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Despite a quiet tone for much of last week, markets ended on a modestly upbeat note as interest rate-cut optimism firmed. Tech and growth names helped push the market higher on hopes the Federal Reserve will ease soon, while small caps and cyclicals got a lift on improving sentiment.

Today we’re jumping into an emerging precision oncology company that is on the cusp of a major Phase 3 data release for a potential best-in-class treatment for rare eye cancers.

The company also has a stacked pipeline of other potential assets and has teamed up with some of the best in the business as it looks to transition from a clinical-stage company to a full-on commercial success.

Suffice it to say, the risks are somewhat higher with a stock like this, given that FDA approval, or denial, will have a major short-term impact on share price performance.

All the details are inside the December Issue of Cabot Small-Cap Confidential.

Thank goodness; the shutdown is over!

And that agreement (although not really agreeing on much!) has helped the markets to continue their upward momentum, albeit with a few hiccups. All eyes are on the Fed, as I write this, with expectations that it will once again lower rates by a quarter of a point.

It was a mixed week in the market, with the Nasdaq and many big-cap, AI-type names stagnating, while the broad market did very well, as small- and mid-cap indexes up 2.5% to 3.5% on the week, with more stocks hitting new highs, and while cyclical and some defensive names did improve, some non-AI growth areas that mostly sat out the past nine to 12 months did as well.

The market is close to the high, and all eyes are on the Fed.

The market has priced in a 0.25% fed funds rate cut already. It could get ugly if the Fed doesn’t cut the rate on Wednesday. But that is unlikely. The rally in interest rate-sensitive stocks took place over the past few weeks. Now, those stocks are pulling back as investors fret over what the Chairman might say about future rate cuts in the minutes following the rate cut announcement.

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.

*Note: Your next issue of Cabot Options Trader will arrive next Tuesday, January 20 due to the market holiday next Monday, January 19 in observance of Martin Luther King, Jr. Day.

A broad-based rally carried U.S. equities to fresh record territory last week as investors cheered softer labor data and tilted back toward risk. For the week, the S&P 500 advanced by 1.8%, the Dow climbed 3%, the Nasdaq rose 1.9%, and the Russell 2000 led the charge, adding 4.6%.

The age-old value vs. growth stocks argument misses the point. For a diversified portfolio, you need both. And right now, value stocks are outpacing their growthier brethren.

Following yesterday’s after-hours preliminary Q4 earnings results, we are selling Beta Bionics (BBNX) today.

*Note: Your next issue of Cabot Options Trader will arrive next Tuesday, January 20 due to the market holiday next Monday, January 19 in observance of Martin Luther King, Jr. Day.

A broad-based rally carried U.S. equities to fresh record territory last week as investors cheered softer labor data and tilted back toward risk. For the week, the S&P 500 advanced by 1.8%, the Dow climbed 3%, the Nasdaq rose 1.9%, and the Russell 2000 led the charge, adding 4.6%.

WHAT TO DO NOW: While there’s been some modest improvement here and there, growth stocks continue to be unable to get going in any real way, with the Nasdaq stuck in the mud and our Aggression Index approaching multi-month lows. We already have a lot of cash, but today we’re pulling the plug on JFrog (FROG), which continues to have great fundamentals, but the stock (and the software sector overall) continues to sag. We’ll sell here and make sure a disappointing situation doesn’t get much worse.

The S&P 500 started the week on another up note. But the index return is deceiving.

The S&P is being pulled higher by a handful of technology stocks. But 400 of the 500 stocks and nine of the 11 sectors were lower on Monday at midday. The earnings season so far has reaffirmed a positive outlook for artificial intelligence investments. That helps drive the index higher as technology stocks represent more than a third.

The market’s momentum continued last week as a benign inflation print and another round of solid earnings backed up bullish sentiment—with virtually all of the major indexes moving higher. For the week the S&P 500 rose 0.7%, the Dow Jones Industrial Average advanced 0.8%, the Nasdaq Composite jumped 2.2%, but the Russell 2000 slipped 1.4%.

Microsoft (MSFT) and Alamos Gold (AGI) Report