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We’re still playing the seesaw game in the markets—up, down, up, down, etc. I don’t see any need for excess worry; just a little caution that we buy the right stocks. I’m still very long-term bullish, and why not?

The economy continues to strengthen; 79% of the companies in the S&P 500 Index reported positive earnings surprises for the second quarter, and the third quarter looks even better; home building continues to be strong, although low inventory levels continue to pressure resales. Home prices appear to be stabilizing, and employment remains strong.

The soothsayers seem to think that the Fed will keep rates steady at its next meeting, and the probability of a recession has fallen to 16%. What’s not to like?

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There isn’t a ton of good news in this new issue, but there are definite signs that emerging market stocks are making an effort at putting in a bottom. Emerging market stocks (as reflected in the MSCI EM ETF) are above their 25-day moving average and have put a little daylight between themselves and their late-October low. We’re also seeing a few stocks attracting flashes of buying interest, which is also a hopeful sign.

It was a quiet week for Explorer stocks as mega tech momentum stocks have led a sharp rebound from the lows of April’s tariff-driven market pullback. This has led the broader markets to close near all-time highs.

But this is nothing compared with Spain’s IBEX 35 index, which is up almost 40% year-to-date, crushing the Nasdaq’s anemic 4% gain. Spain is now Europe’s fastest-growing major economy with electricity prices helping manufacturing and logistics. Spain brought in 94 million visitors last year and I was one of them. In 2024 alone, 170,000 people migrated from Latin America to Spain, further propelling growth and productivity.

This is the only service where I made money :-)
K. Shah, Cupertino, California

Current Market Outlook


There’s no shortage of things to worry about today, with everything from the Presidential election to Syria to Russia to interest rates seemingly hanging in the balance. And as all good investors know, bull markets climb a wall of worry! So it’s no surprise that the market continues to lean bullish. Leading the group in the U.S. are small-cap stocks (while the major indexes lag), and leading the way internationally are the Chinese stocks, a couple of which appear in this issue—and not for the first time.

The Chinese stocks, however, may be due for a correction, so our Top Pick is Yelp (YELP), which combines a great growth story with a chart that’s in a good buying range.

Stock Name	Price	Buy Range	Loss Limit
MercadoLibre, Inc. (MELI)	980.83	191-185	175-174
NetEase, Inc. (NTES)	0.00	255-245	235-234
Nintendo Co., Ltd. (NTDOY)	0.00	34-32	30-29
Parsley Energy (PE)	0.00	35.5-34	32-31
TD Ameritrade (AMTD)	0.00	35.5-35	32.5-32
Twilio (TWLO)	183.39	60-55	53-50
US Silica Holdings, Inc. (SLCA)	0.00	47-44	40-37.5
Weibo (WB)	98.16	53-49	46-45
Williams Companies (WMB)	0.00	31-29	27.5-27
Yelp (YELP)	41.30	41-39	37-36

Last week all the major indices took a small step back. The S&P 500 lost
1.69%, the Dow fell 2.15%, and the Nasdaq declined 1.61%.



The headlines say the 5-day pullback was the largest for the S&P 500 since February. But considering that the streak of over 230 days without a 5% pullback is still in play, the short-term bearish stretch last week was minimal.



And even with the slight pullback last week, my sentiment has not changed. I remain
“cautiously optimistic” until I see market action that changes my mind.



Of course, if we see further continuation of the recent bearish trend, I might begin to shift my outlook. But a week doesn’t make a trend, and again we must remember we are only a few percentage points from all-time highs.

The COVID-19 problem, as it pertains to the U.S. stock markets, is compounded by the fact that the S&P 500 index had risen about 12% since October.

It’s the largest provider of cell phone service in Turkey, with a 60% market share, and it’s named, appropriately enough, Turkcell. The firm’s ADRs (American Depositary Receipts) trade on the NYSE under the symbol TKC. With 32 million subscribers, Turkcell is the third-largest provider of GSM service in Europe. It has $5 billion in annual revenues; it’s expected to grow earnings 42% this year and 21% in 2008; and it pays an annual dividend of 3.8%!

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

Our pick this week is a resilient stock with great growth, a reasonable valuation and is part of a sector that\'s holding up well. We think it offers both low risk and solid returns, especially once the market resumes its longer-term advance.

In today’s note, we discuss developments and institutional ratings upgrades for some of the stocks in the portfolio, including Fidelity National Information (FIS), Paramount Global (PARA) and Starbucks (SBUX).


The famed “Santa Claus Rally” is underway and, assuming a successful conclusion, portends a bullish early part of the coming New Year.

Despite the headwinds of trade tensions and pundits worrying about China growth, our Explorer portfolio holdings Sea, Alibaba, Luckin Coffee and Huya all reported outstanding financial results this week.

The Emerging Markets (EEM) Timer is still positive as we introduce a new resource recommendation with operations at the very heart of Asia-Pacific growth.

Quick Note: Due to the Thanksgiving holiday, you will receive next week’s Small-Cap update a day early, on Wednesday, November 27, 2024.

The S&P 600 SmallCap Index raced higher right after the election, gave a little back last week, found support at the previous all-time high early this week, and is now rallying again.

I think the small-cap story is starting to get out there and driving a wave of interest from investors who haven’t given small caps much thought for a few years. There is so much potential to rally from here that it can be a little hard not to get too bullish.

The bull market rages on, and technology stocks continue to garner most of the headlines, some of which we’ll examine today. But our new recommendation isn’t some go-go artificial intelligence play: it’s a small-cap U.S. titanium maker that’s off to a very fast start (+56%) in 2024 ... with plenty more runway ahead.

Selling in November, especially in leading growth stocks, hit the Magnificent 7 hard, but the best of the bunch—the Dynamic Duo—are hitting all-time highs.