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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.

This week I’m in Cebu, Philippines. While in a shopping mall I spent a couple of hours analyzing a fascinating situation whereby Samsung, Apple and Huawei stores were right next to each other.

I’m not technically proficient enough to tell you which company and product offer the best value, but Huawei’s lower end smartphone was only $450 and seemed to offer everything anyone would need. Its high-end leader was just slightly cheaper relative to Apple’s most recent model, with all the bells and whistles. The store was very polished and in no way seemed to be of lesser quality to Apple or Samsung.

While Nvidia (NVDA) has pulled back more than 20% over the past two weeks, our conservative AI play IBM (IBM) has tacked on 40 points over the same period- hitting an all-time high early this week.

Cloudflare (NET) shares were up again this week and are now up 28% in 2025 to reach 140.

Dutch Bros (BROS) shares rose 8.5% this week and have surged 23% so far in 2025.

Tech stocks steadied a bit this week as quarterly earnings started coming in. Sea (SE) was up this week on two analyst upgrades. Super Micro (SMCI) will report crucial quarterly earnings early next week.

The Explorer’s one current European stock recommendation is Danish drugmaker Novo Nordisk (NVO). It has passed French luxury group LVMH Moët Hennessy Louis Vuitton to become Europe’s most valuable company.

The gold-silver ratio is an intimate relationship. It indicates how many ounces of silver are needed to buy one ounce of gold. In the last century, this ratio reached its lowest point at just under 15:1 at the end of 1979 and peaked at over 110:1 during the COVID crisis.

This year, we passed the 100:1 mark for only the fourth time in a hundred years – a strong signal that silver may be underpriced.

So today, we add an aggressive silver play to the Explorer portfolio as a bet that it will close the gap on gold.

The market continued its strong rebound from its early-April lows as the indexes rose all five days last week. The S&P 500 gained 2.9%, the Dow rallied 3% and the Nasdaq advanced by 3.4%.

The S&P 600 Small Cap Index has drifted a little lower this week but made a nice move over the last month as interest rates declined. The S&P 600 iShares ETF (IJR) is up 7% over the last five weeks.

The chart inside shows how clear the inverse relationship between the IJR (green line) and the 10-year yield (blue line) is.

Tax-free bond funds yield peanuts these days, so if you’re trying to actually grow your money, there’s only one sensible course.

Explorer stocks gained ground this week as market sentiment improved along with the odds of a Fed rate cut this fall.

I’ve been encouraging you to lighten up on some of the Magnificent Seven stocks over the last month or so. In just the last two weeks, these stocks have lost over $1.6 trillion in market value as market enthusiasm has waned and insiders have sold some stock.

What’s behind this trend?

Here are three possible reasons why big tech is facing a tough market.

If you had invested exclusively in the S&P 500 ETF (SPY) last year, you would have finished the year down 0.81%. But if you had applied the very basic options strategy called a Buy-Write, you would have easily beaten those results.

The market remains in good health, so I continue to recommend that you be heavily invested in a diversified portfolio of the best stocks, both strong momentum stocks (we have several) and lower-risk dividend-paying slower growers. In the portfolio this week, the only change is an upgrade of Vertex Pharmaceuticals (VRTX) to buy.

As for the newest recommendation, it’s unusual in that it’s not one stock; it’s actually an ETF of a market sector that I think holds spectacular promise in the long term.

The market’s resilience in the face of bad headlines (tariffs, higher inflation, an increasingly cautious Fed, etc.) continues to impress. And with the major indexes currently trading near their 2025 highs despite all the outside attempts to derail them, perhaps the next big market move will be up. With that in mind, today we add to our growth stockpile in the form of a former market (and Cabot) darling that was recently recommended by Mike Cintolo to his Cabot Growth Investor audience. After a rough stretch in mid-2024, the stock is soaring again.

Details inside.

This note includes our review of earnings from Wells Fargo (WFC) and our ratings change from yesterday for Credit Suisse (CS) from Buy to Sell.

Next week, Mattel (MAT) and Nokia (NOK) report earnings, followed by the earnings deluge which starts the week of July 25^th when 13 companies report.

The Cabot Turnaround Letter is traveling this week, so we will not be including a podcast in this update.

Current Market Outlook


The market’s two-plus-week rally hit a wall last week, with the major indexes suffering three days in a row of distribution (higher volume selling), that caused most to fall back below their 50-day lines. That’s reason enough to remain relatively cautious—we’re keeping our Market Monitor in neutral territory. On the flip side, though, is the action of leading stocks, a ton of which are actually pushing higher despite the market’s wobbles! Of course, good-looking stocks can go bad in a hurry in a bad market, but there’s no question this broad resilience (including a slew of solid earnings reactions) is very encouraging. Our thought is to pick up a few shares of some potential winners of the next leg up, but because of the market, do so in small amounts, while continuing to hold a chunk of cash on the sideline.

This week’s list is chock-full of strong growth stocks (and a couple of old world stocks, too). It’s hard to narrow down our choice to just one, but we’re going with Proofpoint (PFPT), which looks like a mid-cap leader in the newly strong cybersecurity group.

Stock Name	Price	Buy Range	Loss Limit
Coupa Software (COUP)	262.20	44-46	39-40.5
Etsy (ETSY)	112.97	22.5-25.5	21-22.5
Lumentum (LITE)	87.00	61-64	55-57
MercadoLibre, Inc. (MELI)	980.83	375-395	345-355
The New York Times Company (NYT)	0.00	23-24.5	21-22
Proofpoint (PFPT)	113.79	110-114	100-103
Salesforce.com (CRM)	0.00	117-121	108-111
Splunk (SPLK)	207.67	98-102	90-92
United States Steel Corporation (X)	0.00	42.5-45.5	37-39
Veeva Systems (VEEV)	180.23	72-76	65-67.5

Today’s new addition is an emerging MedTech company that’s developed a whole-organ therapy system to treat liver-dominant cancers.

These are very difficult-to-treat cancers where survival rates are low. But this company’s system, which was just approved for its first indication last summer, is improving the odds.

It’s an exciting story, both from a treatment and investment perspective.

Explorer stocks are either steady or performing well with Dutch Bros (BROS) shares up 18.4% during the last two weeks and Luckin Coffee (LKNCY) shares jumping 9.4% this week after a strong first quarter with 41% year-over-year revenue growth.

In addition, Singapore’s Sea Limited (SE) shares are up 18.6% during the last two weeks, and Spain’s Banco Santander (SAN) shares have surged 73% so far in 2025. China’s BYD (BYDDY) shares are up 53% in 2025. New silver and gold play Coeur Mining (CDE) shares were up 13.5% in their first two weeks in the portfolio.

I am in Singapore this week as U.S. markets and Explorer recommendations struggle a bit.

I had a chance to visit three Luckin Coffee shops in Singapore. Hard to draw conclusions from this small sample but all three seemed very professional and fully automated with no cash accepted resulting in no lines at all. Spoke with maybe a dozen customers who like the ease of use, variety of flavors, and the price. Several said they also go to Starbucks. One only needs to download the Luckin app to get service which locks in customers to receiving a stream of deals and incentives.

Centrus Energy (LEU) shares rocketed 40% this past week and have surged 78% so far in 2025 while newcomer American Superconductor’s (AMSC) shares jumped 18% this week.

You may also have noticed that our BYD (BYDDY) recommendation is already up 24% in 2025 and has increased about 80% over the last year. This highlights an important trend in China that is unlikely to reverse.

In China, a consumer preference for multinational brands from everyday items like coffee to luxury markets was clear for decades, boosting the sales and value of companies like LVMH (LVMUY) and Starbucks (SBUX). Since the pandemic, however, preferences have shifted. Which brings us to today’s new recommendation.

This week’s Friday Update includes our comments on earnings reports from four companies and more color on our initial review of another company that reported last week. If Hollywood makes a movie about this market cycle, perhaps it will be called “Revenge of the Moat.”