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The artificial intelligence trade was under pressure last month. But it recovered over the last three weeks. The back and forth has again taken a negative turn after AI bellwethers Oracle (ORCL) and Broadcom (AVGO) reported earnings that didn’t impress investors.

Note: Due to the Thanksgiving holiday, the Cabot Turnaround Letter weekly update won’t be published on Friday. Instead, the next update and the Catalyst Report will be sent out on December 5.

Given the obvious risks of the current macroeconomic environment (inflation, geopolitical volatility, etc.), it’s my contention that sector selectivity has never been more important. That is, when evaluating stocks for potential purchase, it’s imperative that we consider the potential impact the macro climate might have on said investment going forward.

Cannabis investors should see a significant catalyst inside the next six weeks. That’s a reasonable time frame to expect Attorney General Pam Bondi to implement President Donald Trump’s executive order to reschedule cannabis.

The news would spark a sellable rally for traders. Long-term investors should hold through.

The background: Rescheduling means moving cannabis to Schedule III from Schedule I under the Controlled Substances Act. That will save the larger publicly traded cannabis companies like the ones in our portfolio tens of millions of dollars each in annual tax expenses. That’s because rescheduling neutralizes an IRS rule that bars the deduction of operating expenses against the sale of Schedule I substances.

Today could be a big day for cannabis stocks.

The reason: We may get an important update on the rescheduling timeline.

Cannabis investors will be watching closely today to see whether Attorney General Pam Bondi offers a rescheduling update when she appears before the House Judiciary Committee. Upbeat comments could spark a sharp cannabis sector rally. The hearing starts at 10 a.m. EST.

Note: Due to a technical issue, publication of your Cabot Cannabis Investor update has been delayed by one day. We apologize for any inconvenience; future updates and issues will be delivered per the normal publishing schedule.

If you have been steadily averaging down in cannabis stocks during the sector’s dark days all year, well done.

You are finally being rewarded.

Just when things were getting seriously ugly, the market started having a great week.

Interest rate disappointment is being replaced by earnings anticipation. The new earnings season came in the nick of time. After five straight up months, the S&P was having a terrible April. Last week was the worst week of the year so far and the index has fallen over 5% from the recent high.

It’s been a great market for a while. But it has leveled off since the middle of May. I expect more of the same going forward.

The S&P 500 pulled back in early April after a five-month rally as sticky inflation soured the interest rate narrative. The index then recovered to new highs in the middle of May on an improved interest rate outlook. But stocks have since leveled off as the interest rate outlook got stuck in the mud.

This market just continues to forge ever higher. The S&P 500 closed at new all-time highs four times last week. The index is now up 15% YTD, and we’re not even at the halfway point.

It’s the post-Labor Day market. Investors tend to start paying attention again after the summer. This refocus prompted one of the worst selloffs this year.

Investors were positive about things in the middle of August before they went on vacation and stopped paying attention. The market rode out the rest of the month in the same form. But investors coming back to real life after the summer realized that there might be more to worry about.

It’s a new era, a changing of the guard. This week a Fed easing cycle starts as the Fed will begin to lower the Federal Funds rate after the steepest hiking cycle in decades. The easing cycle is expected to last for years.

The market is hot stuff again. The S&P made a new high this week after making up all the early September losses and then some. It is the 40^th record close for the index, which is now up 20% YTD with another quarter left.

The third quarter ended with the market looking good. The S&P 500 was up 2% in September after a rough start, 4.3% for the third quarter and over 20% YTD. Can the good times last?

Monday was a bloodbath in the market. All three indexes posted massive losses. The Dow was down 2.6%, the S&P fell 3%, and the tech-heavy Nasdaq fell 3.43% on the day. The indexes recovered some of the losses on Tuesday. What can we expect going forward?

It’s cannabis company earnings season. So, I highlight fourth-quarter results in this issue.

Before we get to the details, here are the key takeaways from earnings reports:

* Price compression continues, creating an ongoing “Hunger Games” environment in which only the financially strong will survive, given the debt levels at a lot of cannabis companies. Much of this debt comes due over the next two years. Bankruptcies might be the clearing event that helps bring an end to price compression. None of our names appear to be at risk, but no guarantees...

In today’s note, we discuss pertinent developments for some of the stocks in the portfolio, including Agnico-Eagle Mines (AEM), GE Aerospace (GE), Paramount Global (PARA), Sirius XM (SIRI), Teladoc Health (TDOC) and UiPath (PATH).

Gold and silver continue to benefit from safe-haven buying, boosting our holding of Agnico-Eagle Mines (AEM).

Trump’s tariffs are directly, or indirectly, roiling some of holdings, including Sirius XM (SIRI) and UiPath (PATH). The favorable long-term outlooks for both stocks remain unchanged, however.

Things are getting dicey in the market.


The problem is interest rates. Growth expectations are strong following the election. At the same time, inflation has been sticky and not moving lower. Investors were already expecting higher rates for longer when they got a gut punch with last week’s strong jobs report.

While the market news is inundated with Trump stories as he has issued a massive number of executive orders on his first day in office, the real market catalyst right now actually started last week.

There were a slew of executive orders affecting the energy industry but no real surprises. The improving story remains essentially the same since the election. There was likely some relief that large tariffs have not been announced, at least so far. But the Trump news is overshadowing last week’s market-altering news.