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This is, almost certainly, our last update before the Fed starts slashing interest rates for the first time this year. According to the CME Group’s FedWatch Tool, there is now a 100% chance Jerome Powell and company will cut rates by some amount on September 17; 90% think it will be by 25 basis points, another 10% think it will be by 50 basis points, much like last September.

After an amazing run higher, growth stocks hit an air pocket this week, with many highfliers coming down and some abnormal action being seen. We haven’t exactly floored the accelerator during the past few weeks, and we took our cues from individual stocks, paring back this week and leaving us with a good-sized cash position. That said, we’re not making any major market call--the trends remain up, and many growth stocks are acting OK--so while we want to see how growth reacts from here, we’re flexible and could put some money back to work soon if key names stabilize.

Welcome to 2026! Sure, the year technically began on Friday. But nobody cared. The Monday after New Year’s is when the rubber really hits the road. And the year is beginning on a positive note.

This is hopefully the year when the bull market broadens beyond technology and AI. The stage is set for that to happen. The rest of the market is a lot cheaper. The economy is forecasted to strengthen. The Fed is in a rate-cutting cycle. Inflation is benign. And earnings growth is expected to improve.

It was another stellar year for the market. The S&P is up between 17% and 18% with just a couple of trading days left. After two years of 20%-plus returns in 2023 and 2024, the S&P has put together the best three-year run this century.

2025 has been another good year for investors, but as it comes to a close, it’s time to look forward to 2026. This month, let’s explore strategies we can use to strengthen our finances via eleven steps you can take right now to carry your financial momentum into 2026 and beyond.

Last Monday marked a special day for us at Cabot: The 39th anniversary of the first issue of Cabot Market Letter, our flagship newsletter. In honor of this anniversary, I’ve interviewed Cabot Market Letter’s current steward, Michael Cintolo.

One of the reasons I love the stock market is that it’s such a battle of the mind. Of course, few pundits or analysts will tell you that--to them, it’s all about number crunching, research, valuation and industry analysis. And all of those are important. But when you get down to it, with money on the line, buying and selling stocks becomes emotional. Really, though, it’s how you handle those emotions that will go a long way toward determining how much money you make and keep in the stock market. The investors that shoot from the hip and react to every wiggle in the market generally do poorly. Those that have a well thought out plan are usually the ones that excel.

I’m making three portfolio moves today. I’m putting one stock on Hold due to an earnings miss and taking half our profits in another stock off the table, as the stock has stalled out. We’re also selling one stock, as planned, due to significant technical erosion in the chart.

This is a big earnings week that could determine the near-term direction of the market.


This earnings quarter started at the beginning of this month. But the rubber hits the road this week. Big technology companies including Alphabet (GOOG), Microsoft (MSFT), Amazon (AMZN), and Meta (META) as well as energy companies Exxon Mobile (XOM), Chevron (CVX), and Valero Energy (VLO) all report this week.

The market has taken a turn for the worse during the past week—the February/March rally attempt is over, and now we’re even seeing the sellers come around for growth stocks, which had been resilient. It’s not a time for panic, but we’re taking action, having sold three stocks during the past couple of weeks and, tonight, half of another, leaving the Model Portfolio with around 44% in cash.

Investor received a well-deserved wake-up call last week but the big-picture trends are still positive and growth stocks continue to be where the action is. In this month’s Issue of Cabot Early Opportunities, we take a look at a diverse mix of fresh opportunities that are all linked by one commonality – they give investors exposure to some of the most interesting and durable growth trends out there.

The market has finally begun to consolidate after a heady eight-week run in the major indexes and leading stocks. It’s never fun to see things retrench, and we do think the next couple of weeks (very roughly speaking) could see more choppy, tedious trading. But our focus remains on the intermediate- and longer-term picture, and on that front, the evidence remains bullish, so we remain heavily invested.



The Model Portfolio has been steadily putting money to work, including filling out two positions last week. We now have eight stocks and a cash position of around 14%.



In tonight’s issue, we give our latest thoughts on all our positions and write about yet another unique, longer-term bullish occurrence that bodes well going forward.

Current Market Outlook


It looks as if the first “test” of the nascent uptrend has arrived; the major indexes have barely been dented, but under the market’s hood, we’re seeing something of a rolling correction, with a couple of sectors getting hit every day, and with a few stocks breaking down. The next few days will probably be where this rally’s rubber will meet the road—to this point, the selling has been normal (even expected) given the month-long rally from the mid-October lows. Thus, we remain bullish, but we’re also keeping a close eye on the action, both to judge the market’s health and to identify stocks that are setting up new entry points.

This week’s list has a nice array of stocks of varying sizes and from different sectors. We like many of them, but we’re going to go with Sierra Wireless (SWIR) as our Top Pick—it’s a bit speculative, but has a powerful chart and huge numbers, and any shakeout could create a nice buying opportunity.

Stock Name	Price	Buy Range	Loss Limit
Taser (TASR)	0.00	19-20	16-17
Sierra Wireless (SWIR)	0.00	34.5-36.5	29.5-30.5
NetSuite, Inc. (N)	0.00	105-108	96-98
Leggett & Platt, Incorporated (LEG)	49.79	39-41	35-37
Health Net (HNT)	0.00	48-50	44-46
Electronic Arts (EA)	0.00	40-42	37-38
Dexcom (DXCM)	421.36	50-53	45-46
CyberArk (CYBR)	111.74	39-43	33-34
Ambarella (AMBA)	52.79	47.5-48	43-44
Apple (AAPL)	248.94	108-114	100-103

Your investment process should be similar to the intake process when you visit the doctor’s office, checking every stock’s vitals first.

I know that you’ve probably been reading headlines about the perilous state of the Chinese economy, and you think that investing there is too nervous-making to attempt. I have two pieces of evidence to help convince you that adding some China to your portfolio is a good idea. First, let’s have a look at a daily chart of PowerShares Golden Dragon Halter USX China ETF (PGJ) showing its performance during the last six months.

Why is the U.S. economy growing much faster than all the pundits and economists expected? The answer might be deregulation.

Russia’s invasion of Ukraine has sparked even more volatility in the markets. But these three momentum ETFs are actually benefitting.

Current Market Outlook


Earnings season. The upcoming U.S. elections. Spiking COVID positives and accompanying Europe lockdowns. All told, what was a cleaner situation a couple of weeks ago has turned into one with a lot of crosscurrents, and that has caused a buyers’ strike of sorts, with the major indexes and many leaders pulling back of late. It’s not a disaster, but today’s action has put the intermediate term back on the fence; basically, it looks like the market is still in a consolidation phase after the big March-through-August rally. It’s a similar deal with leading stocks, as many have taken on water, though few have cracked. (In fact, we see a lot of good setups out there should buyers step up soon.) All in all, we’re not making any huge moves, but we’ll knock our Market Monitor down a notch and keep a close eye on things.

This week’s list is an interesting mix of growth and turnaround situations, including a couple that have their hands in both cookie jars. Our Top Pick is Align Technology (ALGN), which just galloped out of a two-year base after earnings. Aim to buy on weakness.

Stock Name	Price	Buy Range	Loss Limit
Align Technology (ALGN)	448.51	420-440	375-390
AAXN (AAXN)	101.69	99.5-102.5	90-92
Exact Sciences (EXAS)	107.06	103-107	91-93
The Gap, Inc. (GPS)	17.75	19.5-20.5	17-17.5
General Motors Company (GM)	36.83	34-36	31-32
GrowGeneration (GRWG)	17.75	16.5-18	14-15
MercadoLibre, Inc. (MELI)	1270.86	1180-1240	1070-1110
NIO Limited (NIO)	25.86	23.5-25	20.5-21.5
Shift4 Payments (FOUR)	55.98	51.5-54	46-47.5
Square, Inc. (SQ)	176.77	164-171	148-152

Current Market Outlook


We don’t want to repeat ourselves too much, but the environment has remained mostly the same during the past few weeks. First, overall, this is a bull market that’s likely to carry nicely higher when looking out a few months; there remains plenty of doubt and uncertainty, which is (contrarily) a good thing. Second, though, making money has become trickier—there are far more news-driven moves, buying pressures seem to come and go for many leading stocks (as opposed to the sustained upmoves seen earlier this year) and there’s no question most indexes are extended to the upside. That’s no reason to get overly worried (most stocks are still acting normally), and in fact, we’re nudging our Market Monitor up a notch this week as leading stocks have perked up a bit. But it remains important to look for good entry points, honor your stops and take some partial profits when the opportunity arises.

Encouragingly, this week’s list is very broad, with all different types of sectors, sizes and growth/value outlook represented. There are many good names to choose from, but our Top Pick is Horizon Pharmaceuticals (HZNP), which has huge earnings estimates and a tight chart.

Stock Name	Price	Buy Range	Loss Limit
Anaplan (PLAN)	61.25	59.5-62.5	53-55
Enphase Energy (ENPH)	77.23	72-76	64-66
FedEx (FDX)	219.84	206-213	184-188
Futu Holdings (FUTU)	32.17	30-32	26-27
Horizon Therapeutics (HZNP)	75.12	72-76	65-67
Lithia Motors Inc. (LAD)	248.96	238-250	215-220
Roku, Inc. (ROKU)	173.48	167-174	147-150
Salesforce.com (CRM)	272.65	263-273	233-239
Trupanion (TRUP)	62.73	60.5-63	53-55
Tupperware Brands (TUP)	16.29	14.5-15.5	12-12.5

Thank you for subscribing to the Cabot Undervalued Stocks Advisor. We hope you enjoy reading the June 2021 issue.

Many of our recommended names are at or approaching our price targets. The decision to keep or sell isn’t easy in a strong market. Our patience is being tested (in a good way).



Few people would attend the Indy 500 and think about investment horizons. But, such is the world that your chief analyst inhabits. The race itself was a thrill, as always. It was also a showcase of different investment horizons, featuring that of new track owner Roger Penske.



Earning season has concluded, so it has been a slow period for company-specific news, although Tyson (TSN) announced the surprise departure of its new CEO. Some companies, including Bristol-Myers (BMY), Cisco (CSCO) and Dow (DOW) are presenting at various investor conferences. These can be worthwhile to watch and are free to the public, with replays available in addition to the live presentations.



Please feel free to send me your questions and comments. This newsletter is written for you and the best way to get more out of the letter is to let me know what you are looking for.



I’m best reachable at Bruce@CabotWealth.com. I’ll do my best to respond as quickly as possible.



Thanks!