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 AI) and services (such as Zoom calls) and moving into new markets, 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.

The stock market is in a rough patch for the first time since the July to October period of last year. After the major indices hit their secondary highs on April 11 (the Nasdaq hit its all-time high that day), is has pretty much been "down periscope." Out of those trading six days, the S&P 500 (SPX), Nasdaq, and Nasdaq 100 (QQQ) have fallen between 0.9% and 2.1% on three (SPX) or four of those days. Despite the very steep downside slope of the Big 3, NYSE breadth actually bottomed on April 12 and 15, illustrating that the selling has been concentrated in Big Tech and the many stocks that were overly extended on a momentum basis.

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.

No matter how you slice the price action from the last two quarters or past five months, the market may well have more upside ahead -- possibly in double digits. This is, of course, not a certainty, as there is always the possibility that something odd (say a pandemic) comes out of left field. But it is not rare for the S&P 500 (SPX) to be up for two consecutive quarters (at least during certain market periods), nor is it that uncommon for the index to be up for five straight months. Let's just hope that the solar eclipse next week is the only "odd" event we have for the rest of the year.

Value stocks -- a market segment that includes high-yield stocks -- outperformed growth stocks in 2022. That's a recent rarity, as for the past decade-plus, the performance record has favored growth. But the tide turned in 2022. The rollout of COVID-19 vaccines gave a lift to some of the cyclical companies (energy and regional banks) that had lagged in recent quarters, and value stocks outpaced growth stocks that year. While growth stocks have retaken the lead since 2023, the Federal Reserve continues to keep interest rates high to fend off inflation. This could possibly cap multiple expansion for growth companies in coming quarters. In any event, the value sector is the place to achieve income.

Stocks are trading lower on Tuesday morning on some weaker-than-expected economic data as well as growing concerns that AI-related stocks are overbought at this juncture. Specifically, the Conference Board's Leading Economic Index slipped 0.4% in January and was lower than the expected 0.3% drop. The index was down 3.0% over the past six months -- a narrower decline than the preceding six-month period, which fell by 4.1%. Still, with six of the 10 index components being positive over the past six-month period, the index no longer is signaling a recession ahead. Turning to stocks, shares of Nvidia (NVDA) are down today, with the company reporting earnings tomorrow after market close. Despite expectations for positive earnings results, the selloff indicates many investors may be concerned that the shares are due for a pullback following an impressive run this year (which saw shares rise over 50% to an all-time high set last week). Shares of other tech companies which also saw strong gains related to AI prospects are trading lower on overvaluation concerns, including Arm Holdings (ARM), Advanced Micro Devices (AMD), and Super Micro Computer (SMCI).

Stock indices dipped in October 2023, with the S&P 500 falling a sharp 10% off summer highs. Looking at 13F filings of big institutional portfolios, we see that the big guns were busy last quarter taking advantage of that dip. Citadel Advisors went on a buying spree, adding to its $100 billion portfolio across a range of sectors. As did D.E. Shaw, adding to its $67 billion portfolio. Vickers Stock Research, a subsidiary of Argus Research Group, analyzes insider trading and institutional stock ownership. Form 13-Fs, which institutions must file to report their holdings, are due 45 days after the end of calendar quarters and have come in for 4Q24. We review 13Fs of major activists to determine core holdings and new purchases. Activist investing is now less about generating a short-term return and more about achieving long-term returns through an active management/investor partnership. Based on data from Vickers, here are some recent new purchases and key holdings of activist investors, as well as other high-profile money managers.

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 again on Wednesday morning as investors weighed new retail sales and producer price data, along with strong earnings from Target. The Commerce Department said that U.S. retail sales fell 0.1% in October after a revised 0.9% increase in September. The Reuters consensus forecast had called for a decline of 0.3%. Meanwhile, producer prices pointed to continued progress on inflation. The Labor Department said that its producer price index for final demand fell 0.5% in October, the largest decrease since April 2020, after a 0.4% increase a month earlier. The Dow rose 0.3%, the S&P 0.2%, and the Nasdaq 0.2%. Crude oil fell nearly 2% to $77 per barrel, while gold traded near $1965 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 have an Under-Weight rating on the Energy Sector. Companies in the sector saw their earnings crushed in the last quarter and things looks bad for this quarter as well. Still, there are individual names we like and there is a trend of consolidation in the sector, all of which has piqued our interest. Exxon Mobil is buying Pioneer Natural and Chevron is buying Hess. We think this might prompt other big oil companies to look around as well. We think Conoco Phillips could be in the market to scoop up a smaller company (possibly Devon, EOG, or Marathon Oil). We don't think there will be any regulatory hurdles, as consolidation could lead oil prices to retreat, which would help the overall U.S. economy as inflation is still high in many areas. So it would seem to be in the government's interest to allow these deals to go through. Energy accounts for only about 3%-4% of total S&P 500 capitalization, but the sector often acts as a hedge to the broader market -- so having exposure to the group is important. Energy tends to zigs when the S&P 500 zags. Indeed, in 2022, the S&P 500 declined 19.4% while the Energy sector advanced 59%. In the August-October period of 2023, the S&P 500 fell more than 8% while the Energy sector declined only 3%. The following is a list of names we like overall in both Oil and Energy.

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.

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.

Value stocks -- a market segment that includes high-yield stocks -- outperformed growth stocks in 2022 for the first time since 2016. Indeed, for the past decade, the performance record has favored growth. But the tide turned in 2022. The rollout of COVID-19 vaccines gave a lift to some of the cyclical companies (energy companies and regional banks) that had lagged in recent quarters, and value stocks outpaced growth stocks over the past year. Meanwhile, the Federal Reserve continues to lift interest rates to fend off inflation, which could possibly cap multiple expansion for growth companies for a few more quarters. Regardless, the value sector is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 2.2%, compared to the 0.9% current yield on the iShares Russell 1000 Growth Index ETF. For our High-Yield Theme Model Portfolio, we are seeking stocks with yields of at least 3.0%. This moves us deep into the value segment of the market.

Value stocks -- a market segment that includes high-yield stocks -- outperformed growth stocks in 2022 for the first time since 2016. Indeed, for the past decade, the performance record has favored growth. But the tide turned in 2022. The rollout of COVID-19 vaccines gave a lift to some of the cyclical companies (energy companies and regional banks) that had lagged in recent quarters, and value stocks outpaced growth stocks over the past year. Meanwhile, the Federal Reserve continues to lift interest rates to fend off inflation, which could possibly cap multiple expansion for growth companies for a few more quarters. Regardless, the value sector is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 2.2%, compared to the 0.9% current yield on the iShares Russell 1000 Growth Index ETF. For our High-Yield Theme Model Portfolio, we are seeking stocks with yields of at least 3.0%. This moves us deep into the value segment of the market.

Stocks were mixed on Monday morning as investors weighed a new round of earnings reports and awaited key inflation data later this week. Tyson Foods shares fell more than 6% after the company posted weak fiscal 3Q sales and earnings and announced that it would close four poultry plants. On the positive side, Berkshire Hathaway shares rose 3% on a 6% increase in second-quarter income, helped by higher investment income and strength in the company's insurance holdings. The Dow rose 0.9%, the S&P rose 0.5%, and the Nasdaq fell 0.2%. Crude oil fell more than 1% to $82 per barrel while gold traded near $1969 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.

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 costs are lower. Yet the U.S. economy is at its largest point in history and still growing. If U.S. corporations weren't innovating, creating new products and services, and moving into new markets and applications, the domestic economy would be contracting, not expanding, and capital would not be flooding into the country. Particularly at this juncture of the market and economic cycles, when uncertainty is high due to high inflation and rising interest rates, we look to innovative companies to successfully navigate the challenges. At Argus, an 88-year-old independent research firm that has innovated a time or two in its long history, we have focused on four types of innovative companies: Industry Disruptors; First to Market; New Product Specialists; and Product & Process Perfectors. Here are some examples of companies, featured in our Innovation Theme Model Portfolio.

April Finishes Strong: Our Monthly Survey of the Economy, Interest Rates, and Stocks

April Finishes Strong: Our Monthly Survey of the Economy, Interest Rates, and Stocks

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.

In this edition, global oil inventories face future; feeling the internet's backbone; and initiating coverage of Qualys; and Lithium Americas, Bausch & Lomb and Macy's.

In this edition, railroads may be in for a bumpy ride; ESG has some opportunities; biotechs innovate; and Constellation Brands, Autodesk, and Tencent.

In this edition, railroads may be in for a bumpy ride; ESG has some opportunities; biotechs innovate; and Constellation Brands, Autodesk, and Tencent.

Value stocks -- a market segment that includes high-yield stocks -- outperformed growth stocks in 2022 for the first time since 2016. Indeed, for the past decade, the performance record has favored growth. But the tide turned in 2022. The rollout of COVID-19 vaccines gave a lift to some of the cyclical companies (energy companies and regional banks) that had lagged in recent quarters, and value stocks outpaced growth stocks over the past year. Meanwhile, the Federal Reserve continues to lift interest rates to fend off inflation, which could possibly cap multiple expansion for growth companies for a few more quarters. Regardless, the value sector is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 2.2%, compared to the 0.9% current yield on the iShares Russell 1000 Growth Index ETF. For our High-Yield Theme Model Portfolio, we are seeking stocks with yields of at least 3.0%. This moves us deep into the value segment of the market.

Our forecast for the average price of a barrel of West Texas Intermediate crude oil in 2023 is now $82, compared to last year's average price of $95. We anticipate a trading range of $100-$65 for the year. The current price is around $76, up from a low of $72 at the beginning of the year but down from the $80 level reached in late January. Last year was a volatile year for oil prices, as the price per barrel ranged from $71-$121. We don't look for as much volatility in 2023. The core drivers behind oil prices in the long term are global demand and global supply. According to the U.S. Energy Information Administration, there was excess supply in 2022: global consumption was 99.4 million barrels per day, while global production was 100.1 million barrels. Forecasts for the next two years call for supply and demand to remain generally in line. If that's the case, we would expect to see oil prices continue to drift lower. Of course, there are always wildcards such as geopolitical developments, ranging from wars (Russia's invasion of Ukraine) to sanctions (Iran, Venezuela). These wildcards can cause prices to fluctuate dramatically -- but absent their occurrence, the global demand-supply outlook suggests the days of triple-digit oil prices are in the rear-view mirror.

Stocks fell on Monday morning, led by declines in the Technology, Communication Services, and Energy sectors. Investors awaited a heavy week for earnings, including reports from Apple, Amazon, and Alphabet, and the Fed's interest rate announcement on Wednesday. A 25-basis-point hike is widely expected, though much of the focus will again be on Chairman Powell's follow-up press conference. Investors will also weigh the government's January employment report on Friday morning. The Dow fell 0.3%, the S&P 0.8%, and the Nasdaq 1.3%. Crude oil traded near $79 per barrel, while gold fell $7 to $1939 per ounce.

In this edition, Fortune Brands remodels its business, capital allocations matter more, utilities stocks set to settle, and Nordstrom, Moderna, and Align Technology.

Our forecast for the average price of a barrel of West Texas Intermediate crude oil in 2022 is now $95, compared to last year's average price of $68. We anticipate a trading range of $140-$80 for the year. The current price is around $87, up from a low of $75 at the beginning of the year but down from the $123 level reached in early March. The core drivers behind oil prices in the near term are global demand and global supply. According to the U.S. Energy Information Administration, there was a supply shortage in 2021: global consumption was 97.4 million barrels per day, while global production was only 95.7 million barrels. This was a reversal from the scene in 2020, when global demand was 91.8 million bb/day and production was 93.9. (As a result, the average price of oil was $40 in 2020.) In addition to the near-term drivers, there are wildcards such as geopolitical developments, ranging from wars (Russia's invasion of Ukraine) to sanctions (Iran, Venezuela). These wildcards can cause prices to fluctuate dramatically. Looking ahead, forecasts call for supply to match demand in 2H22 -- but then to fall somewhat short of demand in 2023. Absent the wildcards, the global demand-supply outlook suggests the days of sharp increases to oil prices are in the rear-view mirror.

Stocks surged on Thursday following positive inflation data, recording their strongest one-day advance since 2020. The Labor Department said that its consumer price index rose 7.7% from the prior year in October, down from 8.2% in September and below the consensus forecast of 7.9%. The core CPI, excluding food and energy, also rose at a lower-than-expected 6.3% rate. On the employment front, first-time claims for state unemployment benefits rose by 7,000 to 225,000 for the week ended November 5, slightly above the consensus forecast. Continuing claims rose to 1.493 million, also up from the prior week and above consensus. The Dow soared 3.70%, the S&P 5.54%, and the Nasdaq 7.35%. Crude oil rose slightly to $86 per barrel, while gold jumped $47 to $1760 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.

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 costs are lower. Yet the U.S. economy is at its largest point in history and still growing. If U.S. corporations weren't innovating, creating new products and services, and moving into new markets and applications, the domestic economy would be contracting, not expanding, and capital would not be flooding into the country. Particularly at this juncture of the market and economic cycles, when uncertainty is high due to high inflation and rising interest rates, we look for innovative companies to navigate the challenges successfully. At Argus, an 88-year-old independent research firm that has innovated a time or two in its long history, we have focused on four types of innovative companies: Industry Disruptors; First to Market; New Product Specialists; and Product & Process Perfectors. Here are some examples of companies, featured in our Innovation theme model portfolio.

Our forecast for the average price of a barrel of West Texas Intermediate crude oil in 2022 is now $100, compared to last year's average price of $68. We anticipate a trading range of $140-$80 for the year. The current price is around $86, up from a low of $75 at the beginning of the year but down from $123 in early March. The core drivers behind oil prices in the near term are global demand and supply. According to the U.S. Energy Information Administration, there was a supply shortage in 2021: global consumption was 97.4 million barrels per day, while global production was only 95.7 million barrels. This was a reversal from 2020, when global demand was 91.8 million bb/day and production was 93.9. (As a result, the average price of oil was $40 in 2020.) In addition to the near-term drivers, there are wild cards such as geopolitical developments, ranging from wars (Russia's invasion of Ukraine) to sanctions (Iran, Venezuela). These can cause prices to fluctuate dramatically. Forecasts call for supply to match demand in 2H22, but then to fall somewhat short of demand in 2023. Absent the wild cards, the demand-supply outlook suggests the days of sharp increases to oil prices are in the rear-view mirror.

Value stocks -- a market segment that includes high-yield stocks -- are outperforming growth stocks in 2022 for the first time since 2016. Indeed, for the past decade, the performance record has favored growth. In nine of the past 10 years, growth stocks have topped value stocks. But the tide may be turning. The rollout of COVID-19 vaccines has given a lift to some of the cyclical companies (energy companies and regional banks) that have lagged in recent quarters, and value stocks have kept up the pace with growth stocks in the past year. Now, the Federal Reserve lifting interest rates to fend off inflation, which will likely cap multiple expansion for growth companies. Regardless, the value sector is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 2.1%, compared to the 0.8% current yield on the iShares Russell 1000 Growth Index ETF. For our High-Yield Theme Model Portfolio, we are seeking stocks with yields of at least 3.0%. This moves us deep into the value segment of the market.

Stocks fell on Tuesday morning, led by declines in the Technology and Consumer Discretionary sectors, as investors awaited the July CPI report on Wednesday. Micron Technology shares fell more than 5% after the chipmaker warned of lower demand and cut its fiscal 4Q sales guidance. Vaccine maker Novavax dropped nearly 30% after reporting a wider-than-expected 2Q loss and slashing its full-year sales forecast. The Dow fell 0.2%, the S&P 0.5%, and the Nasdaq 1.3%. Crude oil traded near $91 per barrel, while gold rose $3 to $1808 per ounce.

Markets have faced difficult times before, with challenging economic environments, wars, disease, banking and housing crises, and inflation much worse than we are seeing now, to name but a few. Of late, stock investors had it very good for a very long time -- but now, finding opportunities requires much more work. There is no secret sauce, but there are principals that are worth reviewing: 1) diversify; 2) look for strong management; 3) look for solid balance sheets; 4) do your homework; and 5) adapt. To assemble this week's list, we looked across several sectors that historically are considered to be the most-shielded from high inflation and high interest rates. We then cross-referenced our coverage universe for companies where our analysts recently raised target prices; that have an Argus Financial Strength rating of at least Medium-High; and that pay dividends of least 3%. Some companies also are featured in our model portfolios (Growth & Income, Equity Income, Growth, and Institutional). Here is our list of companies we believe to be recession-proof, all of which are rated BUY at Argus.

Stocks fell again on Friday morning, adding to Thursday's massive losses, amid growing concerns about the Fed's ability to control inflation, along with the uncertain impact of the war in Ukraine and economic weakness in China. On the employment front, the Labor Department said that the U.S. economy added 428,000 payroll jobs in April, in line with the revised reading for March and above the Bloomberg consensus forecast of 380,000. The unemployment rate held steady at 3.6%, just above the consensus forecast of 3.5%. The Dow fell 0.7%, the S&P 0.7%, and the Nasdaq 0.9%. Crude oil rose to $110.50 per barrel, while gold traded near $1891 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 costs are lower. Yet the U.S. economy, even during the pandemic, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as vaccines) and services and moving into new markets and applications, the domestic economy would not be growing, and capital would not be flooding into the country. Consider that U.S. GDP was approximately $1 trillion in 1930 but was more than $24 trillion at the end of 2021. That's growth of 24-times. Meanwhile, the U.S. population has grown less than three-times during that time span, to 320 million from 120 million. The delta between GDP growth and population growth has been driven, in large part, by innovation.

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 costs are lower. Yet the U.S. economy is at its largest point in history and still growing. If U.S. corporations were not innovating, creating new products and services, and moving into new markets and applications, the domestic economy would be contracting, not expanding. As well, capital would not be flooding into the country. Particularly at this juncture of the market and economic cycles, when uncertainty is high due to the pandemic and upcoming changes to interest rates by the Federal Reserve, we look to innovative companies to navigate the challenges successfully. At Argus, an 88-year-old independent research firm that has innovated a time or two in its long history, we have focused on four types of innovative companies: Industry Disruptors; First to Market; New Product Specialists; and Product & Process Perfectors. Here are some examples of companies that are featured in our Innovation Theme Model Portfolio.

We recently raised our rating on the Energy sector to Over-Weight from Market-Weight. Already strong demand for petroleum products (related to global reopening) is now exacerbated by the war in Ukraine, which has led to broad sanctions on Russia and may exclude this major supplier from the global energy markets. Although we expect other counties to add to supply, we expect energy prices to remain elevated at least through year-end. Energy accounts for 3.6% of S&P 500 market cap; over the past five years, the weighting has ranged from 2% to 10%. We think investors should consider allocating 4%-5% of diversified portfolios to the group. The sector is outperforming thus far in 2022, with a gain of 32.3%. It also outperformed in 2021, with a gain of 47.7%. It underperformed in 2020, with a loss of 37.3%, and in 2019, with a gain of 7.6%. Here are some of the Energy sector companies that are on our BUY List. Some also are featured in our model portfolios (Growth & Income, Equity Income, Growth, and Institutional) and in our Focus List.

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

Value stocks -- a market segment that includes high-yield stocks -- are outperforming growth stocks in 2022. For the past decade, the performance record has favored growth, but the tide may be turning. The rollout of COVID-19 vaccines has given a lift to some of the cyclical companies (energy companies and regional banks) that have lagged in recent quarters, and value stocks have kept up the pace with growth stocks in the past year. Now, the Federal Reserve is poised to lift interest rates to fend off inflation, which will likely cap multiple expansion for growth companies. Regardless, the value sector is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 1.6%, compared to the 0.5% current yield on the iShares Russell 1000 Growth Index ETF. For our High-Yield Theme Model Portfolio, we are seeking stocks with yields of at least 3.0%. This moves us deep into the value segment of the market.

Our forecast for the average price of a barrel of West Texas Intermediate crude oil in 2021 is now $83, compared to last year's average price of $68. We anticipate a trading range of $60-$100 for the year. The current price is around $90, above the midpoint of the range. Our estimates assume OPEC and OPEC+ members continue to coordinate on production, and that global economic activity gradually improves into 2022. Geopolitics also are playing a factor, both on the upside (the Russia and Ukraine situation may reduce supply) and the downside (a new deal with Iran may increase supply). At the same time, our target price also takes into account the long-term downward pressure on crude prices as Peak Oil approaches. Here are the recent average annual prices: $40 in 2020, $57 in 2019, $65 in 2018, $51 in 2017, $43 in 2016, $49 in 2015, $93 in 2014, and $98 in 2013). We also anticipate that President Biden's policies will continue to favor clean energy initiatives rather than carbon-based energy solutions. Our investment rating on the Energy sector is Market-Weight. The U.S. rig-count trend remains supportive and valuations are attractive. Still, Energy companies may be forced to cut production as more electric vehicles are introduced by mainstream automotive OEMs, and as utilities redouble their efforts to add to their renewable generation sources. The current weight for the sector in the S&P 500 is approximately 3.0%, down from the 12% range in 2010. Within the group, we favor companies with strong balance sheets and a history of growing dividends.

Stocks were mostly higher on Monday morning, though the S&P remained on track for its worst month since the pandemic selloff in March 2020. Meanwhile, investors continued to weigh prospects for aggressive interest rate hikes as the Fed works to tamp down inflation. Goldman Sachs said that it expected five hikes in 2022, up from its prior forecast of four, and Bank of America said that it expected seven rate hikes. The Dow was flat, the S&P rose 0.7%, and the Nasdaq rose 2.0%. Crude oil rose slightly to $87 per barrel, while gold traded near $1796 per ounce.

Oil prices are near $85 per barrel of West Texas Intermediate crude and continue a climb that began in April 2020, when the price was below $20. We think these relatively high prices will support the Energy sector, which has outperformed the market this year, in the near term. Within the group, we favor companies with a high exposure to U.S. production, as well as those with clean balance sheets and a history of growing dividends. Here are the Energy companies that are on our Focus List or that are used in our model portfolios.

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.

With major stock indices dancing around all-time highs (seemingly the result of a so-far solid earnings season), the volume of insider transactions is predictably low (also the result of earnings season, with associated trading restrictions). That said, the current low transaction volume is particularly low. Indeed, it is now six consecutive weeks that Vickers' Stock Research has processed fewer than 1,000 weekly insider trades that met the criteria for inclusion in the Weekly Insider Report. The last time we saw such a run was back in September of 2020. One can argue that insiders then and now were/are biding their time, with no sense of urgency to sell stocks but also no great reason to buy shares at lofty levels.