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The three leading indexes again made a run at new highs last week as the S&P 500 gained 1.75%, the Dow rallied 0.7% and the Nasdaq added 2.88%.

The market surge has leveled off. The expectation debate about peak interest rates, inflation, and recession continues. And now, it’s another earnings season.

The S&P 500 pulled back during the first trading week of the year after a two-month, 15% spike. In the second week, the index gained back everything it lost the first week. He we are again on the cusp of the all-time high set about two years ago.

It’s earnings season again! And this one should be more important than most.

Earnings are, of course, a big deal for the individual company. But in addition to company-specific fundamentals, Wall Street will be carefully watching what company earnings indicate about the macro environment.

Cultural and political trends can make buying cannabis stocks on a pullback a profitable endeavor, but it takes a combination of discipline and the right entry points.

WHAT TO DO NOW: Most of the evidence is still bullish, both for the overall market and for leading stocks, but as the January wobbles have continued, some air pockets are emerging, with today being a tough day for growth stocks. Today we’re going to sell half of Duolingo (DUOL), which is breaking support and has given back its post-earnings gains, while placing our half-sized stake of ProShares Russell 2000 Fund (UWM) on Hold. Our cash position will be around 26%.

In investing, like football, competition is tough, rivalries are strong and the money and stakes are high. So, what lessons can investors learn from the NFL Playoffs?

In this week’s video, Mike Cintolo talks about the market’s under-the-surface improvement that he’s seeing; no indicators have changed, which will need to happen for him to extend his line in a big way, but there’s no question most stuff has seen improvement and more stocks are beginning to act properly. Mike did a little buying this week and is hoping to add more should the market be able to build on the recent action.

Moving Ironwood Pharmaceuticals (IRWD) to Sell

Net-net, it’s been a quiet week for the major indexes, with most up or down less than 1%. That said, there are some interesting things happening under the market’s surface.

After a sluggish start to the year, stocks have broken to new highs, with not even diminished expectations of Fed rate cuts able to slow them. Is it the next leg up in this still-nascent bull market? Perhaps. But in case there’s some earnings season turbulence ahead, today we add a low-risk value stock that’s been a favorite of Cabot Value Investor Chief Analyst Bruce Kaser for quite some time.

Details inside.

Cannabis stocks are up sharply – 20% or more – since I suggested buying them on weakness in a Cabot Cannabis Investor update sent to you on January 10.

Using my two favorite exchange-traded funds (ETFs) as proxies for the sector, the AdvisorShares Pure US Cannabis (MSOS) has advanced 20%, and AdvisorShares MSOS 2X Daily (MSOX) is up 37%.

This week Chris and Brad talk about the latest Chinese GDP numbers and whether it’s safe to invest in China, Tesla’s earnings release, and what they’re seeing with Regional banks now that they’re reporting. After that, they break down FAANG stocks, their popular ascent as market shorthand, and whether Microsoft is “sexy” enough to sit at the cool kids’ table.

Other than the buyout of Kaman (KAMN), it’s been a relatively quiet week for company-specific news.


Regarding Kaman, the company announced that it will be taken private for $1.8 billion, or $46/share, a huge 100%-plus premium over the prior day’s closing price. The market has had little confidence in Kaman’s turnaround, despite what we saw as evidence that impressive changes are underway, led by its capable new CEO. The huge premium is at a discount to our $57 price target, but we’re fine with the deal as it produces a reasonable return, in cash, today, compared to a slog for a year or more while the turnaround plays out.

Despite some weakness early in the week, the indexes bounced back in a big way, closing at new all-time highs. For the week the S&P 500 gained 1%, the Dow added 1.07%, and the Nasdaq soared higher by 2%.

Despite some weakness early in the week, the indexes bounced back in a big way, closing at new all-time highs. For the week the S&P 500 gained 1%, the Dow added 1.07%, and the Nasdaq soared higher by 2%.

After the stellar finish to last year, the market rally is continuing, sort of.

The S&P 500 is up for the year. But it’s only up 1.69% and participation is far less broad than it was. Technology stocks are driving the market higher but most of the other sectors are down. The AI euphoria is continuing, but the interest rate rally is gone.

A famed economist just outlined his “Roaring 2020s” scenario for the U.S. economy, and this stock market trend is powering it.