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This month we’re jumping into a small software company that provides solutions for a specific small- and mid-sized business (SMB) market.

While the market for SMB software has been tough for the last two years, this company’s revenue growth has accelerated and customers that bailed in 2022 are coming back. In short, best-of-breed software isn’t dead! And this player is about to become profitable too. Enjoy!

WHAT TO DO NOW: Do a little buying. The market’s evidence has improved over the past couple of weeks, with our Cabot Tides on the verge of a green light and our Two-Second Indicator having flashed an all-clear. Even so, growth measures (Aggression Index, Growth Tides) are still broadly neutral, while earnings season has been tricky for individual stocks. Put it together and we’re doing a little buying tonight but starting slow: In the Model Portfolio, we’re adding a half-sized stake (5% position) in TransMedics (TMDX) and adding a 3% position in Cava Group (CAVA), leaving us with around 36% in cash. We’re also placing Pulte (PHM) back on Buy. Details below.

WHAT TO DO NOW: Remain bullish, but again, be sure to keep your feet on the ground. The pullback last week was tedious, and our Two-Second Indicator is looking iffy, but the market’s trends have remained up and growth stocks are still very strong. We sold one-third of our Palatir (PLTR) position earlier this week, booking partial profits in a good winner, and tonight we’re going to average up in Samsara (IOT), buying another 5% stake, which will leave us with around 19% in cash. Details below.

The big macro news of the week wasn’t specific to small caps, but it sure helped in stopping a sliding small-cap index at its 25-day moving average line yesterday.

I’m referring to the CPI print for November, which was released at 8:30 AM ET yesterday and gave most of the major market indices a boost, with the exception of the Dow.

The S&P 500 delivered an impressive 16% return in the first half. Can the good times continue in the second half?

A big part of the latest surge higher has been the artificial intelligence (AI) excitement. After Nvidia (NVDA) blew away expectations citing far greater demand for AI technology, the market-leading tech sector caught fire. But returns were impressive even before then as the market is sensing a soft landing.

Good news. The U.S. economy is delivering Goldilocks-like growth—strong but not too strong—and the stock market is back in a good mood. Inflation rose 0.2% in February, meeting expectations but down a notch from last month’s 0.5% rate. And Friday’s jobs report showed that job creation remains robust, but wages are still increasing slowly (up 0.1% in February). The report pushed the yield on the 10-year treasury to within 0.06 percentage points of 3%, but it stopped just shy of breaking through.

The Dow Jones Industrial Average celebrated 125 Years yesterday as the index has increased an average of 7.7% each year. Markets continue to consolidate and churn with solid earnings offsetting concerns over inflation and valuations. This week Virgin Galactic (SPCE) took off while overall Explorer positions moved forward. Today’s new recommendation is a big data software stock that is in an uptrend on the back of some big government contracts. Enjoy!

The broad market strengthened over the past week, led by a rebound in tech stocks. Other leading sectors included real estate, energy and, for a second week, materials. Utilities also rebounded, as interest rates pulled back. The only industry group that hasn’t advanced over the past five days are the financial stocks.

I’m making three portfolio moves today. I’m putting one stock on Hold due to an earnings miss and taking half our profits in another stock off the table, as the stock has stalled out. We’re also selling one stock, as planned, due to significant technical erosion in the chart.

The S&P 500, Nasdaq and Russell 2000 are all up modestly compared to a week ago, while the S&P 600 is roughly flat.

Between the two small-cap indices, the Russell 2000 has been the stronger performer lately. It has a higher proportion of more speculative, lower quality stocks (i.e., those with lower or negative earnings), which have attracted more attention than the comparatively higher-quality (i.e., those with higher or positive earnings) stocks in the S&P 600 index.

The end of the government shutdown is buoying markets while indications that some of the AI-related stocks are retrenching is a headwind for the overall market.

The AI story is clearly impacting the cutting of management jobs with the worst numbers in one month in more than two decades, according to outplacement firm Challenger, Gray & Christmas. The last time companies made more layoffs during that month was in 2003, when cell phones started to take off. American investors funded $104 billion of AI startups in the first half of 2025 alone.

In today’s note, we discuss the recent developments concerning Barrick Gold (GOLD) and V.F. Corp. (VFC), while taking a nice profit in the latter stock.

Today’s addition is a play on the growing shift toward healthier eating habits and nutritional supplements. It’s a small, U.S.-based natural foods grocery chain that’s growing, profitable, pays a dividend and has very little exposure to tariffs.

It offers considerable upside potential but also should have decent downside protection. In other words, a good stock for the current environment!