| Homepage / Portfolio / Special Reports A Strong Portfolio to Get Us to the End-of-Year Rally If you're feeling overwhelmed lately, you're not alone.
The news is filled with anxiety-inducing headlines. Political volatility and uncertainty… inflation and recession fears… foreign wars and homeland turmoil.
And as investors, we're also faced with a volatile market that has gone through plenty of ups and downs since August, and we know there's more to come this month.
But I'm an eternal optimist. I think any other way is a waste of energy. So, I want to talk through a few things, focus on the data, and hopefully calm any anxiety you may have.
We got some good news yesterday from the latest consumer price index (CPI) report. Inflation in August declined 0.4 percentage points, hitting its lowest level since February 2021.
One catch, however, was that the core CPI – which excludes volatile food and energy prices – increased 0.3% for the month. This was slightly higher than estimates of 0.2%, and likely put the Federal Reserve on defense against inflation and decreased the probability of a more aggressive rate cut after the Fed meeting on Sept. 18.
That's actually quite bullish for stocks, though. It doesn't mean we aren't getting any cuts next week. It just means that we're more likely to see a 25 basis points (BPS) cut instead of a 50 BPS cut.
But check this out. When easing into rate cuts has been slow, the S&P 500 is up 24% on average one year after the first rate cut. When the cuts are quick, the gains are just 6.1%. 
A quick cut also usually means the Fed thinks we're in a crisis, which isn't the case right now.
We've also seen the market bounce back after last week when the S&P 500 had its worst week since 2023. On Monday, the S&P 500 climbed 0.7%, the Dow Jones Industrial Average jumped 0.6%, and the Nasdaq led the charge with a roughly 0.9% gain.
The market also ended yesterday in the green, with mega-cap tech and chip stocks leading the way. That's good for our TradeSmith Investment Report portfolio, as Advanced Micro Devices (AMD) added nearly 5% and was our top gainer this past week with 7.5%.
Our portfolio is looking strong during these volatile months, too. We have 22 of 24 stocks in the green, with our average return up to 28%.
We're still in the thick of seasonal and election-related volatility. But the probability of a big rally to end the year is strong. The historical odds are in our favor considering October is positive 63% of the time, November is positive 73.5% of the time, and December is positive 72.1% of the time.
We'll continue owning stocks with market-leading fundamentals, strong technicals, and Big Money inflows that will not only get us through the tougher months but are likely to be big winners as those fourth-quarter, healthier months come into play. 
Portfolio News and Notes Adobe (ADBE) is set to release earnings after the close today. Analysts estimate revenue of $5.37 billion, up 10% year-over-year. Earnings are expected to rise 12% to $3.51 per share, over that same time.
ADBE has beaten analysts' revenue estimates for six straight quarters and nine of the last ten quarters, overall.
Investors will be watching for updates on Adobe's AI offerings, specifically its generative AI model called Firefly.
Just yesterday, the company said it will release a new generative AI-powered video creation and editing tool later this year. The new AI tool will join the existing line of Firefly image-generating applications to allow users to produce still images, designs, and graphics. 
Source: TradeSmith Finance ADBE remains strong with a Quantum Score of 69 and fundamentals of 70.8. It's currently up 9.3% for our portfolio, and I expect higher prices ahead.
Novo Nordisk (NVO), weight loss pioneer, just released a study showing its obesity drug Liraglutide may be safe and effective in people as young as six. The company also received promising Phase 1 trial results for a new pill, Amycretin, that could bring as much as 13% weight loss in just three months.
NVO is expecting profit growth of 29% this year, despite increasing competition from other weight loss drugs.
Its stock saw a bounce after the release of the study and trial results and is now up 8.9% since we added it.
Chubb (CB) – one of our newest additions – signed a multi-year partnership renewal that extended its designation as the Official Insurance Sponsor of the US Open. Pretty exciting if you're into tennis! CB has given us 8.3% gains in a little over one month.
ServiceNow (NOW) is one of our top performers with 32.7% gains since we've added it, and I anticipate further growth from this company. It just released its most comprehensive set of new AI innovations on its Xanadu platform.
This new release includes hundreds of additional AI capabilities to boost customer agility, enhance productivity, and improve the employee experience.
Our TradeSmith Investment Report stocks are high-quality companies in some of the leading trends and continue to bring about new innovations that are sure to push these companies higher.
I look forward to seeing where these companies go as we enter into the year-end rally.
Talk soon,   Jason Bodner
Editor, TradeSmith Investment Report | 
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