This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

The stock market tried its best to rally on July 29, but with major EPS reports, a Fed decision, and an employment report looming, higher prices attracted sellers and the major indices finished flat. The market will either continue lower in the near term or the pullback will end and new highs are just around the corner. We would bet on the former, as there is no indication from the recent price action of the S&P 500, Nasdaq, and Nasdaq 100 that the selling is over. While the tech-heavy indices, industries, and mega caps have worked off overbought momentum conditions on a daily and weekly basis, we have not yet cycled into oversold territory on a daily basis. Do we have to? Absolutely not -- but it probably would be healthy. The last time Technology indices/stocks were oversold on a daily basis was on April 19 -- but just barely, with the 14-day relative strength index reaching 30. The last time tech was oversold on a weekly basis was in mid-2022 -- and prior to that, during the pandemic. Long-term relative strength leadership rarely cycles into oversold territory on a weekly or monthly basis except during mega meltdowns and crashes. So there is a smell of panic in Technology land as the 'can't miss' semiconductor stocks are stinking it up. But at least the money fleeing those stocks is being moved into other areas of the market. The NYSE, Dow Jones Industrials, the S&P 500 equal weight, the S&P MidCap 400, the Russell 2000, and the S&P Small Cap 600 continue to catch a bid -- with most remaining near all-time highs. As of this writing, the iShares Semiconductor ETF (SOXX $220.58) has cratered almost 17% over the 14 sessions, its largest decline in that time period since June 2022 (which was during a tough bear market for Information Technology). There is a cluster of support near $200, which includes the last low in April, trendline support off the lows since October 2022, and a 38.2% retracement of the bull market. Distribution days on the Nasdaq 100 (QQQ) and the SOXX continue to add up as we count seven on both ETFs over the past 14 days.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Stock Market Looking to Get Past April's Stumble

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Monday Tee Up: A Short but Busy Week

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

After four consecutive alarmingly high Nasdaq One-Week Sell/Buy Ratios, data from Vickers Stock Research this week brings a calmer reading. Still, at 3.37, the Nasdaq ratio remains higher than the NYSE ratio at 2.91, this on a scale where readings above 2.50 are bearish. Nevertheless, this data this week represents a sharp decline from the readings in recent weeks, when the Nasdaq One-Week Sell/Buy Ratio reached a peak of 9.80 in the week of January 22, making the current weekly reading the lowest (least glaringly bearish) result since late December.

Rapidly rising inflation in 2022 knocked stocks into a bear market. While growth strategies suffered the most, value strategies also declined. Even bond prices were lower last year. Stocks have recovered thus far in 2023, but gains have been largely driven by only a handful of high-tech companies. Inflation remains high and the Fed continues to raise rates. Is a recession in the offing? With all the uncertainty, is it time for investors to cash in their chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes, such as fixed income and cash. Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate. Academic literature and, more to the point, returns history, indicate that Min Vol can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

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.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Stocks rose on Monday morning, led by the Communication Services and Financial sectors, as investors awaited the Fed's next interest rate decision and the October employment report later this week. On the earnings front, McDonald's shares rose after the company posted stronger-than-expected third-quarter sales and earnings. The Dow rose 1.0%, the S&P 0.6%, and the Nasdaq 0.7%. Crude oil fell sharply to $82.50 per barrel while gold rose $12 to trade near $2010 per ounce.

Inflation, a possible recession, higher interest rates, and higher gas prices. Consumers don't want to hear it. They want to go out and eat. They were denied that experience during the pandemic and are making up for lost time with "revenge eating" and "revenge travel." In the September retail sales report that caused a fuss last week, the category of "Food Services and Drinking Places" was ranked number one for growth, up nearly 12% in the first nine months of 2023 (compared to the same period a year ago). No other category was even close. For sure, the restaurant sector has some headwinds. One is chicken prices. The price of chicken is at an all-time high, at $1.96 per pound, up 33% in August 2023 from two years ago. Of course, chicken is one of the most-popular menu items across the range of restaurants -- from fast food to casual dining to formal dining. Restaurants, as best they can, try to pass on higher prices to patrons. But at some point, patrons won't bite (pun intended.) Next to consider are obesity drugs. Some analysts worry that these now-popular drugs will curb appetites and stop consumers from snacking. Argus' restaurant analyst John Staszak, CFA, is keeping an eye on the impact of these obesity drugs. But based on their high prices and possible safety issues, John sees only a slightly negative impact for now. Argus has an Over-Weight rating on the Consumer Discretionary sector. Here are some Argus BUY-rated restaurant stocks that might well show EPS growth over the next year.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

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.

Rapidly rising inflation in 2022 knocked stocks into a bear market. While growth strategies suffered the most, value strategies also declined. Even bond prices were lower last year. Stocks have recovered thus far in 2023, but gains have been largely driven by only a handful of high-tech companies. Inflation remains high and the Fed continues to raise rates. Is a recession in the offing? With all the uncertainty, is it time for investors to cash in their chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes, such as fixed income and cash. Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate. Academic literature and, more to the point, returns history, indicate that Min Vol can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods.

Stocks fell in late trading on Thursday, giving up early gains, as investors weighed more 2Q earnings reports and new GDP and employment data. The Commerce Department, in its advance estimate, said that the U.S. economy expanded at a 2.4% annualized rate in 2Q23, up from a revised 2.0% in 1Q and above the Bloomberg consensus forecast of 1.8% growth. On the employment front, first-time claims for state unemployment benefits fell by 7,000 to a seasonally adjusted 221,000 for the week ended July 22, below the Bloomberg consensus of 235,000. Continuing claims fell by 59,000 to 1.69 million. The Dow fell 0.67%, the S&P 0.64%, and the Nasdaq 0.55%. Crude oil rose more than 1% to $80 per barrel, while gold fell $26 to $1944 per ounce.

Our list this week identifies companies that received an Argus target-price increase in April. As the stock prices of these companies approached their target prices, Argus analysts saw those prices going even higher. We are in the thick of earnings season and our analysts are scouring quarterly reports to evaluate how the companies they follow are doing. With economists busy analyzing economic data to determine whether the economy might slip into recession, companies have been attending to their businesses. Some are weathering current economic conditions better than others. The economic pressures are real - including rising interest rates, inflation, the strong dollar, and wavering consumer spending patterns. These stressors are on top of normal competitive pressures, as companies fight to sell their products and services, outmaneuver peers, and make profits. Looking back at April, our analysts found companies where the business outlook is solid - and went through the mechanics of our valuation framework to adjust target prices upwards. Our framework includes analysis of historical multiples, peer multiples, and future dividends and cash flows. Here are the stocks on which we raised target prices in April. All are rated BUY at Argus.

Stocks were mostly higher on Wednesday morning following earnings from major Tech companies and new manufacturing data. Microsoft shares rose more than 7% after the company posted better-than-expected fiscal 3Q results, driven by strength in its cloud and AI businesses. However, UK regulators blocked the company's planned acquisition of videogame maker Activision Blizzard. Meanwhile, new data showed a sharper-than-expected decline in capital goods orders. The Commerce Department said that orders for core capital goods excluding aircraft fell 0.4% in March; the Reuters consensus forecast had called for a smaller decline of 0.1%. The Dow fell 0.1%, the S&P rose 0.3%, and the Nasdaq rose 1.1%. Crude oil traded near $77 per barrel, while gold rose slightly to $2005 per ounce.

Innovation may be hard to define. But to borrow from former U.S. Supreme Court Justice Potter Stewart, you know it when you see it. The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where labor and materials costs are lower. Yet the U.S. economy, even during the pandemic and the current period of high inflation, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as vaccines) and services (such as Zoom calls) and moving into new markets and applications, the domestic economy would not be growing, and capital would not be flooding into the country. The current high level of the U.S. dollar relative to currencies around the world attests to the confidence that global investors have in the durable and innovative U.S. economy.

Stocks were mixed on Monday morning after OPEC+ countries announced that they would cut oil production by more than 1 million barrels per day beginning in May. WTI crude oil jumped more than 5% on the news, and Energy stocks also rose strongly. Manufacturing data was weaker than expected. The Institute for Supply Management said that its manufacturing PMI fell to 46.3 in March, down from 47.7 in February and below the Reuters consensus of 47.5. The Dow rose 0.4%, while th S&P fell 0.2%, and the Nasdaq fell 0.9%. Gold rose $17 to $2004 per ounce.

Weekly insider-sentiment data from Vickers Stock Research continues to crawl, agonizingly, in a less-bearish direction. But the crawl is indeed slow and the data - while better than it was a few weeks ago - remains clearly bearish. Meanwhile, in the weeks since we started calling out alarming insider sentiment, the Dow Jones Industrial Average has fallen by about 6%.

Stocks rose on Tuesday morning as investors weighed earnings reports from General Motors, Pfizer, and McDonald's, and awaited the Fed's interest rate announcement on Wednesday. GM shares jumped 7% after the automaker posted much better than expected 4Q sales and earnings. On the inflation front, new data pointed to slower growth in labor costs. The Labor Department said that its employment cost index rose 1.0% in 4Q, down from 1.2% growth in 3Q and below the Reuters consensus forecast of 1.1% growth. The Dow rose 0.2%, the S&P 0.5%, and the Nasdaq 0.9%. Crude oil rose 1% to $79 per barrel, while gold rose $5 to $1944 per ounce.

Rapidly rising inflation 2022 knocked stocks into a bear market. While growth strategies suffered the most, value strategies also declined. Even bond prices were lower last year. Volatility, which has dropped from the highs of 2020, still has not returned to pre-COVID levels. Is it time for investors to cash in their chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes, such as fixed income and cash. As well, those fixed-income returns are from eras when the 10-year Treasury bond yield was much higher than the current 3.5% level. So what's a potential equity strategy for investors amid all the uncertainty? Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate.

Stocks rose on Thursday morning, recouping some of their recent losses. On the employment front, first-time claims for state unemployment benefits rose by 4,000 to a seasonally adjusted 230,000 for the week ended December 3. The reading was in line with the Reuters consensus forecast. Continuing claims, reported with a one-week lag, rose by 62,000 to 1.671 million. The Dow rose 0.8%, the S&P 0.9%, and the Nasdaq 1.2%. Crude oil rose 1% to $73 per barrel, while gold rose $8 to $1806 per ounce.

Stocks were mixed on Thursday morning following more 3Q earnings reports and new economic data. The Commerce Department, in its advance estimate, said that U.S. GDP rose at a 2.6% annualized rate in 3Q, up from a 0.6% decline in 2Q and above the Reuters consensus forecast of 2.4% growth. The strong reading was driven by growth in net exports, while consumer spending slowed. Meta shares plunged 22% on concerns about declining advertising revenue and heavy investment spending on the company's metaverse initiative, while McDonald's rose 4% following stronger-than-expected earnings and same-store sales. The Dow rose 1.4%, the S&P rose 0.3%, and the Nasdaq fell 0.5%. Crude oil traded near $89 per barrel, while gold fell slightly to $1665 per ounce.

Innovation may be hard to define. But to borrow from former U.S. Supreme Court Justice Potter Stewart, you know it when you see it. The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where labor and materials costs are lower. Yet the U.S. economy, even during the pandemic and the current period of high inflation, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as vaccines) and services (such as Zoom calls) and moving into new markets and applications, the domestic economy would not be growing, and capital would not be flooding into the country. The current high level of the U.S. dollar relative to currencies around the world attests to the confidence that global investors have in the innovative U.S. economy.

The broad market selloff on September 13 still feels raw, and the Federal Reserve has left no doubt that it will fight inflation vigorously for as long as it takes. Stocks, and likely many portfolios, are feeling some pain. In volatile times like these, when selling is widespread, a classic investing strategy is to focus on “best in class” stocks. These are the strongest and most-stable stocks in each sector -- and by looking across sectors, diversification can also be achieved. To get our list this week, we ran multiple screens. We started with the Argus Min-Vol theme model portfolio. As the name suggests, that portfolio includes companies that likely can best withstand market fluctuations. We then shortlisted the group by also screening for financial strength and dividend yield. And, finally, we picked one stock from each of the 11 S&P sectors. The following stocks are our Best in Class for Safety recommendations for September 2022, and all of them currently carry an Argus BUY rating.

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 Quanta Services, Inc. (PWR); Danaher Corp. (DHR); Expedia Group Inc (EXPE); EOG Resources, Inc. (EOG) and the Focus List deletions are Enbridge Inc (ENB); CVS Health Corp (CVS); Emerson Electric Co. (EMR); McDonald`s Corp (MCD).

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.

Rapidly rising inflation in 2022 has knocked the stock market into a bear market. While growth strategies have suffered the most, value strategies also have declined. Even year-to-date bond prices are lower. Volatility, which has dropped from the highs of 2020, still has not returned to pre-COVID levels. Is it time for investors to cash in their chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes, such as fixed income and cash. As well, those returns are from eras when the 10-year Treasury bond yield was much higher than the current 3.0% level. So what's a potential equity strategy for investors amid all the uncertainty? Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate. Academic literature and, more to the point, returns history, indicate that Min Vol can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods.

Stocks fell on Tuesday morning as investors weighed a profit warning from Walmart along with strong earnings from General Electric and McDonald's. Walmart shares fell 8% after the company cut its 2Q and full-year earnings forecasts, citing the impact of food and fuel inflation on consumers' discretionary spending. The Dow fell 0.4%, the S&P 0.9%, and the Nasdaq 1.8%. Crude oil rose slightly to $97 per barrel, while gold fell $2 to $1717 per ounce.

We Look for a Return to GDP Growth in 2Q

We Look for a Return to GDP Growth in 2Q

Recent data illustrates to us that key components of U.S. GDP are still expanding (despite the pandemic and geopolitical developments), though growth is not consistent across all segments of the economy. We expect resiliency from the U.S. economy and don't anticipate a recession in the near term, based in large part on strength in the all-important consumer and investment sectors. But there are risks, especially if the Fed moves too quickly to raise rates. The employment environment is nearing full strength, although consumer confidence trends are mixed. Auto sales have recovered from pandemic lows, but at an uneven pace. The housing market has been a contributor to the economic recovery -- and while high prices have cooled the market a bit, many metrics remain positive. The risk is that the Fed moves too fast and the consumer sector stalls. Businesses are expanding, but growth is slowing. Exports are under pressure from geopolitical tensions and the rising dollar. But import growth will not continue at the recent high-teens pace. Government spending trends should smooth as well. Our GDP growth forecast in 2022 is now 2.2%, which is also our forecast for 2Q22. Our estimates are a bit lower than other forecasters.

Stocks pared early losses on Tuesday morning, helped by gains in the Communication Services and Consumer Discretionary sectors. Federal Reserve Governor Christopher Waller said that the central bank needed to raise interest rates by 50 basis points at every meeting 'until we see substantial reductions' in inflation. Meanwhile, Fed Chair Jerome Powell prepared to meet with President Biden and Treasury Secretary Janet Yellen at the White House for a discussion about the economy. The Conference Board said that its consumer confidence index slipped to 106.4 in May from 108.6 in April. The Dow fell 0.1%, the S&P fell 0.1%, and the Nasdaq rose 0.3%. Crude oil traded near $117 per barrel, while gold fell $11 to $1846 per ounce.

The stock market opens Monday looking for a fresh start in May and any crumbs of positive news. The big event of the week is on Wednesday when the Federal Reserve announces its next monetary policy move. Most economists see that move as a 50-basis-point rate hike. Over the weekend, Berkshire Hathaway reported earnings and hosted its annual meeting with famed CEO Warren Buffett. More big earnings and economic reports are coming this week, including the jobs report for April. More than 1,600 public companies will report on their last quarter. The range and number of companies will give more data points on how different sectors are weathering the many external factors out there pressuring valuations, including - the war in Ukraine, inflation, and rising interest rates. The stock market carnage in April was swift, decisive, and severe. The Nasdaq now has lost all gains since 2008. The Dow and S&P are at their lowest levels since March 2020. In April, the Dow Jones Industrial average dropped -4.9%, the S&P 500 fell -8.8%, with the Nasdaq Composite again hit hardest losing -13%. Year-to-date the Dow is down -9.3%, the S&P 500 is further in correction territory, off -13.3%, and the Nasdaq is in bear territory, down -21.2%. Breaking down the sectors, only two of the eleven broad S&P categories are in the green for 2022. Here are the results so far year-to-date: Basic Materials -6%, Energy +35%, Healthcare -8%, Industrials -10%, Consumer Staples +0.7%, Utilities -0.5%, Financials -12%, Communication Services -26%, Information Technology -19%, Real Estate -10%, Consumer Discretionary -21%. It's been a rough start to 2022.

U.S. GDP unexpectedly contracted at a 1.4% annualized rate in 1Q22, well below consensus forecasts for 1.5% growth and the 6.9% rate recorded in 4Q11. There were several pockets of strength in 1Q, including investments into overall personal consumption expenditures (PCE, +2.7%), personal consumption expenditures on durable goods (+4.1%), investment into intellectual property products (+8.1%), and residential investment (+8.1%). Inventories grew for the second quarter in a row, in a sign that the worst of the supply-chain crisis may be behind. Segments of the economy that struggled included PCE-nondurable goods (-2.5%), export goods (-9.6%), and government spending (-2.7%). The PCE price index increased 6.5%, compared with an increase of 5.3% in 4Q. Excluding food and energy prices, the PCE price index increased 5.2%, compared with an increase of 5.0% in 4Q. In our view, the data from the BEA reflects the impact to exports from the Russian invasion of Ukraine and the high dollar. The recent core drivers of the economy -- consumer spending and IP investment -- remain in solid shape.

This edition features a roundup of analyst research on the Russia-Ukraine conflict, and Campbell, JD.com, and Guidewire.