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The Emerging Markets Timer is now fully negative, as the iShares Emerging Markets Fund (EEM) has gapped down to near its November lows. Our only additional move today is to move Pampa Energia (PAM) to a Hold.

We are smack dab in the heart of earnings season for this portfolio. With the market sputtering along without much conviction, individual stocks are taking center stage, and earnings are a major part of that.

Quarterly and annual earnings will be reported this week from AbbVie Inc. (ABBV), Alexandria Real Estate Equities (ARE), American Tower Corporation (AMT), Marathon Petroleum Corporation (MPC), and Qualcomm Inc. (QCOM). The reports could be a hugely important factor in determining the near-term direction of these stocks.

This note includes our review of earnings from Brookfield Reinsurance (BAMR).

There were no ratings changes or price target changes this week.



This will be a brief note this week. It’s been a busy earnings season and we’re on the road this weekend in upstate New York. My oldest son will be a senior in high school starting in a few weeks and is knee-deep in the college application process. Visiting a dozen or so schools is, of course, part of this process.

This week’s Friday Update includes comments on our companies. There were no ratings changes or earnings reports.

Tyler Laundon, Chief Analyst of Cabot Small-Cap Stocks and Cabot Early Opportunities speaks about Software Stocks.

Among the topics he covers:
* A look at current software stock valuations
* Software in context: Trends over the last 25 years
* Software today: More options than ever
* Software stock opportunities for 2021

Household debt is rising, and consumers are feeling the squeeze of higher interest rates everywhere, from mortgages to auto loans to credit cards. In this month’s issue we’ll share ten warning signs that signal financial trouble ahead and the ten bad financial habits you need to drop now to avoid it.

Current Market Outlook


Beneath the market’s surface, there’s been lots of rotation and volatility, with buyers focusing on the laggards of late last year (especially the big-cap growth stocks), while the strong materials and transportation sectors continue to consolidate. (Even as the major indexes probe new high ground, the number of stocks hitting new highs is way down versus a few weeks ago.) That’s something to keep an eye on, but the trends of the major indexes and most stocks are still up, sellers have been unable to put much of a dent in the market despite the huge post-election run and few stocks have broken down. Until that changes, we’re keeping our Market Monitor in bullish territory, though it’s probably best to be a bit more discerning on the buy side, looking for tight setups and big volume breakouts.

Tonight’s list remains heavy on turnaround stocks, especially those in cyclical industries; the odds continue to favor higher prices as these stocks consolidate their strong post-election gains. Our Top Pick is AK Steel (AKS)—you can buy a little here and look to add shares on a powerful move to new highs.

Stock Name	Price	Buy Range	Loss Limit
AK Steel Holding (AKS)	0.00	9.9-10.4	9.0-9.3
Atwood Oceanics (ATW)	0.00	12.5-13.5	11-11.5
CF Industries (CF)	45.23	32-33	29-30
Clovis Oncology (CLVS)	0.00	45-48	41-43
Grand Canyon Education (LOPE)	121.03	57-59	54-55
Greenbrier (GBX)	57.73	44.5-47	40.5-42
Lions Gate Entertainment (LGF-A)	0.00	25-27	23-24
Oil States International (OIS)	0.00	39-41	36-37
Shopify (SHOP)	585.00	45-47	42-43
SVB Financial Group (SIVB)	0.00	170-175	157-160

Current Market Outlook


The major indexes are getting sloppier, with the S&P 500 and NYSE Composite now a couple of percent below their 50-day lines, and many individual stocks and sectors are getting hit. It’s not pretty, but this remains a split tape—the Nasdaq is holding up relatively well, for instance, and we’ve seen many growth stocks do OK in recent days, even as the market as a whole has dropped. Overall, we’re sticking with a neutral stance, which means holding some cash and being very selective on the buy side. It’s OK to pull the trigger if you see a good set-up or two, but honor your stops and don’t be afraid to book partial profits on the way up.

This week’s list is skewed toward the growth side of the equation, but has a mix of stocks that are in established uptrends and others that are just getting going. Our Top Pick is GoPro (GPRO), which has shown enough strength to tell us the March low was the bottom. Buy on dips and use a loose stop.

Stock Name	Price	Buy Range	Loss Limit
Zoës Kitchen (ZOES)	0.00	35.5-37.5	33.5-34
Zebra Technologies (ZBRA)	154.94	109-112	100-101
Skechers (SKX)	0.00	102-105	91-93
Shake Shack (SHAK)	92.08	73-76	66-68
Hologic (HOLX)	0.00	34.5-36	33-33.5
GoPro, Inc. (GPRO)	0.00	56-59	51-52
Global Payments Inc. (GPN)	0.00	104-105	98-99
Dexcom (DXCM)	421.36	70-72	65-66
Axalta Coating (AXTA)	0.00	34-35	31-32
AMAG Pharm. (AMAG)	0.00	68-70	62-63

Trouble usually comes from where investors least expect it, and it’s fair to say that Cyprus was not on most radar screens before this weekend. The much-publicized shock brought up fears of a 2008-style bank run, but it’s important to keep your feet on the ground and stick with the evidence. Right now, the trend is still up, and most stocks are in good shape; we did see some churning among the most extended stocks last week, so they might need a break, but we haven’t seen much abnormal action that occurs when the sellers take control. If that changes, we’ll let you know, but right here we’re keeping our Market Monitor in bullish territory—further short-term weakness could be in store, but the odds continue to favor higher prices in the weeks ahead.

This week’s list has a bunch of charts that look very strong and most are not overly extended to the upside. Our top pick is from the energy patch—Tesoro (TSO) is part of the very strong refining group, and the stock has eased back to support after a powerful run in February. We think it’s a good buy around here.

Stock Name	Price	Buy Range	Loss Limit
Tesoro (TSO)	0.00	54-56	-
Parexel Corp. (PRXL)	0.00	36-38	-
ServiceNow (NOW)	341.86	35-36	-
Netflix, Inc. (NFLX)	423.92	176-190	-
Lions Gate Entertainment Corp. (LGF)	0.00	21-22.5	-
Delta Air Lines (DAL)	54.28	14.5-15.5	-
Cabot Oil & Gas (COG)	0.00	63-66	-
Celgene (CELG)	0.00	109-113	-
Citigroup Inc. (C)	0.00	44-46	-
Aruba Networks (ARUN)	0.00	24.5-26	-

What a rally off the bottom! After flirting with a severe correction and possibly a bear market, stocks have soared over the past two weeks. The S&P 500 is now down less than 3% YTD. What happened?

Panic waned and investors realized that the economy is still strong, interest rates are still low, and money has no place else to go but stocks to fetch a decent return. The initial panic from the Russia/Ukraine war subsided. Then the Fed hiked rates by a measly 0.25% and pleased short-sighted investors.

It’s earnings season. And it’s a weird one.

The New Year promises to be a great one for dividend stocks. After underperforming the market in 2020, the stars are aligning to make 2021 the year of the dividend.

The distribution of the coronavirus vaccine promises to bring this pandemic to an end and unleash a full and robust recovery in 2021. Energy stocks that had been neglected in the market recovery have caught fire in anticipation of a full recovery in 2021.



A huge and overdue rally in the sector has paused temporarily ahead of a very promising year, giving us an opportunity to get into one of the very best stocks in the sector at a still cheap price.



Global energy giant Chevron (CVX) currently offers the rare combination of great value and momentum, as well as a fat yield. The stock has already moved higher, the rally has a long way to go.

The market is stuck in an intermediate-term trading range, and could be for a while. But with no recession in sight, you should be buying stocks now.

As central banks around the globe aggressively raised interest rates, the stock market had its second straight awful week of trading. The S&P 500 fell 4.6%, the Dow lost 4%, and the Nasdaq continued its ugly slide, falling another 5.1%.

As central banks around the globe aggressively raised interest rates, the stock market had its second straight awful week of trading. The S&P 500 fell 4.6%, the Dow lost 4%, and the Nasdaq continued its ugly slide, falling another 5.1%.

The big news of the week is, of course, rising risks in the financial system following the failures of several smaller regional banks in the U.S. as well as instability in some larger institutions abroad, mainly Credit Suisse (CS). We also received February inflation data in the form of CPI (Tuesday) and PPI (Wednesday), which continue to show that inflation is moderating but isn’t collapsing. The February PPI report showed a 0.1% decline versus estimates for a 0.3% increase.