Stock markets were mixed on Monday morning ahead of the next read on inflation due out Wednesday morning via CPI. Expectations are for both headline and core CPI to rise a more-modest 0.3% from the 0.4% increase in February, for annual CPI to tick up to 3.5% from 3.2%, and core CPI to decrease to 3.7% from 3.8% last month. This week also marks the unofficial start of earnings season, with big banks J.P. Morgan Chase, Wells Fargo, and Citigroup reporting. The Dow and the S&P 500 were nearly flat, while and the Nasdaq gained 0.1%. Crude oil traded just above $86 per barrel and gold rose $4 to $2349 per ounce.

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.

We see what we believe are some great opportunities right now in Healthcare -- and we like the sector overall. Argus Director of Research Jim Kelleher, CFA, recently completed his quarterly sector review and raised Healthcare sector to Over-Weight from Market-Weight. The healthcare environment is undergoing rapid transitions, and we now see an unfolding period of significant promise and opportunity. Our newly-favored stance is based on resumption of deferred medical procedures and significant new quality-of-life drugs and treatments. The category is broad and has underperformed the S&P 500 over the past year. The Healthcare sector ETF (XLV) is up 15% over the past year compared to a gain of 31% for the S&P 500. We see opportunity here to pick up some steady companies, with big brands and solid financials. These companies are science-focused and enhance lives. They are innovators. In our list this week, we look across several subsectors within the Healthcare sector and pull out some leaders we like. These stocks also are included in our Focus List and Model Portfolios, as noted below.

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.

Monday Tee Up: Big Banks Check In

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.

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 fell sharply on Tuesday morning amid continued interest rate concerns as investors weighed hawkish comments from Fed officials and stronger-than-expected employment data. The Labor Department, in its monthly JOLTS report, said that U.S. job openings rose by 690,000 to 9.61 million on the last day of August, above the Reuters consensus forecast of 8.8 million. The Dow fell 1.0%, the S&P 1.2%, and the Nasdaq 1.4%. Crude oil rose slightly to $89 per barrel, while gold traded near $1842 per ounce.

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.

To say that the rest of this week is very important for the stock market is an understatement. This is the busiest week of the second-quarter EPS season, with a large number of very big companies reporting. As well, the Fed announces its latest rate decision, broadly expected to be a 25-basis-point increase in the fed funds rate to a range of 5.25% to 5.5%. Meanwhile, the ECB meets on Thursday and the Bank of Japan convenes on Friday.

Stocks rose on Thursday morning following strong earnings reports from PepsiCo and Delta Airlines and more signs of moderating inflation. The Labor Department said that its producer price index for final demand rose just 0.1% from the prior year in June, down from a 0.9% increase in May and below the Reuters consensus, which called for 0.4% growth. The core PPI, excluding food and energy prices, rose at a 2.6% annual rate, down from 2.8% in May. The Dow rose 0.3%, the S&P 0.6%, and the Nasdaq 1.0%. Crude oil rose 1% to $76.50 per barrel, while gold traded near $1963 per ounce.

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.

On the back of a 13% gain year-to-date, the wind-down of the 2022-2023 bear market, and the apparent start of a new bull market, the VIX Volatility Index (also known as the Fear Index) has dropped back to pre-pandemic lows and is predicting smoother sailing for investors in the months ahead. The latest reading of the VIX is about 13.5. This is the lowest the index has been since January 2020, when the first COVID-19 cases were occurring in China. The VIX jumped as high as 85 in mid-March 2020 and generally stayed above the long-term average reading of 20 through 2022, as investors worried about the pandemic, inflation, supply-chain snags, the Russian invasion of Ukraine, the Federal Reserve's rate-hike campaign, the debt ceiling, bank failures, and the potential for a recession. Readings below the 20 level generally correlate with bull-market rallies, most recently the long bull market that began after the Great Recession and ran until March 2020. But just because the VIX is signaling calm doesn't mean investors don't face risks. The economy continues to teeter on the edge of recession, the Fed may not yet be finished raising rates, and China poses a longer-term threat, potentially reducing the benefits from globalization. Then, of course, in 2024, the U.S. will have another presidential election. The first debates will start within two months. Given the ongoing risks in the marketplace, we think investors should focus on well-managed companies with clear growth objectives and clean balance sheets.

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.

The MOVE Index, which is a gauge of fear in the bond market, has jumped to decade highs in the past two weeks, this as U.S. banks have failed, bank rescues around the globe have materialized, and questions about the future abound. The MOVE Index is also known as the Merrill Lynch Option Volatility Index. It is a yield-curve weighted index of the normalized implied volatility on one-month Treasury options that are weighted on the two-, five-, 10-, and 30-year contracts over the next 30 days. Over the past 10 years, the average reading of the MOVE Index has been about 70. Two weeks ago, as SVB Financial was failing, the index jumped to 180. It "settled" last week at 174. Meanwhile, the 10-year Treasury bond yield has fallen from 4.07% at the beginning of the month to 3.38%. The high reading on the MOVE Index signals that investors are unclear about the next direction for the 10-year yield. In the equity markets, the VIX Volatility Index also is elevated compared to the pre-pandemic period, but this index has fallen -- indicating that investors have grown more confident over the past two weeks. Even so, the current VIX reading of 21.7 is well above the 11-12 level that prevailed in the prior decade. Investors have numerous issue about which to worry, ranging from the war in Europe, to stubborn inflation, to higher interest rates, and to uncertainty about the Federal Reserve's next steps. Given the widespread risks in the marketplace, we think investors should focus on well-managed companies with clear growth objectives and clean balance sheets.

Stocks are rebounding Tuesday morning with fears over a contagion in the banking sector subsiding and investors now preparing for another rate hike again as inflation remains above long-term averages. The February Consumer Price Index (CPI) showed overall prices rising 0.4% last month, meeting expectations and down slightly from the 0.5% rise in January. Core consumer prices (excluding food and energy) increased 0.5% which was higher than the expected repeat of a 0.4% jump. The S&P 500 is up 1.9%, the Dow is up 1.4%, the Nasdaq is up 2%, and the Russell 2000 is up 3%. Crude oil traded near $74 per barrel, while gold fell $6 to $1910 per ounce.

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: An Elf-Sized Rally?

Healthcare is a sector that includes many categories and investing disciplines. It is innovative, can be either growth or value, and can involve start-ups or mature companies. A healthcare company can be built around one product that is leveraged in broad and creative ways, or a company with depth, breadth and products that have many touchpoints. Many of the companies are truly science-based, some with managers who are stronger as scientists than as executives running a company; others have scientists focus on science while practiced managers mind the books. The Healthcare sector accounts for 15% of the S&P 500, with an overall market cap of $1.4 trillion dollars. Subsectors include Biotechnology, Healthcare Distributors, Healthcare Equipment, Healthcare Supplies, Life Sciences Tools and Services, Managed Healthcare, and Pharmaceuticals. We think investors should Over-Weight the sector and consider allocating about 15% of their diversified portfolios to stocks in the sector. Healthcare is slightly outperforming the S&P 500 thus far in 2022, with a loss of 14% compared to the 25% loss for the S&P 500. The following are some Argus BUY-rated Healthcare companies. The stocks were selected using the Argus screening tool and the following criteria: BUY-rated; large-cap (greater than $8 billion market capitalization); a Financial Strength rating of Medium-High or High; and paying a dividend. We feel these companies currently are best in class for the sector. Some are also part of our model portfolios (Growth & Income, Equity Income, Growth, and Institutional).

Stocks continued to drop on Thursday morning after hawkish comments from Fed Chair Jerome Powell and prospects for additional aggressive rate hikes led to a sharp selloff on Wednesday. Following the expected 75-basis-point rate increase, Mr. Powell reiterated the Fed's commitment to bringing inflation down to its 2% target, and acknowledged that higher interest rates would cause pain for consumers and businesses. The median 'dot-plot' projection from Fed officials also indicated that the federal funds rate could rise to 4.4% by the end of the year, up from a forecast of 3.4% after the June meeting. The Dow fell 0.4%, the S&P 0.9%, and the Nasdaq 1.6%. Crude oil traded near $84 per barrel, while gold rose $2 to $1678 per ounce.

The U.S. stock market tends to rise, the performance of 2022 notwithstanding. The long-term upward trajectory has a foundation in the country's democratic political system and its market-based, capitalist economic system. In theory, the stock market efficiently allocates the nation's capital, generating solid returns. And then there is September. Indeed, our analysis of monthly returns going back to 1980 indicates that September is now the only month with an average loss. Not every September is negative. The month has a "win percentage" of 48%. But there have been some bombs, including 1986 (-8.5%), 2001 (-8.2%), 2002 (-11%), 2008 (-14%), and 2011 (-7.2%). Last year, the S&P 500 fell 4.8% in the month, and 2020 was a -4.2% clunker. September is a transition month: the August doldrums are over and corporations get back into gear post Labor Day. The IPO market typically picks up. The Federal Reserve meets, which can add to volatility. And, sometimes ominously, the third-quarter earnings season approaches. By the end of 3Q, companies are pretty sure whether or not they are on track to meet their financial targets. If they are not, and they pre-warn about disappointing results, investors can be quick to sell not just the company but an entire sector.

Stocks were mostly higher on Thursday morning as investors weighed new economic data and a second day of congressional testimony from Fed Chair Jerome Powell. The S&P flash U.S. Composite PMI fell to 51.2 in June from a final May reading of 53.6. The manufacturing PMI fell to 52.4, down from 57.0 last month and below the consensus forecast. The Dow fell 0.1%, the S&P rose 0.3%, and the Nasdaq rose 1.0%. Crude oil traded near $106 per barrel, while gold fell $4 to $1835 per ounce.

Vickers Stock Research, a subsidiary of Argus Research Group, tracks and analyzes insider trading and institutional ownership trends. Form 13-Fs are due 45 days after the end of calendar quarters, and have now come in from 1Q22. We like to review the 13Fs of the major activist investors, including Carl Icahn, Trian Fund Management, Jana Partners, and ValueAct Holdings, among others. Activist investing has evolved in recent years and is now less about generating a short-term return on an underpriced stock and more about achieving long-term returns through an active management/investor partnership. Here are some recent new purchases and key holdings of activist investors, according to the data from Vickers.

Our rating on the Healthcare sector is Over-Weight. Consumers are now more willing to spend on lifestyle enhancements along with necessary spending on life-saving treatments. In addition, the survival of the Affordable Care Act has kept the ranks of insured U.S. citizens above the historical average, further increasing consumer spending on healthcare services and products. Meanwhile, companies with experience in diagnostic testing, vaccines, and antiviral medicines, as well as suppliers of protective equipment and other hospital products, should benefit from efforts to contain the pandemic. The sector accounts for 13.7% of the S&P 500, and includes companies in the pharmaceuticals, medical devices, healthcare services, and insurance industries. The sector is outperforming the market thus far in 2022, with a gain of 1.3% through early April, while the S&P 500 has declined 6%. The following are examples of how we use our analysts' Healthcare sector ideas in our Focus List and Model Portfolios. All stocks are rated BUY at Argus.

After another good day for the stocks on Tuesday, the S&P 500 has seen a minor break above the prior highs that were logged in the early part of February (around the 4,590 region). In addition, the index has retraced more than 61.8% of its correction; the next Fibonacci hurdle is a 78.6% retracement up at 4,668. It is hard to pick one piece of chart resistance overhead, but we will go with the 4,700 area. Since the last closing low on March 14, the index has rallied 11% in just 11 days, the largest gain in that number of days since April 2020.

With the decline in stock prices over the past four days (back to new closing lows and very close to the Feb. 24 intraday low of 4,115 for the S&P 500), breadth remains weak. But we are seeing some bullish divergences that many times exist at intermediate-term bottoms. Still, certain longer-term breadth measures are in areas where the largest part of a correction still can occur.

With the market focus shifting from inflation to the Russian invasion of Ukraine, stocks finished last week with a surprise two-day rally that included the best stock day of 2022. On Friday, the Dow Jones Industrial Average soared by 835 points, or 2.51%. The S&P 500 rose 2.24%, and the Nasdaq Composite gained 1.64%. For the week, the DJIA was down 20 points, or 0.1%, while the S&P 500 rose 0.82%, and the Nasdaq Composite gained 1.09%. For the year to date, the Dow is down 6.2%; the S&P 500 is off 8.01%; and the Nasdaq Composite remains in correction territory though off its lows, down 12.47%.

Market breadth has deteriorated a bit over the past seven trading sessions, as the major indices try to hammer out an intermediate-term bottom. On the S&P 500, 40% of stock are above their 50-day average (all breadth data as of 2/11 close), while 48% are above their 200-day. The recent low reading of 42% was the weakest since 10/2020. Major market declines generally happen when this measure falls below 45%.

Stocks were mixed on Friday morning after Austria reimposed a full lockdown to combat soaring cases of the Delta variant and the German government contemplated similar measures. Investors also weighed prospects for the Biden administration's social spending and climate change bill, which was narrowly approved by the House but faces a difficult path in the Senate. The Dow fell 0.7%, the S&P fell 0.1%, and the Nasdaq rose 0.5%. Crude oil fell nearly 3% to $77 per barrel, while gold rose slightly to $1863 per ounce.

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.

Stocks were mixed on Tuesday morning as the Senate voted to approve the new $1 trillion infrastructure bill. The Labor Department said that U.S. worker productivity rose at a 2.3% annualized rate in 2Q, down from 4.3% in 1Q and below the Reuters consensus forecast of 3.5% growth. The Dow rose 0.4%, the S&P rose 0.1%, and the Nasdaq fell 0.5%. Crude oil traded near $69 per barrel, while gold rose $2 to $1728 per ounce.

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.

Consumers are now more willing to spend on lifestyle enhancements along with necessary spending on life-saving treatments. In addition, the survival of the Affordable Care Act has kept the ranks of insured U.S. citizens above the historical average, further increasing consumer spending on healthcare services and products. Meanwhile, companies with experience in diagnostic testing, vaccines, and antiviral medicines, as well as suppliers of protective equipment and other hospital products, should benefit from efforts to contain the coronavirus pandemic. The sector accounts for 13.0% of the S&P 500, and includes companies in the pharmaceuticals, medical devices, healthcare services, and insurance industries. The sector is underperforming the market thus far in 2021, with a gain of 12.9%. We think the sector should account for 15-17% of diversified portfolios. Here is how we use our analysts' Financial Services sector ideas in our Focus List and Model Portfolios. All stocks are rated BUY at Argus.

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 edition features moat sources in medtech; American cannabis; what eliminating the 1031 would mean for REITs; and notes from newly wide-moat Nvidia and new coverage Sofi and Spirax-Sarco.

Recently, the market took worrisome inflation data in stride, and the S&P 500 established an all-time high. Recall that in early May, stocks were staggered by CPI data that included an annual change of 4.2% in April consumer prices. Well, in early June, consumer prices for May were reported up by 5.0% -- but a broad-based rally ran right over that number.

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.

The stock market performed well last week, capping off an impressive first quarter. During the shortened week, tech stocks bucked a losing trend and outperformed blue chips. During Friday's session, the Dow Jones Industrial Average increased 172 points, or 0.52%. The S&P 500 was up 1.18%, and the Nasdaq Composite was up 1.76%. For the week, the DJIA was up 534 points, or 1.64%, the S&P 500 was up 2.82%, and the Nasdaq Composite was up 3.87%. Year-to-date, the DJIA is up 8.32%, the S&P 500 is up 7.02%, and the Nasdaq Composite is up 4.59%.

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 Tuesday morning amid continued optimism about new coronavirus vaccines and movement in Congress to both avert a government shutdown and compromise on a new stimulus package. Apple shares rose more than 3% on news that the company planned to increase iPhone production by 30% in the first half of next year. The Dow rose 0.5%, the S&P 0.5%, and the Nasdaq 0.4%. Crude oil traded near $47.50 per barrel, while gold rose $17 to $1849 per ounce.

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 were mixed on Friday, capping a strong week for the major indices. This week's rally favored value names over growth names, with blue chips outperforming tech stocks. On Friday, The Dow Jones Industrial Average gained 47 points, or 0.2%. The S&P 500 added 0.1% while the Nasdaq Composite fell 0.9%. For the full week, the Dow gained 3.8%. The S&P 500 and the Nasdaq were both up 2.5%. For the year-to-date, the Dow is down 3.9%, while the S&P is up 3.7% and the Nasdaq is up 22.7%. Over the past 52 weeks, the Dow is up 4.4%, the S&P 14.8%, and the Nasdaq 38.3%.

Stocks were mixed on Friday, capping a strong week for the major indices. This week's rally favored value names over growth names, with blue chips outperforming tech stocks. On Friday, The Dow Jones Industrial Average gained 47 points, or 0.2%. The S&P 500 added 0.1% while the Nasdaq Composite fell 0.9%. For the full week, the Dow gained 3.8%. The S&P 500 and the Nasdaq were both up 2.5%. For the year-to-date, the Dow is down 3.9%, while the S&P is up 3.7% and the Nasdaq is up 22.7%. Over the past 52 weeks, the Dow is up 4.4%, the S&P 14.8%, and the Nasdaq 38.3%.

Stocks fell on Friday morning following a sharp drop in U.S. retail sales. The Commerce Department said that sales plunged 16.4% in April. This followed an 8.3% decline in March and exceeded the Reuters consensus forecast, which had called for a decline of 12.0%. Meanwhile, the House prepared to vote on a new $3 trillion relief package that would include direct support for state governments and additional payments to individuals; however, Senate Republicans have promised to reject the measure. The S&P fell 1.0%, the Dow 1.0%, and the Nasdaq 1.1%. Crude oil rose 4% to more than $28 per barrel, while gold rose $8 to $1749 per ounce.

Stocks fell on Friday morning following a sharp drop in U.S. retail sales. The Commerce Department said that sales plunged 16.4% in April. This followed an 8.3% decline in March and exceeded the Reuters consensus forecast, which had called for a decline of 12.0%. Meanwhile, the House prepared to vote on a new $3 trillion relief package that would include direct support for state governments and additional payments to individuals; however, Senate Republicans have promised to reject the measure. The S&P fell 1.0%, the Dow 1.0%, and the Nasdaq 1.1%. Crude oil rose 4% to more than $28 per barrel, while gold rose $8 to $1749 per ounce.

Becton, Dickinson is the world's largest manufacturer and distributor of medical surgical products, such as needles, syringes, and sharps-disposal units. The company also manufactures diagnostic instruments and reagents, as well as flow cytometry and cell-imaging systems. BD Interventional (largely the former Bard business) accounts for 23% of revenue. International revenue accounts for 44% of the company's business.

Argus Research covers 55 leading global healthcare companies. Many of them are working on new products, vaccines and medicals supplies and equipment to help healthcare professionals treat Covid-19 patients and prevent the outbreak from spreading even further than its current trajectory projects. Argus Senior Analyst David Toung and Security Analyst Jasper Hellweg cited the following companies in the current battle.