If the unemployment rate ticks up to 4.2% on Friday, that could trigger the widely followed Sahm Rule recession indicator. While we are not forecasting a recession based on our analysis, which includes dozens of business cycle indicators, the "Rule" has a venerable record. It was developed by former Fed economist Claudia Sahm, and signals the start of a recession when the three-month average unemployment rate rises by 50 basis points (bps) or more from its low point in the prior 12-months. The St. Louis Fed tracks the Sahm Rule on its FRED database. The indicator reached 43 basis points based on June's 4.1% unemployment rate. With jobless claims remaining low, we are not forecasting an uptick to 4.2%. Our 4.1% estimate for July, which matches consensus, would take the Sahm indicator to 47 basis points. According to a June 2019 Brookings paper that analyzed the period from 1970-2019, once this gap is over 40 bps, the odds of a recession at any horizon surpass 50%. A 50-bps increase "has effectively always indicated that a recession has already started." In a recent Bloomberg Opinion article, William Dudley, former president of the New York Fed, explained, "Historically, deteriorating labor markets generate a self-reinforcing feedback loop. When jobs are harder to find, households trim spending, the economy weakens and businesses reduce investment, which leads to layoffs and further spending cuts. This is why unemployment, having breached the 0.5-percentage-point threshold, has always increased a lot more -- the smallest rise was nearly 2 percentage points, trough to peak." Last week's report that 2Q GDP accelerated to 2.8% growth driven by a rebound in consumer spending and a surge in business investment gives us reassurance that the U.S. economy is not in a recession or on the precipice of one. Sahm noted in a November 2023 Substack post that "The Sahm rule is an empirical reality, not a law of nature. It can break in that it triggers, and there is no recession." We expect July payrolls to rise by a still strong 185,000 (consensus is 188,000).

Argus has published its latest Portfolio Selector, which features its popular Focus List. Each month, Director of Research Jim Kelleher, CFA, surveys the team of Argus Research industry analysts for their timeliest recommendations out of the company's fundamental universe of approximately 500 stocks. The Focus List typically includes 30 stocks: turnover is high, as Jim typically adds three or four new stocks per month. Below are the latest additions, all of which are rated BUY at Argus.

The Vickers Top Buyers & Sellers is a daily report that identifies the five companies the largest insider purchase transactions based on the dollar value of the transactions as well as the five companies the largest insider sales transactions based on the dollar value of the transactions.

The Portfolio Selector features the Argus Focus List, a group of 30 "best idea" stocks generated and regularly updated by Argus' analysts and investment policy committee. It also includes the director of research’s monthly investment strategy column, stock recommendations and sector picks, economic forecasts, and an asset allocation model. This month, the Focus List additions are DuPont de Nemours Inc (DD); GE Vernova Inc. (GEV); Palantir Technologies Inc (PLTR); Dicks Sporting Goods, Inc. (DKS) and the Focus List deletions are ASML Holding NV (ASML); Linde Plc. (LIN); Oshkosh Corp (OSK); TJX Companies, Inc. (TJX).

On Friday, we expect the Bureau of Labor Statistics (BLS) to provide evidence that the U.S. job market is healthy but cooling. This week's report on June employment will help answer our biggest question about the U.S. economy. Is recent softness in consumer spending the start of a meaningful slowdown or is spending just normalizing after a strong run? If payrolls come in near our estimate of 175,000 (consensus is 180,000) and the unemployment rate is close to consensus of 4% (our estimate is 4.1%), it could be a sign that the job market remains healthy and consumers are likely to have spending power with back-to-school and the holidays on the horizon. Signs of increasing recession risk or reaccelerating wage pressure could roil the markets or add to the confusion investors felt last month when the economy created an above-consensus 272,000 nonfarm jobs as the unemployment rate rose to 4.0%. The household survey from the BLS, which is used to calculate the unemployment rate, showed that the number of people employed dropped by 408,000. The strong payroll gains were calculated from a separate BLS survey of business establishments. The Kansas City Fed's Labor Market Conditions Indicators track 24 variables that were little changed in May. The indicator, which has been trending lower, continued to show that labor conditions remain above their long-run average. The momentum indicator remained near its historical average. Jobless claims, which are reported weekly, are the first place we'd look for signs of a serious slowdown, and recent readings look healthy. The four-week average has risen to 236,000 from about 200,000 at the beginning of the year and 222,250 at the beginning of June. That is still well below the critical 300,000 that would raise recession flags. We expect that average hours worked stayed at 34.3 and that growth in average hourly earnings eased to 4%.

Perhaps some healthy rotation is indeed kicking in, as the S&P 500, Dow Jones Industrial Average, and Russell 2000 are all higher on Monday morning, picking up the slack for the Nasdaq Composite, which continues to consolidate a tad after a scorching first six months of 2024. If that is the case, many would argue that such a turn is a healthy breadth development for the overall market and likely to support further stock gains in the second half of the year.

The Vickers Top Buyers & Sellers is a daily report that identifies the five companies the largest insider purchase transactions based on the dollar value of the transactions as well as the five companies the largest insider sales transactions based on the dollar value of the transactions.

On Friday, the Bureau of Labor Statistics (BLS) likely will provide continuing evidence that the U.S. job market is healthy. The four-week average of initial jobless claims is running at 211,000, which is well below the 300,000 that might signal a critical weakening in employment conditions. The Layoffs and Discharges series in the BLS Job Openings and Labor Turnover Survey (JOLTS) was 1.57 million for January, below 1.61 million in December and below the average of 1.925 million since late 2000. Consumers aren't seeing much evidence of weakness either, according to last week's report on March Consumer Confidence from the Conference Board. Some 43.1% of consumers surveyed said jobs were "plentiful," up from 42.8% in February. Only 10.9% of consumers said jobs were "hard to get." Consumers' outlook for the job market in six-months softened slightly. While employers are keeping the workers they have, we aren't seeing indications of robust demand for new workers. The Institute for Supply Management's Manufacturing Employment Index was 47.4 for March, improved from February but suggesting a contracting market and soft manufacturing employment when the BLS reports on Friday. Tomorrow, the ISM will report on activity in the services sector, which is an important engine of GDP growth. The ISM Services Employment Index posted a contractionary 48 in February. We expect the BLS employment report on Friday will show that March payroll growth moderated to 180,000, from 275,000 in February, while the unemployment rate remained at 3.9%. We expect growth in average hourly earnings fell by one-tenth to 4.2%, and average hours declined to 34.2 from 34.3. The unemployment rate rose in February, but it did not trigger the Sahm Rule recession indicator. Based on our analysis, the March unemployment rate would need to rise to 4.4% to push the indicator to a recession signal.

The first quarter of 2024 was rewarding for equity investors, as the S&P 500 increased 10.2%. Much of the market participated, as the S&P 500 Growth Index advanced 12.6% and the S&P 500 Value Index rose 7.4%. Leading sectors included Communication Services (+15.6%), Energy (+12.7%), Technology (+12.5%), Financials (+12%), and Industrials (+10.6%). The average stock in the Argus Universe of Coverage rose 8.0% during the year, and the median stock advanced 7.2%. The average BUY-rated stock increased 9.9%, while the average HOLD-rated stock gained 3%. Will the market's breadth hold up for the balance of 2024 or will investors revert to the so-called Magnificent 7? Will small-caps pick up their pace (the Russell 2000 was up "only" 4.8% in 1Q) or is the current bull-market rally due for a break, with some profit-taking coming into play? Given declining interest rates, we expect growth stocks to continue to lead stocks higher, while the risk of recession puts a premium on clean balance sheets, which are also more prevalent among large-caps. Investors seeking value are encouraged to focus on dividends and look for yields in the 3%-4% range. Here are the Top 10 Performers from the Argus Universe last quarter (including representatives of six of the 11 major sectors) as well as the Bottom-Five Performers.

Small- and mid-cap stocks (SMID) have underperformed large-caps over the past 12 months, but may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from global events. As well, the prices of SMID stocks generally are lower than the prices of large-caps. As well, there are long stretches in the record books when SMID stocks have outperformed large-caps. That said, SMID stocks can be risky. The standard deviation for monthly returns was 5.7% for SMID stocks over a 2003-2021 test period, versus 4.3% for large-caps. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record.

The Vickers Top Buyers & Sellers is a daily report that identifies the five companies the largest insider purchase transactions based on the dollar value of the transactions as well as the five companies the largest insider sales transactions based on the dollar value of the transactions.

Stocks were mixed on Tuesday morning as investors await results from the Federal Reserve policy meeting. On the housing front, in February, housing starts rose to a seasonally adjusted annual rate of 1.52 million. This up from the revised 1.37 million in January and above expectations of 1.43 million. Building permits issued were at a seasonally adjusted annual rate of 1.52 million, up from January's revised 1.49 million. The Dow rose 0.6%, the S&P 500 was nearly flat and the Nasdaq lost 0.3%. Crude oil traded above $83 per barrel, while gold fell $7 to $2157 per ounce.

Investors Win: Our Monthly Survey of the Economy, Interest Rates, and Stocks

Small- and mid-cap stocks (SMID) have underperformed large-caps over the past 12 months, but may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine, high European inflation or other geopolitical developments. As well, the prices of SMID stocks generally are lower than the prices of large-caps. SMID stocks can be risky, but diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 12%-15% of the U.S. stock market's capitalization is comprised of SMID stocks. For our purposes, we use a threshold of $20 billion to define a SMID stock.

Stocks rose on Tuesday morning as weaker-than-expected economic data raised the likelihood that the Fed would hold rates steady at its September meeting. In its monthly JOLTS survey, the Labor Department said that U.S. job openings fell to 8.83 million at the end of July, down from 9.16 million at the end of June and the third straight monthly decline. The reading was well below the Reuters consensus of 9.47 million. Consumer confidence also slipped. The Conference Board said that its consumer confidence index fell to 106.1 in August from 114 in July. The Dow rose 0.3%, the S&P 0.9%, and the Nasdaq 1.4%. Crude oil fell slightly to $80 per barrel, while gold traded near $1949 per ounce.

Dividend income is often overlooked amid gyrations in the stock market. Thus far in 2023, market bulls are boasting about first-half S&P 500 returns that may top 15%. No one is very focused on the broad market index's 1.6% current yield. But dividends are an important element of return. Dividend income accounted for 42% of the total return of the S&P 500 between 1930 and 2012, according to Hartford Funds. And that's just the average. In some of those decades, dividends accounted for more than 50% of total returns and even 100% of returns. More recently, dividends have accounted for a smaller portion of returns, at around 15%-20%. In 2018, dividend payments softened the blow when most market indices declined as the Fed hiked rates. The pattern was repeated in 2022. Not all dividends are created equal, though, and it is important to understand the difference between the two main categories: high-yield stocks and dividend-growth stocks.

Dividend growth is among our most important themes for 2023, and stretches across industries. We think companies that raise their dividends consistently at a double-digit rate are sending off three important signals amid the recent market volatility: 1) the company's balance sheet is strong enough to pay a dividend; 2) management is clearly focused on providing shareholder returns; and 3) management is confident enough in the near-term outlook to raise the payout aggressively. This third factor is especially important during periods of economic weakness and an outright earnings recession. Here are stocks that meet our double-digit dividend test and are on the Argus BUY List. They are also holdings in our Dividend Growth Separately Managed Account and in the Dividend Growers Total Return Trust, sponsored by SmartTrust.

Stocks fell on Wednesday morning as investors awaited a House vote on the debt ceiling deal later in the day. Meanwhile, employment data pointed to a still strong labor market. In its monthly JOLTS survey, the Labor Department said that job openings rose by 358,000 to 10.1 million on the last day of April, well above the Reuters consensus forecast of 9.375 million. The Dow fell 0.8%, the S&P 0.9%, and the Nasdaq 0.7%. Crude oil traded near $69 per barrel, while gold rose $11 to $1988 per ounce.

The Vickers Top Buyers & Sellers is a daily report that identifies the five companies the largest insider purchase transactions based on the dollar value of the transactions as well as the five companies the largest insider sales transactions based on the dollar value of the transactions.

The Vickers Top Buyers & Sellers is a daily report that identifies the five companies the largest insider purchase transactions based on the dollar value of the transactions as well as the five companies the largest insider sales transactions based on the dollar value of the transactions.

Stocks rose modestly on Wednesday morning on signs of cooling inflation. The Labor Department reported that its consumer price index rose 5.0% on a year-over-year basis in March, the slowest pace of growth since May 2021. The reading was below the Reuters consensus forecast of 5.2% and down from 6.0% in February. The core CPI, excluding food and energy costs, rose 5.6% from the prior year, in line with the consensus estimate. The Dow rose 0.6%, the S&P 0.5%, and the Nasdaq 0.4%. Crude oil traded near $80.50 per barrel, while gold rose $3 to $2022 per ounce.

Stocks rose modestly on Wednesday morning on signs of cooling inflation. The Labor Department reported that its consumer price index rose 5.0% on a year-over-year basis in March, the slowest pace of growth since May 2021. The reading was below the Reuters consensus forecast of 5.2% and down from 6.0% in February. The core CPI, excluding food and energy costs, rose 5.6% from the prior year, in line with the consensus estimate. The Dow rose 0.6%, the S&P 0.5%, and the Nasdaq 0.4%. Crude oil traded near $80.50 per barrel, while gold rose $3 to $2022 per ounce.

The Vickers Top Buyers & Sellers is a daily report that identifies the five companies the largest insider purchase transactions based on the dollar value of the transactions as well as the five companies the largest insider sales transactions based on the dollar value of the transactions.

The Vickers Top Buyers & Sellers is a daily report that identifies the five companies the largest insider purchase transactions based on the dollar value of the transactions as well as the five companies the largest insider sales transactions based on the dollar value of the transactions.

Monday was quite a day in the oil market, as OPEC+ cut output. The timing seems very calculated, as the amount of crude oil in the U.S. Strategic Petroleum Reserve (SPR) has fallen from 660,000,000 gallons in 2020 to a current level of 372,000,000 gallons (the lowest level since 1983). The U.S. was able to assist in bringing WTI down below $70 a few weeks ago, from $130 in 2022. It's odd that the U.S. didn't start to refill the SPR as it accomplished its goal, helping industries and consumers save a lot of money. Gasoline prices (ex. taxes, fees, etc.) fell to a recent low of $2.00/gallon after spiking to $4.30/gallon in 2022.

Small- and mid-cap stocks (SMID) have underperformed large-caps over the past 12 months, but may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine, high European inflation or other geopolitical developments. As well, the prices of SMID stocks generally are lower than the prices of large-caps. SMID stocks can be risky, but diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 12%-15% of the U.S. stock market's capitalization is comprised of SMID stocks. For our purposes, we use a threshold of $15 billion to define a SMID stock.

The Vickers Top Buyers & Sellers is a daily report that identifies the five companies the largest insider purchase transactions based on the dollar value of the transactions as well as the five companies the largest insider sales transactions based on the dollar value of the transactions.

The U.S. economy generated 311,000 new jobs in February, far ahead of the consensus expectations and our forecast of 190,000. The unemployment rate rose slightly to 3.6% from a cycle-low 3.4% in January. Average hourly earnings increased eight cents month-to-month and are now 4.6% higher year-over-year and up 20 basis points month-to-month. Revisions to the jobs totals in the two prior months trimmed 34,000 jobs from the economy. In February, jobs gains occurred in leisure and hospitality, retail, professional and business services, government, healthcare, and construction. Industries notably absent from the outsized jobs gain include mining, quarrying, oil and gas extraction, manufacturing, wholesale trade, and financial activities. January's blockbuster jobs gains were revised only slightly lower to 504,000 from 517,000, suggesting the consumer segment of the economy may hang on to its growth track for a few more months, despite the impact of the interest-rate hikes from the Fed, the Russian invasion of Ukraine, and high food prices. The news on the inflation front may not have been as sanguine as many investors wanted. The revision to January's numbers was small and February payrolls topped consensus, although the unemployment rate did tick higher. Stock futures turned slightly higher after the report was released. The yield on the 10-year Treasury was little changed at 3.8% after the report, but it has jumped from 3.3% before the January release.

Market breadth has deteriorated since early February, which is logical as the major indices have lost ground but continue to respect important support levels. We've looked at hundreds of stock charts for issues in the S&P 500 (SPX), and it is obvious that the average stock chart has gone from looking constructive in January/early February to being bearish/absolute ugly only five to six weeks later.

Stocks were mixed on Wednesday morning following more congressional testimony from Fed Chair Powell and new employment data. Mr. Powell said that the Fed had not yet decided on the size of its next rate increase, and that it would wait to see additional data ahead of the March 21-22 FOMC meeting. Employment data again pointed to a strong job market. Payroll provider ADP said that U.S. companies added 242,000 jobs in February, up from 119,000 in January and above the Reuters consensus forecast of 200,000. The Dow fell 0.2%, the S&P rose 0.2%, and the Nasdaq rose 0.4%. Crude oil traded near $77 per barrel, while gold rose $3 to $1823 per ounce.

Stocks fell in volatile trading on Tuesday morning following new inflation data. The Labor Department reported that its consumer price index rose 6.4% from the prior year in January, down slightly from a 6.5% increase in December. Excluding food and energy prices, the core CPI rose at a 5.6% annual rate last month, down from 5.7% in December but above the consensus forecast of 5.5% growth. The Dow fell 1.2%, the S&P 0.9%, and the Nasdaq 0.8%. Crude oil fell more than 1% to $79 per barrel, while gold traded near $1862 per ounce.

The Vickers Top Buyers & Sellers is a daily report that identifies the five companies the largest insider purchase transactions based on the dollar value of the transactions as well as the five companies the largest insider sales transactions based on the dollar value of the transactions.

With the final month of 2022 now underway, there is no shortage of 'year-in-review' commentary that is justifiably focused on the dubious performance of stocks. In contrast, corporate insiders have been sending off bullish signals since mid-May. We are willing to assume that many investors will end 2022 in the red, but not so willing to say that insiders therefore missed the mark.

Stocks fell sharply in 3Q 2022, with the S&P 500 down more than 5.2% for the period after a 9% decline in September. Year to date, the index is down 25% and in a bear market. Growth stocks have again been the weakest performers, as sectors such as Technology, Communication Services, and Consumer Discretionary have all lagged the major market indices. The leading sectors were value-oriented, including Utilities, Energy, and Consumer Staples. The average stock in the Argus Universe of Coverage declined 5.6% during the quarter, and the median stock declined 6.9%. The average BUY-rated stock dropped 5.0%, while the average HOLD-rated stock fell 7.1%. Will investors continue to favor value in 4Q22? Will high inflation drive continued outperformance in Energy? Given interest rates that are on the rise, we are thinking 2022 may be the one-in-five years that value leads growth for the full year. Investors seeking value are encouraged to focus on dividends and look for yields in the 3%-4% range. Regarding sectors, our current Over-Weights are Energy, Healthcare, Industrials, and Materials.

Small- and mid-cap stocks (SMID stocks) have underperformed large-caps over the past 12 months, but still may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine. As well, the prices of SMID stocks generally are lower than the prices of large-caps. SMID stocks can be risky -- and large-caps outperformed SMID stocks in 11 of the 19 years in our test period. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 12%-15% of the U.S. stock market's capitalization is comprised of SMID stocks. For our purposes, we use a threshold of $20 billion to define a SMID stock.

Stocks fell sharply on Friday morning after Fed Chair Jerome Powell said that the central bank would continue to raise interest rates, and keep them elevated, to prevent inflation from becoming entrenched. He also acknowledged that rate hikes would come at a cost to the American economy. Mr. Powell's speech overshadowed positive inflation data. The Commerce Department said that personal consumption expenditures fell 0.1% month-over-month in July, down from 1.0% growth in June. The core PCE, excluding food and energy, rose 0.1%, slowing from 0.6% a month earlier. The Dow fell 1.7%, the S&P 2.0%, and the Nasdaq 2.7%. Crude oil fell slightly to $92 per barrel, while gold dropped $23 to $1749 per ounce.

Stocks fell on Wednesday morning after giving up early gains. Manufacturing data was better than expected. The Institute for Supply Management said that its manufacturing purchasing managers' index rose to 56.1 in May, up from 55.4 in April and above the Reuters consensus forecast of 54.5. On the employment front, the Labor Department's monthly JOLTS survey showed 11.4 million job openings at the end of April, down from 11.86 million a month earlier. The Dow fell 0.8%, the S&P 0.8%, and the Nasdaq 0.9%. Crude oil rose 1.5% to $116 per barrel, while gold fell $2 to $1846 per ounce.

The Vickers Top Buyers & Sellers is a daily report that identifies the five companies the largest insider purchase transactions based on the dollar value of the transactions as well as the five companies the largest insider sales transactions based on the dollar value of the transactions.

The Vickers Top Buyers & Sellers is a daily report that identifies the five companies the largest insider purchase transactions based on the dollar value of the transactions as well as the five companies the largest insider sales transactions based on the dollar value of the transactions.

Small- and mid-cap stocks (SMID stocks) have underperformed large-caps over the past 12 months, but still may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine. As well, the prices of SMID stocks generally are lower than the prices of large-caps. That said, SMID stocks can be risky and large-caps outperformed SMID stocks in 11 of the 19 years in our test period. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 12%-15% of the U.S. stock market's capitalization is comprised of SMID stocks. For our purposes, we use a threshold of $20 billion to define a SMID stock.

Small- and mid-cap stocks (SMID stocks) have underperformed large-caps over the past 12 months, but still may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine. For another, the prices of SMID stocks generally are lower than the prices of large-caps, as the P/E ratio on the Russell 2000 Small-Cap Index is 16x compared to a P/E of 27x for the S&P 500. Finally, the long-term record has favored SMID stocks over large-caps. From 2003-2021, the Russell 2000 Index had climbed 544%, compared to an advance of 401% for the S&P 500 index. Here are a handful stocks with market caps below $20 billion that are on the Argus BUY list.

Stocks fell sharply on Thursday morning after talks between the Ukrainian and Russian foreign ministers failed to produce a cease-fire agreement or other progress in ending the war. The selloff was also driven by more signs of surging inflation. The Labor Department said that its consumer price index rose 7.9% year-over-year in February, up from 7.5% in January and in line with the consensus forecast. The reading was the strongest annual increase since 1982. The core CPI, excluding food and energy, also rose 6.4% on an annual basis in February, up from 6.0% growth in January. The Dow fell 1.2%, the S&P 1.4%, and the Nasdaq 2.1%. Crude oil traded near $110 per barrel, while gold rose $11 to $1999 per ounce.

The Vickers Top Buyers & Sellers is a daily report that identifies the five companies the largest insider purchase transactions based on the dollar value of the transactions as well as the five companies the largest insider sales transactions based on the dollar value of the transactions.

Stocks rose on Thursday morning in another volatile session amid continued concerns about inflation and the Omicron variant. Employment data was mixed. The Labor Department said that first-time claims for state unemployment benefits rose to 222,000 for the week ended November 27, up from 194,000 a week earlier but below the Bloomberg consensus forecast of 240,000. The Dow rose 1.7%, the S&P 1.1%, and the Nasdaq 0.4%. Crude oil rose more than 1% to $66.50 per barrel, while gold fell $17 to $1768 per ounce.