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Things tend to regress to the mean, and recent history suggests that bodes well for consumer staples and housing, this year’s two weakest sectors.

Yesterday, the stock market had its worst day since October; the Dow, Nasdaq and S&P 500 all declined over 1%. Financials and materials stocks were the biggest losers, while safe havens gained.

Before we dive into this morning’s Weekly Review, I wanted to bring to your attention to the schedule for this holiday week. I will be working/trading as normal Monday through Wednesday, and then will be off Thursday through Monday morning, which means we won’t be sending a Daily Watchlist or the Week in Review on Monday, November 27. Have a great Thanksgiving!

With many people watching the developments on the Ukraine front and the inflation front, my focus is on the broad market’s lows of late January, which serve as a line in the sand that we don’t want to see crossed. And because the market is technically in a downtrend, I continue to focus on lower-risk stocks, and hold a healthy cash position as well.
The only change to the portfolio today is the sale of Oracle (ORCL), which is going the wrong way.


As for the new recommendation, it’s a well-established American brand whose stock has shown great strength recently.


Details inside.

Many are surprised to learn that the concept of telehealth wasn’t a direct result of the Covid pandemic in 2020. Indeed, the practice of online consultations between patients and medical personnel has been practiced for over 20 years, and this month’s featured company is arguably the first one to bring it to global prominence.

The S&P 500 reached a new all-time high. Now what?

It’s been a tremendous recovery since the “tariff Armageddon” days of early April. Stocks went from the precipice of a bear market to a brand new high in just a couple of months.

There really isn’t a lot to complain about. But I’ll try.

The S&P 500 spiked about 25% from the low of early April. The index is now up around 2% YTD, up 1.5% in June, and is just 2% from the all-time high. That’s great in terms of coming off the precipice of a bear market. But a 2% YTD return halfway through June isn’t exactly lighting it on fire.

With the current earnings season more than halfway complete for S&P 500 companies, a clearer picture of the overall corporate health backdrop is beginning to emerge.

While investor-friendly cannabis reform marches ahead at the state level, it’s still a “wait and see” game in Washington, D.C.

Rescheduling by the Trump administration remains the big potential near-term federal catalyst. If it happens, it will be a “sell the news” event for at least part of your cannabis exposure over the subsequent two or three trading days, for these reasons:

A few weeks ago, we introduced the Gartner Hype Cycle, which traces the path that all tech companies follow in what essentially is an immutable law of tech investing. Currently, tech stocks have passed the Peak of Inflated Expectations and are sliding down to the Trough of Disillusionment. A few will ascend back to prosperity along the “Slope of Enlightenment” if they maintain both their relevance and their competitive edge. But most will lose one or both of these traits and thus continue downward in what could be labeled the “Decline into Oblivion.”

The chart below follows the same pattern as the Tech Hype Cycle chart while it more specifically traces the pattern of revenues and profits. The peak of the Hype Cycle corresponds, of course, to the peak of the Sales cycle in the Maturity Stage. Most tech companies follow the Decline Stage line into oblivion.

This week’s note includes our comments on earnings from 10 of our companies. The deluge continues next week.

The note also includes the monthly Catalyst Report and a summary of the November edition of the Cabot Turnaround Letter, which was published on Wednesday. We encourage you to look through the Catalyst Report. This report is a listing of all of the companies that have reported a catalyst in the past month. These catalysts include new CEOs, activist activity, spin-offs and other possible game-changers. We source many of our feature recommendations from this list. You will find it nowhere else on Wall Street.

In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Agnico Eagle Mines (AEM), Alcoa (AA), Kenvue (KVUE), Pan American Silver (PAAS), Sirius XM Holdings (SIRI) and Toast (TOST).

Precious metals miners Agnico Eagle Mines (AEM) and Pan American Silver (PAAS) continue to lead the portfolio after making yet another series of new highs this week.

The proposed merger between Union Pacific (UNP) and Norfolk Southern (NSC) throws into sharp relief an accelerating—some would say disturbing—trend of mega-consolidation across a number of key industries.

Like many coffee aficionados, I have something of a love/hate relationship with Starbucks (SBUX). My main gripe is that the company’s food and beverage offerings have always been pricey compared to the fare served in most fast-food restaurants and run-of-the-mill coffee houses.

Today we’re going to add two new stocks to the Model Portfolio: Abiomed (ABMD) and Dave & Buster’s (PLAY)

The market remains extremely volatile and news-driven on a daily basis, with tariff shenanigans repeatedly in the headlines. That said, nothing much has changed with our market timing indicators. The intermediate-term trend is still pointed down and the broad market remains unhealthy, so we continue to advise a cautious stance, with only small new buys and plenty of cash on the sideline.