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Last week had a few potential potholes for the market’s nascent rally, including some influential big-cap earnings releases and an inflation report before the long weekend—but despite some selling that popped up here and there, the market and fresh leaders handled themselves well. Stepping back, we’re definitely encouraged by the market’s snapback and the numerous upside moves in individual, growth-oriented stocks during the past month; we think the odds favor the next major, sustained move is up. That said, a lot of stocks have set up (but not broken out), old leaders (chip names in particular) look suspect and it’s a fact that defensive areas continue to ramp higher, which is a sign that big investors are hunting for some safety. Again, we’re encouraged overall, but continue to think going slow makes sense, especially now that some selling pressures are beginning to emerge, stickign with mostly small positions and keeping some cash on the sideline. We’ll keep our Market Monitor at a level 6 today.

This week’s list is a bit of a hodgepodge, with some recent earnings winners, some fresh names and a few stodgier types. Our Top Pick is Rocket Cos. (RKT), which is basically a cyclical (mortgage lending) company that should be lean and mean after the multi-year dry period—meaning its earnings power should be big as rates head lower.

Five Below (FIVE) has been unable to pull out of its tailspin following a good-but-not-great quarterly report last week, so we’re selling the stock today and booking our small profit.

Here’s an update on the stock which rating has been upped to BUY.

For those investors who still feel like doing some buying, Paul looks at a few stocks that are resisting the downtrend of the market.

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Last week was a split tape, with the big-cap indexes continuing their thrust higher, though the broad market remains a soft spot. Overall, the intermediate-term trend is effectively neutral, and we think what happens from here will tell the tale, with further strength indicating that a year-end rally is underway, though should the broad market infect the leadership, all bets are off. Right now, we’re more optimistic than not, but are simply looking for more confirmation on the upside—we’ll leave our Market Monitor at a level 5.

We think the most bullish thing the market has going for it is the action of individual stocks, a good number of which are beginning to percolate. Our Top Pick definitely quacks like a liquid leading name.

Emerging markets (EEM) stay in a confirmed uptrend with the support of generally upbeat earnings. Investors have piled about $86 billion into emerging-market stocks and bonds this year, more than in the last nine months of 2018 combined.

We have some earnings updates and a new recommendation that actually delivers the strong e-commerce growth—a leading consumer theme of emerging markets.

Emerging market stocks remain in an uptrend, though like most stocks around the globe, a little resting wouldn’t be uncalled for after the recent run-up. Even so, with our Emerging Markets Timer still green, we’re looking to add exposure at opportune times.
Tonight, I see two opportunities—one from the less-followed area of Southeast Asia, and one from China, as one of our watch list stocks is being upgraded to buy. Many of our recommendations are making solid progress, and I’m optimistic both of these can be leaders going forward.

One of the things I want you to remember, as the market falls lower and lower and bad news about politics and the economy multiplies, is this: Market tops occur when the news is best, and market bottoms occur when the news is worst. Thus, somewhere ahead is an absolutely terrible news day that will mark the market bottom—but I don’t know where.

What I do know is that it will come, and that the bull market that follows it will be very rewarding, particularly for investors who are prepared for the bull—and I hope that’s you.

Markets sold off slightly on Wednesday, but really got into it on Thursday, with the iShares MSCI ETF falling a full 2%. Despite the blood-letting, the Cabot Emerging Markets Timer is still flashing a green light, indicating that the medium-term trend of the market is still up.

We’ve seen a bit of turbulence in international emerging markets with speculation about trade talks and the perceived slower growth in China and Europe.

Apparently, institutional investors are underweighting Europe so we go against the grain for our new recommendation. This is a great brand that offers a nice combination of high quality, value price of entry, strong growth in emerging markets and a 7.8% dividend yield.

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

Here are my top eight predictions for the cannabis sector for 2025.

1. Cannabis rescheduling goes through

Promises made, promises kept. Trump loves a “deep state” challenge. Put these two together, and it seems probable that rescheduling could happen in 2025.

In today’s note, we discuss the recent earnings reports from Bayer AG (BAYRY), Duluth Holdings (DLTH) and LB Foster (FSTR).

In today’s note, we discuss the recent earnings reports from Kohl’s (KSS), Kopin Corp (KOPN) and Volkswagen AG (VWAGY).

It sounds heartless to say, but successful investing is largely about exploiting the emotions of others.

The two biggest emotions to exploit in the market are obviously fear and greed. When investors are too fearful, it pays to exploit that emotion by betting the other way. And vice versa for greed.

Another common emotion to exploit is impatience.

Today’s addition is a profitable small-cap MedTech company specializing in products to treat peripheral nerve injuries.

Management has a number of growth-oriented irons in the fire. And I think the company could be an attractive acquisition target.

While the sock has been relatively stable in this increasingly volatile market, we’ll still start with a half-sized position, just in case.

*Note: Your weekly Cabot Turnaround Letter update is arriving a day early, on Thursday, July 3, due to the market holiday on Friday, July 4, in observance of Independence Day.

In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Alcoa (AA), Bloomin’ Brands (BLMN), GE Aerospace (GE), Intel (INTC), Paramount Global (PARA) and Toast (TOST).

GE Aerospace (GE) strength driven by record backlogs in its commercial aerospace segment.