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The market rally that materialized over Thanksgiving week is on temporary hold as investors wait to see if the Fed will, in fact, cut interest rates by another 25 basis points as anticipated this week. If it happens, there’s a good chance the risk-on mood will resume, and the major indexes could reach new all-time highs by Christmas. While I’m not big on predicting what’s going to happen with the Fed, the odds heavily (87%) favor investors getting their wish, so let’s play those odds today by adding a speculative mid-cap software stock recently recommended by Mike Cintolo in Cabot Top Ten Trader.

Details inside.

Value stocks are outperforming growth stocks right now.

That’s not a sentence that’s been uttered (or written) often over the past decade and a half. But for the past three months, it’s definitely true. Growth stocks – as measured by the Investors’ Business Daily 50 ETF (FFTY) – peaked in late October and are still 10% off their pre-Halloween apex. Value stocks – as measured by the Vanguard Value Index ETF (VTV) – have risen more than 4% during that time and have really come on since the calendar flipped to 2026, advancing nearly 3%.

Tariffs are back in the news. And the stock market doesn’t like it.

Investors shrug off a lot of things these days – geopolitical turmoil (lots of it), flagging jobs growth, a record-long government shutdown, wars, etc. But tariffs, and tariff threats, are still a four-letter word on Wall Street. So it was no surprise that stocks had their worst day of the young year on Tuesday after President Trump threatened high tariffs on Europe over the Greenland situation, and European leaders responded in kind.

Perhaps the whole kerfuffle will be settled over a catered lunch at the World Economic Forum in Davos this week. Or maybe tensions will escalate further. Either way, this feels like a pivotal week for stocks.

This month and early November will be jammed with possibly market-moving events: earnings season, presidential (and now importantly, vice presidential) debates, the actual elections, a likely new federal stimulus package, possible change (in either direction) in the pandemic’s course, and perhaps news about a vaccine solution.

But for now, we’re stuck in Limbo-Land, with the worst (hopefully) of the pandemic behind us, yet so many unknowns just ahead. We outline some basic suggestions that we follow when in this type of market.

Through most of the summer, investors had become increasingly confident about the strength and direction of the economic recovery, the likelihood of the arrival of several promising Covid vaccines, another round of federal economic stimulus and other favorable indicators.

Inflation stays high, infrastructure week arrives, and Rivian stock surges while markets sold off a bit yesterday. The weakness yesterday halted some good rallies among Explorer stocks. We continue to explore new ideas and for this week’s recommendation, we go into the Cloud for a familiar name.

Everybody’s focus is on the high-stakes chess game the U.S. and China are playing with respect to trade, and the upcoming Uber IPO. But behind the scenes there’s a nice little rally going on in a certain group of small-cap stocks!

Trading remained muted this week, with markets closed Monday for New Year’s Day. Wall Street began to return to work yesterday, and got the New Year off to a good start with solid gains in all the major indexes. On the flip side, some conservative high yield investments, like utilities and preferred shares, declined.

U.S. crude oil hit a seven-year high as stocks, especially tech stocks, face headwinds. Today I am moving dominator Taiwan Semiconductor (TSM) to a Sell as Taiwan, America, China and Japan play a dangerous game. China sent 52 warplanes into the islands air buffer zone after the U.S. and allies held exercises nearby.

Whether this is a quick V-shaped pullback like we saw after Brexit or a more serious correction will become apparent in coming weeks, but I suggest you become a little more conservative while we wait and see. We’re selling half of CVS Health (CVS) and J.M. Smucker (SJM) today and putting Home Depot (HD) on Hold.

My list includes five stocks that are attractive from a growth standpoint and five that qualify as value stocks.

Welcome to the fifth and final chapter of my travelog on my recent 17-day 4,218-mile road trip to and through the American midwest and back Today, I wrap up the series with 10 notable things encountered on the trip that were unexpected—presented in the order they were encountered.

I receive a lot of email questions from Cabot Wealth Advisory and Cabot Benjamin Graham Value Letter subscribers. I learn something from every email you send me--either from your remarkable knowledge or from the research that I conduct to formulate a deserving answer. Recently, I received the following thought-provoking questions.

Rather than give the same old big advice (buy quality stocks on reasonable pullbacks, let your winners run, cut your losers short, and don’t try to go against the trend of the market) I’m going to recommend three small changes that you might actually be able to implement. And a successful small change is much better for you (both financially and emotionally) than a big change that you can’t make happen.

Today’s note includes earnings updates, ratings changes and the podcast.

In this issue I highlight two timely stocks for purchase now.

After trading as low as 1139 on May 12 the S&P 600 Small Cap Index has staged a modest recovery, crossing back above the January and February lows of around 1230 two weeks ago.

The consensus opinion right now is that the market is strong because it’s looking favorably on the prospects of a clear-cut winner in the upcoming presidential election and that the likelihood of another round of stimulus is going up.