Issues
This is the worst market we’ve seen in a while. And the ugliness could last a while.
Tariff talk is all the rage. The economy is slowing. Nobody is sure about inflation or interest rates. It all adds uncertainty. The market had been riding high for more than two years. A comeuppance has arrived. How long will it last and how deep will it be?
During times of maximum uncertainty like this, healthcare stocks are a great place to be. That was the topic of last month’s exquisitely crafted issue. But there is another industry with both defensive and growth characteristics that’s ideal for uncertain times – garbage.
We live in the garbage capital of the world. This country generated 292 million tons of waste in 2018, up from 251 tons in 2012, and nearly double the waste produced in 1980. That’s enough waste to produce a pile long enough to go to the moon and back – 29 times. And that’s every single year. Waste services are big business. In 2023, the U.S. waste management services industry generated $145 billion in revenue. That was up from $137 billion the prior year and that number is likely to keep rising.
Garbage will continue to pile up regardless of where interest rates go, the level of economic growth, or the fallout from tariffs. The market could soar, or the world could go to Hell in a handbag. Either way my wife will nag me every week to take out the garbage.
Bank on a company with certain earnings and revenue in uncertain times. Defensive stocks tend to outperform during and after volatile markets. In this issue, I highlight a company that is the unquestioned leader in waste services. The stock has a strong track record which could get even better in the years ahead.
Tariff talk is all the rage. The economy is slowing. Nobody is sure about inflation or interest rates. It all adds uncertainty. The market had been riding high for more than two years. A comeuppance has arrived. How long will it last and how deep will it be?
During times of maximum uncertainty like this, healthcare stocks are a great place to be. That was the topic of last month’s exquisitely crafted issue. But there is another industry with both defensive and growth characteristics that’s ideal for uncertain times – garbage.
We live in the garbage capital of the world. This country generated 292 million tons of waste in 2018, up from 251 tons in 2012, and nearly double the waste produced in 1980. That’s enough waste to produce a pile long enough to go to the moon and back – 29 times. And that’s every single year. Waste services are big business. In 2023, the U.S. waste management services industry generated $145 billion in revenue. That was up from $137 billion the prior year and that number is likely to keep rising.
Garbage will continue to pile up regardless of where interest rates go, the level of economic growth, or the fallout from tariffs. The market could soar, or the world could go to Hell in a handbag. Either way my wife will nag me every week to take out the garbage.
Bank on a company with certain earnings and revenue in uncertain times. Defensive stocks tend to outperform during and after volatile markets. In this issue, I highlight a company that is the unquestioned leader in waste services. The stock has a strong track record which could get even better in the years ahead.
Other stocks are picking up the slack while technology is wobbling. The grossly lopsided performance that dominated this market for so long couldn’t last. And there’s more to the story than just sector rotation. Earnings are catching up.
I’m still bullish on the portfolio AI stocks. But other sectors of the market are overdue for stronger relative performance. These stocks are taking over and likely to post much better relative performance over the course of the year.
Healthcare is perhaps the best of all sectors that aren’t technology. It’s an all-weather industry that offers a very seldom-found combination of safety and growth. Plus, these stocks are poised ahead of the megatrend of the rapidly aging population. Healthcare demand is skyrocketing. And the best stocks should get a great ride.
In this issue, I highlight four healthcare stocks currently in the portfolio. Despite the lopsided bull market returns so far, a couple of these stocks have been among the very best performers. And now they should be poised for a strong run in 2025.
I’m still bullish on the portfolio AI stocks. But other sectors of the market are overdue for stronger relative performance. These stocks are taking over and likely to post much better relative performance over the course of the year.
Healthcare is perhaps the best of all sectors that aren’t technology. It’s an all-weather industry that offers a very seldom-found combination of safety and growth. Plus, these stocks are poised ahead of the megatrend of the rapidly aging population. Healthcare demand is skyrocketing. And the best stocks should get a great ride.
In this issue, I highlight four healthcare stocks currently in the portfolio. Despite the lopsided bull market returns so far, a couple of these stocks have been among the very best performers. And now they should be poised for a strong run in 2025.
While the outlook for 2025 is positive, things are changing.
Sure, this bull market has driven the S&P 500 nearly 70% higher. But most of the gains are from technology stocks. Until this past summer, nearly all the bull market returns were driven by technology. The rest of the market had done very little.
But the rest of the market is waking up. While artificial intelligence (AI) will likely continue to be a powerful growth catalyst, its dominance over everything else might not be as pronounced in 2025 as it has been in the past. Earnings for other stocks are catching up.
The earning growth difference between the “Magnificent 7” companies and the other 493 S&P 500 companies is expected to plummet from 27.8% last year to 8.3% this year. The rest of the market is cheap, has momentum, and will likely get hot this year as stocks experience an earnings growth spike that could last for years.
In this issue, I highlight a healthcare stock that looks highly promising in 2025. It is poised in front of the aging population megatrend, which makes a successful pick so much easier, and it will likely experience a sizable earning spike in the years ahead. It is an existing portfolio stock of which half the shares were sold last year. It’s a great time to buy back the other half.
Sure, this bull market has driven the S&P 500 nearly 70% higher. But most of the gains are from technology stocks. Until this past summer, nearly all the bull market returns were driven by technology. The rest of the market had done very little.
But the rest of the market is waking up. While artificial intelligence (AI) will likely continue to be a powerful growth catalyst, its dominance over everything else might not be as pronounced in 2025 as it has been in the past. Earnings for other stocks are catching up.
The earning growth difference between the “Magnificent 7” companies and the other 493 S&P 500 companies is expected to plummet from 27.8% last year to 8.3% this year. The rest of the market is cheap, has momentum, and will likely get hot this year as stocks experience an earnings growth spike that could last for years.
In this issue, I highlight a healthcare stock that looks highly promising in 2025. It is poised in front of the aging population megatrend, which makes a successful pick so much easier, and it will likely experience a sizable earning spike in the years ahead. It is an existing portfolio stock of which half the shares were sold last year. It’s a great time to buy back the other half.
It’s been a great year in the market with the S&P up 27%. And there is good reason for optimism about 2025.
We are in a bull market that began in October of 2022. Bull markets don’t usually run out of gas after just two years, especially recent ones. The Fed has begun a rate-cutting cycle that is likely to last for the next two years. Plus, the economy is solid and expected to get stronger. Rate cuts in a strong economy are unusual, but the combination should be great for stocks.
One sector may have a better 2025 prognosis than the overall market: Financial stocks have been on a tear since the summer. The Financial Select Sector SPDR Fund (XLF) is up 33% YTD and 22% since early August. Despite the recent spike, many financial stocks are still cheap after a decade and a half of underperformance.
Financial stocks are dependent on yield spreads, economic growth, and relaxed regulations. All those areas are improving or expected to improve as a result of the election.
In this issue, I highlight one of the highest-growth companies in an industry that is on the rise. It is the leading all-digital bank in the country. Unlike many other industry-leading stocks, it is still well below the high because of a recent temporary stumble which has likely only delayed its price spike.
We are in a bull market that began in October of 2022. Bull markets don’t usually run out of gas after just two years, especially recent ones. The Fed has begun a rate-cutting cycle that is likely to last for the next two years. Plus, the economy is solid and expected to get stronger. Rate cuts in a strong economy are unusual, but the combination should be great for stocks.
One sector may have a better 2025 prognosis than the overall market: Financial stocks have been on a tear since the summer. The Financial Select Sector SPDR Fund (XLF) is up 33% YTD and 22% since early August. Despite the recent spike, many financial stocks are still cheap after a decade and a half of underperformance.
Financial stocks are dependent on yield spreads, economic growth, and relaxed regulations. All those areas are improving or expected to improve as a result of the election.
In this issue, I highlight one of the highest-growth companies in an industry that is on the rise. It is the leading all-digital bank in the country. Unlike many other industry-leading stocks, it is still well below the high because of a recent temporary stumble which has likely only delayed its price spike.
The election of Donald Trump has altered the trajectory of the economy and the market.
Investors perceive his election will deliver stronger economic growth, primarily through deregulation and tax cuts. Although interest rates spiked higher on the expectation of a stronger economy, the market views the revised prognosis as overwhelmingly bullish, so far.
The new administration will employ drastically different policies that will have a significant effect on different sectors and can’t be ignored. The most obvious sector beneficiary of the new administration is energy.
A huge beneficiary will be natural gas exports. The U.S. has recently become the world’s second-largest exporter of natural gas. Exporters ideally sell cheap American gas overseas where it fetches a much higher price. More production and cheaper domestic prices are ideal for exporters. At the same time, the new administration is likely to encourage as much natural gas exporting as possible.
In this issue, I highlight a company that runs the largest liquid natural gas (LNG) export facility in the country. It is a subsidiary of existing portfolio position Cheniere Energy (LNG), which is up 15% since the election. It pays a huge income and still sells at a reasonable price.
Investors perceive his election will deliver stronger economic growth, primarily through deregulation and tax cuts. Although interest rates spiked higher on the expectation of a stronger economy, the market views the revised prognosis as overwhelmingly bullish, so far.
The new administration will employ drastically different policies that will have a significant effect on different sectors and can’t be ignored. The most obvious sector beneficiary of the new administration is energy.
A huge beneficiary will be natural gas exports. The U.S. has recently become the world’s second-largest exporter of natural gas. Exporters ideally sell cheap American gas overseas where it fetches a much higher price. More production and cheaper domestic prices are ideal for exporters. At the same time, the new administration is likely to encourage as much natural gas exporting as possible.
In this issue, I highlight a company that runs the largest liquid natural gas (LNG) export facility in the country. It is a subsidiary of existing portfolio position Cheniere Energy (LNG), which is up 15% since the election. It pays a huge income and still sells at a reasonable price.
There is a colossal housing shortage in this country.
A decade of underbuilding in the housing industry following the financial crisis has left the industry unable to meet the needs of the growing population. It is estimated that the demand for homes exceeds the current national supply by a whopping 4.5 million.
The jilted supply/demand dynamic has caused the median U.S. home price to soar a staggering 40% just since the pandemic. In addition, mortgage rates have soared to the highest level in two decades. The prices and mortgage rates are making housing unaffordable for vast numbers of potential buyers. Sellers are unwilling to trade up and get a higher mortgage rate.
There aren’t enough new homes, and existing homes aren’t coming on the market either. Buyers can’t buy and sellers won’t sell. But there is reason to believe the housing problems will get a lot better in the years ahead.
While the situation is likely to improve, the supply/demand imbalance will likely remain for several years. That’s a problem for the housing market and economy to work through. But it’s good news if you’re a homebuilder. New homes should be in high demand for years to come, and sales should increase with the improving conditions.
In this issue, I highlight the premier luxury home builder in the U.S. The stock has the best track record of all large homebuilders, and the company is in an ideal position to benefit from high demand and increasing buying in the years ahead.
A decade of underbuilding in the housing industry following the financial crisis has left the industry unable to meet the needs of the growing population. It is estimated that the demand for homes exceeds the current national supply by a whopping 4.5 million.
The jilted supply/demand dynamic has caused the median U.S. home price to soar a staggering 40% just since the pandemic. In addition, mortgage rates have soared to the highest level in two decades. The prices and mortgage rates are making housing unaffordable for vast numbers of potential buyers. Sellers are unwilling to trade up and get a higher mortgage rate.
There aren’t enough new homes, and existing homes aren’t coming on the market either. Buyers can’t buy and sellers won’t sell. But there is reason to believe the housing problems will get a lot better in the years ahead.
While the situation is likely to improve, the supply/demand imbalance will likely remain for several years. That’s a problem for the housing market and economy to work through. But it’s good news if you’re a homebuilder. New homes should be in high demand for years to come, and sales should increase with the improving conditions.
In this issue, I highlight the premier luxury home builder in the U.S. The stock has the best track record of all large homebuilders, and the company is in an ideal position to benefit from high demand and increasing buying in the years ahead.
We are in the early stages of a new cycle in the market.
The environment is changing from one of high inflation and high interest rates to one of falling inflation and interest rates in a weakening economy. And it is unlikely to be a mere short-term gyration but rather the beginning of a new environment that should last for some time.
Interest rates may fall quickly or more slowly depending on whether the economy remains buoyant or slips towards recession. But rates will fall much more significantly than they have in years.
The cycle reversal will create new winners and losers. Certain interest rate-sensitive stocks have been laggards for a long time and have a lot of catching up to do. They are still cheap, high yielding, and now have momentum.
In this issue, I highlight a great monthly income stock. The yield is massive, and it provides a high income in an uncertain market. The stock also can provide great price performance when the interest rate cycle goes its way. This point in the cycle provides a great opportunity to get a high income and total return on the right side of a pronounced market shift ahead.
The environment is changing from one of high inflation and high interest rates to one of falling inflation and interest rates in a weakening economy. And it is unlikely to be a mere short-term gyration but rather the beginning of a new environment that should last for some time.
Interest rates may fall quickly or more slowly depending on whether the economy remains buoyant or slips towards recession. But rates will fall much more significantly than they have in years.
The cycle reversal will create new winners and losers. Certain interest rate-sensitive stocks have been laggards for a long time and have a lot of catching up to do. They are still cheap, high yielding, and now have momentum.
In this issue, I highlight a great monthly income stock. The yield is massive, and it provides a high income in an uncertain market. The stock also can provide great price performance when the interest rate cycle goes its way. This point in the cycle provides a great opportunity to get a high income and total return on the right side of a pronounced market shift ahead.
The explosive growth of artificial intelligence, electric cars, and manufacturing is causing an explosion in the demand for electricity in this country.
After nearly two decades of stagnant growth, electricity demand is expected to soar in the years ahead. This year alone, electricity demand is growing 81% more than it did last year. Electricity demand is expected to grow at nearly twice the past rate for the rest of this decade.
The new demand transforms certain previously stodgy and boring utility stocks into growth investments.
In this issue I highlight one of the very best and fastest-growing electricity producers in the country. This company is in an ideal position to benefit from the increasing electricity demand from data centers and other sources. AI may be the cutting edge of technological innovation. But it doesn’t work without electricity. While most investors are running around chasing the same AI stocks, we can reap the rewards of the tremendous new opportunity from Thomas Edison’s invention.
After nearly two decades of stagnant growth, electricity demand is expected to soar in the years ahead. This year alone, electricity demand is growing 81% more than it did last year. Electricity demand is expected to grow at nearly twice the past rate for the rest of this decade.
The new demand transforms certain previously stodgy and boring utility stocks into growth investments.
In this issue I highlight one of the very best and fastest-growing electricity producers in the country. This company is in an ideal position to benefit from the increasing electricity demand from data centers and other sources. AI may be the cutting edge of technological innovation. But it doesn’t work without electricity. While most investors are running around chasing the same AI stocks, we can reap the rewards of the tremendous new opportunity from Thomas Edison’s invention.
Clean energy is the future. But not for a while.
This country and the world still rely heavily on fossil fuels for more than 80% of energy needs, and these conventional energy sources will likely remain dominant for decades. Meanwhile, many stocks of companies that benefit have strong earnings and great value.
Fossil fuel proportions are expected to move toward natural gas in the years ahead. A recent study estimates that global natural gas demand will soar 34% between 2022 and 2050 with the strongest growth in the natural gas realm to be liquid natural gas (LNG), with demand expected to more than double in the same time frame.
In this issue, I highlight one of the best natural gas companies on the market. It is a newly formed company in the business of exporting abundant and cheap American natural gas overseas. It’s big business. In a short time, this company has become one of the world’s largest natural gas exporters.
This country and the world still rely heavily on fossil fuels for more than 80% of energy needs, and these conventional energy sources will likely remain dominant for decades. Meanwhile, many stocks of companies that benefit have strong earnings and great value.
Fossil fuel proportions are expected to move toward natural gas in the years ahead. A recent study estimates that global natural gas demand will soar 34% between 2022 and 2050 with the strongest growth in the natural gas realm to be liquid natural gas (LNG), with demand expected to more than double in the same time frame.
In this issue, I highlight one of the best natural gas companies on the market. It is a newly formed company in the business of exporting abundant and cheap American natural gas overseas. It’s big business. In a short time, this company has become one of the world’s largest natural gas exporters.
The market has been terrific. And it will probably finish the year higher than it is now. But there is reason for caution.
Because of sticky inflation, interest rates remain near the highest levels in 20 years and may continue to stay high or go higher, until they drive the economy down. A hugely contentious presidential election is about to take place. And there are two significant global wars going on.
Steep selloffs are common even in markets that rise over time. The S&P 500 doubled over the last five years. But it crashed 30% in record time at the onset of the pandemic in 2020. There was also a bear market in 2022 during which the S&P fell over 20% and the Nasdaq plunged well over 30%. Of course, most stocks were down a lot more than the indexes. If you targeted some of the very best stocks at fire sale prices you could have gotten amazing returns.
In this issue, I highlight a way to target the purchase of the very best stocks at fire sale prices amid market turmoil that may occur from the potentially market-roiling issues this year or next. Most investors don’t buy when the market is crashing because it’s natural not to want to try and catch a falling knife. But there’s a way to take emotion out of the equation and calmly plot a way to fantastic returns.
Because of sticky inflation, interest rates remain near the highest levels in 20 years and may continue to stay high or go higher, until they drive the economy down. A hugely contentious presidential election is about to take place. And there are two significant global wars going on.
Steep selloffs are common even in markets that rise over time. The S&P 500 doubled over the last five years. But it crashed 30% in record time at the onset of the pandemic in 2020. There was also a bear market in 2022 during which the S&P fell over 20% and the Nasdaq plunged well over 30%. Of course, most stocks were down a lot more than the indexes. If you targeted some of the very best stocks at fire sale prices you could have gotten amazing returns.
In this issue, I highlight a way to target the purchase of the very best stocks at fire sale prices amid market turmoil that may occur from the potentially market-roiling issues this year or next. Most investors don’t buy when the market is crashing because it’s natural not to want to try and catch a falling knife. But there’s a way to take emotion out of the equation and calmly plot a way to fantastic returns.
The market has rallied for more than a year in the happy space between inflation and recession. But that dynamic is unlikely to persist. Amid persistent inflation, it is likely that the market will have to contend with high interest rates or a faltering economy. Each one is problematic.
In a flatter or faltering market, dividends provide a bigger part of total returns. Let’s get ahead of the curve and get a big fat yield.
In this issue, I highlight a stock with a massive dividend yield that has shown good price stability for several years. The company can also thrive amidst inflation and high or rising interest rates and can provide a high income return even if the market struggles through an inflation/recession catch-22.
In a flatter or faltering market, dividends provide a bigger part of total returns. Let’s get ahead of the curve and get a big fat yield.
In this issue, I highlight a stock with a massive dividend yield that has shown good price stability for several years. The company can also thrive amidst inflation and high or rising interest rates and can provide a high income return even if the market struggles through an inflation/recession catch-22.
While the financial news obsesses over what the Fed might have vaguely implied in the latest statement, the world is morphing into a different place. The demographic of humanity is rapidly transforming in a way that will massively affect the flow of money for the rest of our lives. The world is currently undergoing a technological revolution that is transforming society and everyday life.
The aging population and the technological revolution are megatrends that will dominate the investment landscape for years to come regardless of what the Fed does, or GDP in the next few quarters, or whoever gets elected president. It’s not an accident that the best performing stocks in the Cabot Dividend Investor portfolio are in healthcare and technology. Nor will it be an accident that these same stocks continue to dominate from this point forward.
In this issue, I highlight the massive opportunity to position yourself in front of a tsunami that could provide the best investments of your lifetime.
The aging population and the technological revolution are megatrends that will dominate the investment landscape for years to come regardless of what the Fed does, or GDP in the next few quarters, or whoever gets elected president. It’s not an accident that the best performing stocks in the Cabot Dividend Investor portfolio are in healthcare and technology. Nor will it be an accident that these same stocks continue to dominate from this point forward.
In this issue, I highlight the massive opportunity to position yourself in front of a tsunami that could provide the best investments of your lifetime.
Updates
The market has been recovering since it fell into correction territory earlier this month. The S&P was up for the week last week for the first time in a month and Monday was a strong day. But we might not be out of the woods yet.
Even if the bottom is in (which it might not be), it is unlikely that stocks can generate lasting upside traction until there is more clarity on the tariff situation. But the market really hasn’t been as bad as it might seem.
Even if the bottom is in (which it might not be), it is unlikely that stocks can generate lasting upside traction until there is more clarity on the tariff situation. But the market really hasn’t been as bad as it might seem.
Last week the S&P 500 index plunged into correction territory. The Nasdaq was already there. Has the market bottomed out or is there more downside to go?
It’s been a while since selling has gotten this ugly. The last market correction was in October of 2023. This is the second of this bull market, which began in October of 2022. That’s not unusual. Corrections are normal in a bull market. The S&P had run up about 75% in a little over two years and was due for a consolidation, especially the technology sector. But is that all this is or is it something more?
It’s been a while since selling has gotten this ugly. The last market correction was in October of 2023. This is the second of this bull market, which began in October of 2022. That’s not unusual. Corrections are normal in a bull market. The S&P had run up about 75% in a little over two years and was due for a consolidation, especially the technology sector. But is that all this is or is it something more?
Tariffs have officially arrived. And the market doesn’t like them one bit.
On Tuesday, the Trump administration imposed 25% tariffs on Mexico and Canada and raised the level from 10% to 20% on China. Stocks fell as of midday on Tuesday, but not dramatically. It’s unwelcome news to a market that was already dealing with still-sticky inflation and diminished economic growth expectations.
On Tuesday, the Trump administration imposed 25% tariffs on Mexico and Canada and raised the level from 10% to 20% on China. Stocks fell as of midday on Tuesday, but not dramatically. It’s unwelcome news to a market that was already dealing with still-sticky inflation and diminished economic growth expectations.
Stocks are taking a hit. It was an ugly day last Friday and there was more of the same on Tuesday. Should we expect more?
While the S&P 500 has stalled at about the same level since late November, it’s been more exciting under the hood.
The market indexes have stalled mostly because of technology. Those stocks still haven’t fully recovered from the DeepSeek plunge in late January. At the same time, earnings for the rest of the market are catching up.
The market indexes have stalled mostly because of technology. Those stocks still haven’t fully recovered from the DeepSeek plunge in late January. At the same time, earnings for the rest of the market are catching up.
The market is continuing its bumpy ride higher. Despite a barrage of concerns, 10 of the 11 S&P 500 stocks sectors are higher year to date.
The catalyst that has driven this market higher for more than two years got punched in the face on Monday. Is it the end of the gravy train or just an overreaction?
Stocks came crashing down on Monday. The S&P 500 was down almost 2% and lost most of this year’s gains in one day. The tech-laden Nasdaq index fell more than 3%. It was all because of some upstart Chinese company.
Stocks came crashing down on Monday. The S&P 500 was down almost 2% and lost most of this year’s gains in one day. The tech-laden Nasdaq index fell more than 3%. It was all because of some upstart Chinese company.
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.
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.
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.
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.
The year 2024 was another great year for stocks. The S&P was up over 23% for the year. It’s a nice addition to the 26% return last year. It is the first back-to-back 20%-plus return years for the index since 1998.
But the year ended on a sour note. Usually, good years in the market finish strong. But not this time. True, the S&P 500 was down less than 2% in December. But that’s only because the big tech companies are still doing okay. The rest of the market had a terrible month.
But the year ended on a sour note. Usually, good years in the market finish strong. But not this time. True, the S&P 500 was down less than 2% in December. But that’s only because the big tech companies are still doing okay. The rest of the market had a terrible month.
It looks like the election euphoria has run out of gas. The market has digested the election and is now back to business as usual.
The Dow Jones Industrial Average has lost ground for nine consecutive sessions. Most of the S&P 500 sectors have been down over the past month. Of course, the S&P is still within a whisker of the high. It hasn’t pulled back. But it hasn’t gone up in a while either.
The Dow Jones Industrial Average has lost ground for nine consecutive sessions. Most of the S&P 500 sectors have been down over the past month. Of course, the S&P is still within a whisker of the high. It hasn’t pulled back. But it hasn’t gone up in a while either.
These are good times. The S&P 500 is up 6% since the election and 27% year to date. This adds to a 26% return for the index in 2023.
The market is seemingly making new highs every day as investors expect a higher level of economic growth going forward because of the election. We’ll see if the economic growth materializes. But this optimistic economy expectation comes while the Fed has begun a rate-cutting cycle that will likely last the next two years. Why wouldn’t the market be partying?
The market is seemingly making new highs every day as investors expect a higher level of economic growth going forward because of the election. We’ll see if the economic growth materializes. But this optimistic economy expectation comes while the Fed has begun a rate-cutting cycle that will likely last the next two years. Why wouldn’t the market be partying?
Alerts
Early Tuesday morning Biopharmaceutical giant AbbVie (ABBV) announced plans to acquire Ireland-based Allergan plc (AGN) for $63 billion. The market hates the deal and AbbVie stock plummeted over 16% on the day. Let’s take a look at the deal and see what’s going on.
As you noticed, yesterday’s issue of Cabot Dividend Investor was jointly edited by Chloe Lutts Jensen, for whom it was the final issue, and Tom Hutchinson, for whom it was the first.
One of our positions reported middling third-quarter results this morning, and the stock opened 6% lower, although it’s already making up some of those losses. As a result, we’re moving it to Hold.
Yesterday brought widespread carnage to the markets, which has carried on to today, but some tech stocks have found support. For now we are going to be watching and waiting, but I want to comment on three current holdings.
One of our positions fell nearly 7% after reporting earnings Friday, and the stock started today with further losses. With the lack of support, it means more downside is the most likely near-term scenario here and it’s time to sell.
Markets pulled back yesterday and the Dow, S&P 500 and Nasdaq all closed lower. A couple of our holdings were hit particularly hard, so I wanted to send a quick update on two of our positions even though I’m not recommending any action.
One of our stocks reported EPS that missed estimates and lowered its guidance range this morning, and the stock opened 4% lower. We’ll look for an opportunity to unload the rest of our shares over the coming few days.
Given the shakiness of the broad market, we want to be reducing our exposure to weak stocks today. As noted in yesterday’s update, we’re going to reduce risk today by taking partial profits in one of our positions.
Markets ended last week on a sour note as the U.S. and China imposed tit-for-tat tariffs and Facebook continued to drag tech stocks lower. The major indexes all declined more than 5% for the week, their worst weekly performance in over two years. I’m moving two of our most affected stocks to Hold today.
After a half-hearted mid-week bounce, the stock market had another rough day yesterday. The S&P 500 fell almost 4%, and is now 10% off its all-time high. That means we’re now officially in a correction, although we didn’t really need yesterday to tell us that.
Our latest recommendation, pulled back sharply after reporting earnings Friday morning.