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The market remains in a rough spot, with a hawkish Fed that continues to raise rates into what’s become a rolling bank crisis, with some big names going under and others walking the plank. Far more important to us than the news is the market’s reaction to the news--and it remains mixed when it comes to the indexes (intermediate-term trend neutral), but growth stocks remain iffy at best, with many good-looking setups falling apart on earnings of late, and with relatively few really powering ahead. All of this can change in a hurry, but until it does, we continue to think growth investors should remain generally cautious and flexible as we wait for a more certain environment that will entice big investors to pile in.

In tonight’s issue, we have no changes to the Model Portfolio (though one small position is on a tight leash), holding north of 60% in cash and working on building our watch list. Elsewhere tonight, we write about the market’s very narrow nature, highlight the housing group (which has a history of trending even in bad markets) and have re-added a few names back to our watch list after some old favorites have popped on earnings.

The market has a split tape right now -- on one hand, the broad market is very weak, led lower by the horrid financial sector, but on the other hand, many growth indexes and individual stocks are hanging in there ... with some actually stretching higher. We’re certainly not going to ignore our market timing indicators (Cabot Tides and Two-Second Indicator are negative), but it’s hard to ignore the action in growth, either, especially after last year’s bear and lots of bottoming action. Thus, tonight, we’re adding two half-sized stakes in potential new leaders, but also holding a bit more than half the portfolio in cash.

Elsewhere in the issue, we write about the action of interest rates (likely longer-term positive) and the resilience of growth stocks, along with a full watch list and some new enticing ideas. All in all, we remain flexible, but are still mostly cautious given the evidence.

From a top-down perspective, there are some rays of light out there--some of this week’s up volume has been very rare, and it comes on the heels of an onslaught of pessimism. That said, none of our indicators have flashed green, and the biggest thing we’re still seeing is selling on strength--this week, Enphase cracked and forced us to sell. We are adding two half-sized positions tonight in stocks from our watch list, but we’re remaining defensive with 78% in cash.


Elsewhere in this issue, we write about our Aggression Index and how it usually leads market bottoms--and how it’s showing interesting action in recent months. We also highlight many stocks that we’d love to own if the market gets going--we have our shopping list ready, but as always, have to see it first before any major buying.

The market and growth stocks have had a couple of wobbles so far in September, and given the heady run from leading stocks in August, some further shakeouts are possible. If the selling pressure intensifies enough to turn our Cabot Tides negative, we’ll trim our sails, but right now, the trends of the major indexes and the vast majority of leading stocks are pointed up, so we remain positive.

The market rolled over this week, but it’s too early to say if it’s the start of another correction or just some turbulence. Either way, we’re well prepared, with exposure to a broad range of sectors, including some benefiting from the uncertainty.

The market has gotten “exciting” again, for better or worse. In today’s issue we’re making lemonade from lemons, adding a medical REIT to the high yield tier.

Current Market Outlook


The market continues to gyrate wildly, gapping up or down based on the news of the day. In the short-term, the indexes (and most stocks) have etched out a little trading range, and that could continue for a while longer. But the main trend remains down, so you should be using these bounces as a chance to unload any broken stocks and raise cash if you’ve yet to do so. On the buy side, we are starting to see the wheat separate from the chaff, but it remains too early to put any big money to work; a couple of small positions is fine, but we suggest focusing mostly on preserving capital for the next sustained run—that’s when the big money will be made.

This week’s list includes with some recently strong themes (medical, construction and retail), including a couple of recent IPOs. Our Top Pick is one of those newly-public firms—Planet Fitness (PLNT) has a good story and the stock has shown solid relative strength since coming public.

Stock Name	Price	Buy Range	Loss Limit
Signet Jewelers (SIG)	0.00	135-140	125-127
Post Holdings (POST)	0.00	63-65	59-60
Planet Fitness (PLNT)	0.00	17-19	15-16
PDC Energy (PDCE)	0.00	53-56	48-49
Medicines Company (MDCO)	56.98	38-41	34.5-36
Lululemon Athletica (LULU)	304.69	64-66	60-62
JetBlue Airways Corporation (JBLU)	0.00	23-24	21-21.5
TopBuild (BLD)	111.00	32-34	29.5-30
Anacor Pharmaceuticals (ANAC)	0.00	125-132	118-120
AMN Healthcare (AHS)	0.00	33-35	31.5-32

This week’s update includes commentary on earnings from Conduent (CNDT), ESAB (ESAB), Gannett (GCI), Goodyear Tire & Rubber (GT), Holcim (HCMLY), Ironwood Pharmaceuticals (IRWD), Kaman (KAMN), Molson Coors (TAP), Organon (OGN), Volkswagen (VWAGY), Warner Bros Discovery (WBD) and Western Union (WU).

Seatmaker Adient (ADNT) reported this morning with encouraging results – we’ll include more detailed commentary next week.

Next week, TreeHouse Foods (THS), Viatris (VTRS), Elanco Animal Health (ELAN), ZimVie (ZIMV), Brookfield Re (BAMR) and Toshiba (TOSYY) report earnings.

Not much has officially changed with the market since our last issue, with the Cabot Tides positive, but the other indicators still down and with most growth stocks still having trouble making any real progress. That said, we are seeing a gradual improvement in the evidence, with other indicators closing in on green lights and, even among individual stocks, some better, more proper action.

Overall, we remain defensive, but we are making a couple of small moves tonight, adding two half-sized positions, including one in a stock we already own.

In tonight’s issue, we go over all our stocks, highlight some new names and even talk about one non-growth sector that intrigues us. Ideally, the market is ready for a real rally, and if so, we’ll be aiming to put our remaining 70% cash position to work. But for now, going slow remains your best course.

I’m plucking my Bank of America (BAC) stock review out of the Growth Portfolio section, and putting it right here in the editorial section of the weekly update. That’s because good news affecting BAC will also affect virtually all bank stocks.

Current Market Outlook


We wrote a few weeks ago that a straight-up move from October’s vicious selloff would be highly unusual bullish action … and that’s just what we’ve seen! Now, to be clear, not everything is positive—many commodity-related sectors are still struggling, and earnings season has resulted in more than a few duds. Plus, having soared back to their highs, the indexes could easily take a breather in the short-term. That said, the snapback from the October lows has produced tons of stocks surging to (or close to) new highs, and the power of the move tells us to expect better times ahead. Following the evidence, we’ll move our Market Monitor up another couple of notches. There will be pullbacks, but the path of least resistance is up.

This week’s list focuses on a bunch of recent earnings winners, including some big-cap firms that big investors are gravitating toward. Our Top Pick is Visa (V), which is on the move after building a base for most of 2014.

Stock Name	Price	Buy Range	Loss Limit
Whirlpool (WHR)	0.00	165-170	148-150
Visa (V)	0.00	234-242	218-220
Ulta Beauty (ULTA)	331.95	114-120	100-105
Infinera (INFN)	0.00	13-14	11-12
Incyte Corporation (INCY)	76.98	65-67	59-60
Salesforce.com (CRM)	0.00	61-63	56-57
Centene (CNC)	0.00	88-91	81-83
Baidu (BIDU)	0.00	225-235	210-215
AbbVie Inc. (ABBV)	93.53	62-64	59-60
AmerisourceBergen (ABC)	0.00	84-86	76-78

Calm has been restored to the stock market, at least for now. A week ago – when the VIX briefly spiked as high as 66(!) – it was the opposite of calm. So even if stocks don’t suddenly go straight back up again, this is a welcome return to pre-August form. With that in mind, we have no new sells or downgrades (several of our stocks are hitting new highs!), and we add a very normal-looking growth stock that’s been sailing along just fine despite the many headwinds of the last few weeks. It’s a recent recommendation from Mike Cintolo in Cabot Top Ten Trader.

Details inside.

The market’s evidence continues to improve, with our core market timing indicators returning to the bullish side of the fence. That’s obviously a good thing and has us optimistic -- though upside follow through from here will be key, as many growth measures are still lagging behind, though we are seeing more setups, especially from areas that sat around for much of the past year (see the issue for much more on that). All told, we are doign some new buying tonight, and will have more to come if the market continues to act well.

Stocks are at all-time highs, yet again, defying the myriad potential macro tailwinds (expanding war in the Middle East, looming presidential election, another damaging hurricane, Q3 earnings season underway, etc.) that have been threatening to derail the market. One of them still could, but for now, we’ll stick with what’s in front of us, and that’s a market with plenty of momentum. Today, we lean into that momentum by adding a mid-cap tech stock recently recommended by Tyler Laundon to his Cabot Early Opportunities audience.

Details inside.

The major indexes are up to new highs, though they again have become very dependent on the Magnificent Seven in the last month after stocks of virtually all sizes and sectors rallied in November and December. Outside the Mag Seven, most stocks have been stagnant so far in 2024. Not so in the Stock of the Week portfolio, where we have multiple stocks hitting new highs, none of which belong to the Mag Seven, and TWO stocks that have doubled in the last year! We try and keep the hot streak going by adding a familiar, big-name growth stock that was beaten to a pulp during the bear market of 2022 and 2023 but has demonstrated some real momentum in the last three months. It’s a recent recommendation from Cabot Explorer Chief Analyst Carl Delfeld.

In the June Issue of Cabot Early Opportunities, we continue to lean into AI themes while taking a swing at a speculative space communications company. We’re also trying to keep things real here on earth with a picks-and-shovels-type infrastructure play, and we pull back the curtain on a real rarity in 2024, a software stock with a nice chart!

As always, there should be something for everybody.

It’s Fed rate-cut week. Will Jerome Powell and company come out of the gates quickly, slashing rates by a full 50 basis points, as the majority of traders now expect? Or will they start with a more sober, 25-basis point cut … which is what I expect? In the long run, it probably doesn’t matter much. But in the current market, the answer will likely determine whether last week’s bounce-back has legs – or if another October bottom is in order.

In the meantime, today we add a stock that has nothing to do with interest rates: a fast-growing water company. It’s a recent recommendation from Tyler Laundon in his Cabot Early Opportunities advisory.

Details inside.

Glad to be back! A lot has happened in the two weeks since I last wrote, with the market reaching new record highs despite the tariff deadline coming and going without a ton of clarity. And now second-quarter earnings season has arrived, which could provide further wind in the market’s sails, though estimates are more tempered (5% growth, vs. 14% growth among large-cap companies in Q1) this time around.

Meanwhile, our portfolio is humming, with TWO of our stocks reaching their price targets today! We’ll “retire” them to make room for today’s new recommendation, from an industry I wrote extensively about in our last update: movie theaters. The hope is that this movie theater stock will follow in the footsteps of United Airlines (UAL) and Carnival Corp. (CCL) and quickly reach our price target as shares play catch-up to their fundamentals due to some post-Covid lag.

Details inside. Enjoy!

Despite a number of domestic and international geopolitical concerns, the market continues to act well. The S&P 500 is within a stone’s throw of its February all-time high.

This month, we add two high-growth tech names and place three additional compelling opportunities on our Watch List.