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 are higher at midday, this after weakness earlier in the session that was mostly the result of disappointing guidance from the likes of Intel and KLA Corp. That said, December's headline Personal Consumption Expenditures price index appears to have resonated with investors who seem to be increasingly of the opinion that the Fed has indeed set the stage for a soft landing of the U.S. economy. PCE rose 0.2%, following a 0.1% decline in November and leaving annual PCE unchanged at 2.6%. Core PCE also rose 0.2%, up from 0.1% in November and bringing the annual rate to 2.9% from 3.0% last month. Elsewhere, Personal Spending rose 0.7%, which was higher than the expected increase of 0.5%. Personal Income drifted lower, rising 0.3% to match expectations but down from 0.4% in November. As well, solid earnings from American Express and Colgate-Palmolive are adding to a positive mood as the trading week draws to a close.

Investors generally are bullish to start each year, putting new money to work in the market and often benefitting from solid market returns in January and the first quarter. To draw this conclusion, we analyzed data collected on S&P 500 performance from 1980-2023. By our calculations, the S&P 500 in January has advanced on average 1.0%, while the 1Q has generated average market gains of 2.09%. Though not as strong as returns in 2Q (2.9%) and 4Q (4.77%), the first quarter's performance gain is better than the third quarter's (0.26%). The first quarter is fairly consistent as well, with a "win percentage" of 66%. This means that stock returns are positive in 1Q roughly two years out of three, and compares to winning percentages of 65% in 2Q, 61% in 3Q, and 82% in 4Q. To be sure, 1Q has posted its share of clunkers, including 2022 (down 4.9%), when investors started to understand the scope of the Federal Reserve's rate hikes. Let's also not forget 2020, when the coronavirus emerged and the S&P 500 dropped 20%. In 2009, after the collapse of Lehman Brothers and as the U.S. economy was struggling with a deep recession, stocks fell 11.7%. And in 2001, as the "dot-com" bear market started growling, stocks fell 12%. This time around, stocks are riding positive momentum from a double-digit 4Q22. The S&P 500 might not jump the 7% it did in 2023, but falling inflation, low interest rates, and an improving earnings outlook should help stocks.

10 Investment Themes for 2024

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 Linde Plc. (LIN); Crowdstrike Holdings Inc (CRWD); Advanced Micro Devices Inc. (AMD); Vertex Pharmaceuticals, Inc. (VRTX) and the Focus List deletions are Adobe Inc (ADBE); Albemarle Corp. (ALB); Catalent Inc. (CTLT); Intel Corp. (INTC).

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.

Monday Tee Up: Labor (The Fed's Other Job)

Two weeks ago, the weekly volume of insider transactions was very low because of trading restrictions placed on executives, directors, and beneficial owners during earnings season. Still, we noted a "green shoot" in the form of bullish trading activity by insiders at companies that list on the tech-heavy Nasdaq. This week, the volume of insider transactions reported by Vickers Stock Research is building, the overall trend is increasingly positive, and the Nasdaq green shoot has bloomed. Almost 1300 transactions meet the criteria for inclusion in Vickers' latest Weekly Insider Report. That compares to 580 the week prior, but is not yet to the 1800 transactions typically seen once earnings season ends. Vickers Total One-Week Sell/Buy Ratio is 1.23 this week. That's good news on a scale where any reading below 2.00 is bullish. But the clear outperformer remains the Nasdaq one-week ratio, which this week logs in a 0.89. That is not only below the 2.00 line that indicates bullish sentiment, it is below the 1.00 line that indicates insiders are actually buying stock more often than they are selling stock. That is not seen often, and is a very solid indicator that these insiders are optimistic. The above is having a positive impact on Vickers' long-term (eight-week) sell/buy ratios - and that's good news, as we often get the best signals from this data when the two ratios align.

Stocks rose modestly on Friday morning, extending Thursday's rally. Exxon shares rose after the company reported strong 1Q earnings that topped the consensus forecast, though sales were down from the prior year. Chevron also posted strong earnings, helped by growth in its refining business. Amazon shares fell, despite strong first-quarter results, on concerns about slowing growth in the company's cloud business. The Dow rose 0.5%, the S&P 0.5%, and the Nasdaq 0.2%. Crude oil rose more than 2% to $76.50 per barrel, while gold traded near $1999 per ounce.

We recently raised our rating on the Technology sector to Over-Weight from Market-Weight. As interest rates start to fall, IT demand in enterprise and data center markets is holding up. And mounting interest in ChatGPT could herald the age of AI, which could be a huge industry driver. Over the long term, we expect the Technology sector to benefit from pervasive digitization across the economy, greater acceptance of transformative technologies, and the development of the Internet of Things (IoT). Healthy company and sector fundamentals are also positive. For individual companies, these include high cash levels, low debt, and broad international business exposure. The sector is outperforming the market thus far in 2023, with a gain of 12.4%. Tech underperformed the market in 2022, with a loss of 28.9%, and outperformed in 2021, with a gain of 33.4%. The P/E ratio on projected 2023 earnings is 23, above the market multiple. Earnings are expected to grow 14.5% in 2023 after having fallen 3.3% in 2022. Earnings rose 37.9% in 2021 and 7.7% in 2020. The sector's debt ratios are below the market average, as is the average dividend yield of 0.5%. Here is how we use our analysts' Technology sector ideas in our Focus List and Model Portfolios.

According to the Consumer Price Index report released yesterday, top-level inflation pressures eased again last month in the U.S., continuing a downward trend that started last summer. But core prices ticked higher. The CPI numbers generally were in line with consensus expectations. The Bureau of Labor Statistics reported a 5.0% increase in overall inflation year-over-year through March, compared to a 6.0% rate through February and a 9.1% rate back in June. The core rate, excluding the impact of food and energy prices, rose slightly -- to 5.6% in March, versus 5.5% in the prior month. Segments of the economy with stable/easing prices month-over-month included gasoline (-4.6%), used cars and trucks (-0.9%), and medical care Services (-0.5%). The overall rate was propped up by transportation services (1.4%), shelter (0.6%), and new vehicles (0.4%), which tend to have stickier prices that are less likely to fall sharply. We continue to think that the June 2022 CPI rate of 9.1% will prove to be the peak reading for the index in this cycle, as the housing market cools, supplies of new vehicles are replenished, and the price of oil stays below $90 per barrel. Even so, the Federal Reserve still has wood to chop in order to bring core inflation down to its target of 2.0%. We look for one more 25-basis-point rate hike by the central bank at its next meeting in early May.

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

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 Cracker Barrel Old Country Sto (CBRL); DraftKings Inc. (DKNG); Intel Corp. (INTC); J.M. Smucker Co. (SJM) and the Focus List deletions are Restaurant Brands Intl In (QSR); Monster Beverage Corp. (MNST); Expedia Group Inc (EXPE); Fox Corporation (FOXA).

Stocks rose on Thursday, led by the Technology and Consumer Discretionary sectors, as investors weighed new GDP and labor market data, and awaited a key inflation report on Friday morning. The Commerce Department said that the U.S. economy expanded at a 2.6% annualized rate in 4Q, down slightly from its prior estimate of 2.7%, while weekly unemployment claims pointed to a still tight labor market. The Labor Department said that first-time claims for state unemployment benefits rose by 7,000 to 198,000 for the week ended March 25, slightly above the consensus forecast. Continuing claims rose by 4,000 to 1.689 million. The Dow rose 0.43%, the S&P 0.57%, and the Nasdaq 0.73%. Crude oil traded near $74 per barrel, while gold rose $15 to $1999 per ounce.

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

Monday Tee Up: Data Hat Trick Includes the Fed, Jobs, and Earnings

At the beginning of any year, there are always many moving parts for investors -- including corporate insiders. Of late, investors have positioned themselves for the end of a very tough 2022 and established themselves for what most hope is a better 2023. They've also considered earnings season; the war in Ukraine; inflation; the status of the supply chain; a relentlessly hawkish Fed; the state of crypto; and on and on. Some of those issues are improving or look to get better soon; some are not; and some are anyone's guess. In keeping with all of the above, volatility in stocks remains the order of the day. But based on broader, long-term data from Vickers Stock Research, our message on insider sentiment has been -- and remains -- that corporate executives, directors, and beneficial owners seemingly anticipate more-normal returns from stocks in 2023 than was the case in 2022. Indeed, Vickers Total Eight-Week Sell/Buy Ratio has been improving (falling) since December. On a sector basis, we note that selling was the greatest last week in Technology and also was notable in Consumer Discretionary and Industrials. Meanwhile, buying activity nearly outpaced selling in the Financial sector.

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

Stocks fell on Monday morning, reversing course after Friday's rally, as investors awaited the Fed's policy announcement and the October employment report later this week. In China, a COVID lockdown forced the closure of Shanghai Disneyland. Discontent with COVID restrictions also prompted workers to flee a Foxconn plant in China, disrupting the production of iPhones at the plant. The Dow fell 0.1%, the S&P 0.3%, and the Nasdaq 0.7%. Crude oil traded near $87 per barrel, while gold fell $4 to $1641 per ounce.

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

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.

Monday Tee-Up: No Summer Doldrums on Wall Street

April was a brutal month for stocks, with few equities escaping unscathed. The S&P 500 fell almost 11%, the Nasdaq and the QQQs both plummeted 15.6%, the DJIA fell 7%, the Russell 2000 tumbled 12.6%, and the S&P MidCap 400 dropped 10%. It was the worst month for the Nasdaq and QQQs since October 2008.

The overall Insider Index from Vickers Stock Research reflects improving sentiment, having recently moved into the neutral zone (from bearish) for the first time since October 2020. Current sentiment from this long-term (six months) barometer is in stark contrast to the extremely bearish readings seen in early July 2021, when the index was at its most-bearish level since it was created in 1987. Turning to shorter-term sentiment readings, Vickers' Nasdaq One-Week Sell/Buy Ratio has improved to 1.53 from last week's 1.67, marking a second consecutive week in the bullish territory that starts under 2.00. The Nasdaq Eight-Week Sell/Buy Ratio has also turned bullish at 1.91, improving from last week's 2.03 (neutral) and marking its most-bullish level since May 2020. From a whole-of-market perspective, Vickers' Total Eight-Week Sell/Buy Ratio, which measures activity across the NYSE, Nasdaq, and ASE, is approaching bullish territory with a reading of 2.05. Despite the ongoing volatility in stocks since the start of 2022, insiders seem to view the current market turbulence as a long-term buying opportunity.

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. Since 2010, the Russell 1000 Growth Index has climbed more than 600%, compared to an advance of 300% for the Russell 1000 Value Index. In nine of the past 10 years, growth stocks have topped value stocks. That hasn't always been the case. In the 2000-2010 decade, including the Great Recession, value stocks were better performers than growth stocks, advancing an admittedly low 8% -- but still better than growth, which declined 15% during the decade. Value investors trace their roots to the famous "Security Analysis" textbook, written by Ben Graham, an economics professor at Columbia University. Warren Buffett was one of his students. The rollout of COVID-19 vaccines has given a lift to some of the cyclical companies (energy firms 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 high inflation, which will likely cap multiple expansion for growth companies. In any event, value 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 list this week, we screened our coverage universe for stocks that are BUY-rated by Argus Research analysts, have a Financial Strength rating of at least Medium, and have a yield of 3.0% or higher. Here are 10 stocks that meet the criteria.

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.

Stocks rallied on a strong GDP report on Thursday morning, recovering from a late-day selloff on Wednesday after the Fed's policy statement and comments from Fed Chair Jerome Powell. The Commerce Department said that the U.S. economy expanded at a 6.9% annual rate in 4Q21, up from 2.3% growth in the third quarter and well above the Reuters consensus forecast of 5.5% growth. GDP also rose 5.7% for the full year after declining 3.4% in 2020. The Dow rose 1.3%, the S&P 500 1.0%, and the Nasdaq 0.8%. Crude oil fell to $87 per barrel, while gold fell $35 to $1795 per ounce.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

While stocks have fallen since the start of 2022, current insider sentiment remains reassuringly benign. Indeed, the overall Insider Index from Vickers Stock Research is resting at its most-attractive level since November 2020. As expected now that earnings season is in full swing, insider trading volume has dropped from recent robust levels, with only 856 insider transactions meeting the criteria this week for inclusion in Vickers' Weekly Insider Report. Turning to the current sell/buy ratios, Vickers' Total One-Week Sell/Buy Ratio has improved to 2.34 from 4.35 last week, offering evidence that insiders are not in fear of the market's current pullback. Still, insiders are not aggressively buying the current dip either -- in contrast to their behavior during the first week of December, when the S&P 500 was trading at similar levels to today and the Total One-Week Sell/Buy Ratio came in at 1.69. For reference, Vickers considers a ratio of 2.0-2.5 to be neutral, with readings above 2.5 pointing to bearish sentiment and readings below 2.0 signaling a bullish mood.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

Explosive growth in mobile and fixed-line traffic is driving demand for robust data centers that are enabled for artificial intelligence (AI) and can manage rising and increasingly-complex traffic flow. Two-thirds of the world will have internet access by 2023, while the number of connected devices is expected to grow to three-times the global population. IoT (machine to machine or M2M) connections are expected to grow at a 30% CAGR. Security is a top need, as "denial of service" attacks are set to double by 2023. To handle the challenges of managing, storing, and securing data amid this explosive traffic growth, data centers will need to harness the power of artificial intelligence. AI enhances data center capabilities though the power of machine learning, inference, and deep learning, all in an application-accelerated environment. The AI data center also makes use of non-traditional and emerging technologies that provide more computing power than traditional CPU-based architectures. These include GPU Compute from NVidia and Tensor cores from Google/Alphabet. As of mid-year 2021, about 600 hyperscale data centers were in operation around the world, up from about 500 at year-end 2019 and double the number from five years ago. The bulk of data center construction is by hyperscale providers including AWS from Amazon.com, Microsoft Azure, Google Cloud from Alphabet, as well as with Chinese companies including Baidu and Alibaba. Co-location companies are another major data center driver, including Equinix and Digital Realty Trust. International Business Machines is providing hybrid cloud services that bridge public and private clouds. Other data center suppliers include semiconductor companies Broadcom, Marvell Technology, Intel, and Advanced Micro Devices. Stocks on the Argus Research BUY list that are in position to benefit include the following.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.

The Vickers Top Insider Picks is a daily report that utilizes a proprietary algorithm to identify 25 companies with compelling insider purchase histories based on transactions over the past three months.