep looking for lower-risk entry points.

This week’s list contains another batch of great stories, with a variety of strong charts (some coming off lows, others at new highs, others setting up). Our Top Pick is Coupa Software (COUP), which is in a strong group and has seen superb buying volume in recent days.

Stock Name	Price	Buy Range	Loss Limit
Alarm.com (ALRM)	71.33	57-59	51.5-53
Bilibili (BILI)	28.71	15.5-17	13.5-14.5
Coupa Software (COUP)	262.20	73-77	64-67.5
Cronos Group (CRON)	17.62	13-14.5	10-11
HubSpot (HUBS)	582.89	148-153	135-138
Lending Tree (TREE)	411.51	275-285	253-259
LPL Financial Holdings (LPLA)	85.22	67.5-70	62-64
Novocure (NVCR)	0.00	43-46	38-39.5
Pinduoduo (PDD)	87.53	23.5-25.5	21-22
Veeva Systems (VEEV)	180.23	103-107	93-95

One stock moves from Hold to Buy, one moves from Hold to Sell, and we have earnings reports on five stocks.

Current Market Outlook


For many weeks, we’ve been writing that there’s more good than bad in the market, and indeed, while choppy, many names did work their way jadedly higher. But now the shoe is on the other foot: The intermediate-term trend is now down for the major indexes, and we’re starting to see more and more individual stocks follow suit. It’s not a complete disaster, and given the on-again, off-again environment of 2021, we’re not ruling anything out, including a turn back up in the days or weeks ahead. (Even now, we’re fine sticking with your strong, profitable stocks.) But after a couple of rounds of sharp distribution and some breakdowns among leading stocks, we think it’s simplest to say the onus is on the bulls—we need to see at least a few days of constructive action and some upside power in the indexes and individual stocks to conclude the sellers are losing control. We’re leaving our Market Monitor at a level 5 and, until proven otherwise, would play things cautiously with only small new positions, trailing stops and a decent chunk of cash.

This week’s list has an interesting crop of stocks, ranging from commodity to reopening to legitimate growth outfits. Our Top Pick is CF Industries (CF), which is emerging from a multi-month dead period with a lot of power; as with most names in this market, try to buy on weakness.

Stock Name	Price	Buy Range	Loss Limit
Affirm Holdings (AFRM)	108	105-111	89-92
SKIN (SKIN)	26	24.5-25.5	21.5-22
Caesars Entertainment Corp. (CZR)	118	113-117	102-104
CF Industries (CF)	61	58-61	51-53
ConocoPhillips (COP)	71	67-70	61-62.5
International Game Technology (IGT)	28	26-28	22.5-23.5
Live Nation Entertainment, Inc. (LYV)	98	95.5-98.5	87-88.5
Matador Resources Company (MTDR)	40	37-39	32.5-34
Palo Alto Networks (PANW)	470	457-472	417-427
Paycom Software (PAYC)	495	480-495	440-450

Just in case any of my subscribers wants to invest in energy companies, but feel bad that perhaps those companies are cheating America, there are three things I’d like to point out about ExxonMobil (XOM).

The bull market marches into a fourth year. On the heels of three straight years of double-digit gains, can the S&P 500 make it four in a row? Wall Street thinks it can come close, with the average predicted return among 21 analysts surveyed by Bloomberg coming it at 9% in 2026. And not one of those analysts thinks stocks will be down this year.

So to kick off the new year in style,let’s stay in growth mode by adding a new pick from Mike Cintolo in his Cabot Growth Investor newsletter.

Details inside.

In our final issue of 2025, we close out what has been another extremely profitable year for the market and the Stock of the Week portfolio by adding one more risk-on stock that will hopefully take flight in the new year. It’s a mid-cap nuclear energy play that was recently recommended by Tyler Laundon to his Cabot Early Opportunities audience. We will be back with our next issue in two weeks, on January 5, 2026. In the meantime, enjoy today’s issue – and Happy Holidays!

Stocks took a bit of a breather this week after weeks of positive gains fueled by tariff deals and pauses, sinking inflation and a very strong Q1 earnings season. Which way the market goes from here may depend on the headlines, but also on whether the bulls have the appetite for another big push to new highs. One area of the market we know is working? Precious metals. Gold has attracted most of the attention. But silver is starting to play catch-up. So today, we add a high-upside silver play via Cabot Explorer Chief Analyst Carl Delfeld.

Details inside.

The iShares EM Fund (EEM) has popped back above its 50-day line, which is a plus, but the Emerging Markets Timer remains basically neutral, having made no net progress over the past two months.

Oil stocks are being ignored by investors, but not by energy company executives who’ve been doing some major insider buying.