Management's ability to "raise guidance" can often be a catalyst for market-beating returns in the quarters ahead. The fourth-quarter earnings season has crossed the 95% mark and is wrapping up, with blended earnings (actual results and the consensus for those still to report) showing a year-over-year gain of almost 10%, according to Refinitiv. That is considerably better than the 4%-7% advance expected at the start of the earnings period. Leading the outperformance were strong gains in Communication Services earnings, up 53%. On the flipside, Energy (like last quarter) is performing the worst, down 22%. Our analysts are always on the lookout for companies that boost their outlooks during earnings season. Here is an initial list of BUY-rated companies in Argus' Fundamental Universe of Coverage at which management raised guidance or increased its outlook during the 4Q23 EPS reporting season.

We have three strategic asset allocation models, based on risk-tolerance levels: Conservative, Moderate, and Aggressive. We make regular tactical adjustments to the models, based on our outlooks for the capital markets. January was a solid month for equity investors, as the S&P 500 advanced 1.6%, compared to a 0.1% increase for the fixed-income benchmark ETF AGG. From an asset-allocation standpoint, our Stock-Bond Barometer model slightly favors stocks over bonds for long-term portfolios, in light of the recent sharp decline in bond yields. Drilling down into equities, we are over-weight on large-caps. We favor large-caps for growth exposure and financial strength, while small-caps are selling at historical discounts relative to large-caps and offer value. Moving to the international arena, U.S. stocks have outperformed global stocks over the trailing one- and five-year periods. In terms of growth versus value, we anticipate that over the long term, growth, led by the Tech, Consumer, and Healthcare sectors, will top returns from value, led by Energy, Real Estate, and Materials, due to favorable secular and demographic trends. As for the fixed-income segment of a portfolio, we break bonds into four areas: Core, such as the industry benchmark ETF AGG or Treasuries; Inflation-Indexed; Opportunistic, such as securitized debt, corporate debt, high-yield or floating bonds; and Cash. Of these, we are focused on Core and Opportunistic. On duration, we recommend a shorter term. Last are Alternatives. Given the early stage of the current bull market, we think Alternatives are less desirable in the growth portion of our asset-allocation models. Our recommended weighting is 0%-2%.

Stocks closed higher on Thursday as investors digested new economic data. The January ISM Manufacturing PMI index registered a reading of 49.1, up from 47.1 in December, with growth in new orders, production, and prices, while backlogs, employment and inventories contracted. The S&P Global's reading of 50.7 is up from 47.9 in December, with an increase in new orders, and both input and output prices and employment increased fractionally. U.S. construction spending rose 0.9% in December, following a 0.4% increase in November. Meta Platforms (META) reported after the close and was up more than 14% within an hour after releasing results. Likewise, Amazon.com (AMZN) rose nearly 13%. The S&P 500 closed up 1.3%, the Dow 0.1% and the Nasdaq gained 1.3%. Crude oil fell to just below $73 per barrel, while gold was up $5 to $2072 per ounce.

Dividend income is often overlooked amid gyrations in the stock market. But dividends are an important element of return. Dividend income accounted for 42% of the total return of the S&P 500 between 1930 and 2012, according to Hartford Funds. And that's just the average. In some of those decades, dividends accounted for more than 50% of total returns and even 100% of returns. More recently, dividends have accounted for a smaller portion of returns, at around 15%-20%. Not all dividends are created equal, though, and it is important to understand the difference between the two main categories: high-yield stocks and dividend-growth stocks. High-yield stocks typically have dividends that pay out in the 5%-8% range. Though the income appears attractive, the share prices of high-yield stocks may be at risk. Dividend-growth stocks typically have lower yields, often in the 1.0%-2.5% range. But the lower-yielding dividends are not likely to be a huge component of cash flow, leaving management teams with other value-additive options for deploying cash. Further, while the yields are not as high, management teams may be more likely to boost the payouts over time, as earnings grow.

The major stock indices seem to be digesting their Thanksgiving dinner, and by that we mean digesting the recent spike higher since October 27. Of late, the indices have drifted sideways, bullishly working off overbought momentum conditions in time and not price. The S&P 500 (SPX), S&P 100, Nasdaq (QQQ), Nasdaq 100, S&P MidCap 400 (MDY), and Russell 2000 (IWM) all have paused at chart resistance or overhead supply (prior buying), which is not surprising.

For a second week, insider-transaction data from Vickers Stock Research is generating bullish signals. Last week, insider-transaction volume was low as trading restrictions are in place during earnings season. But trades that did occur resulted in bullish insider-sentiment measures, especially open-market transactions (the most meaningful when considering sentiment).

The worry over interest rates, both market rates, and Fed-controlled rates has disappeared faster than a kid's Halloween candy. Stocks rocketed higher again on Thursday, with the S&P 500 (SPX) rising 1.9%, and the Nasdaq and Nasdaq 100 gaining 1.8%. The real story was in the long-forgotten rest of the market, with the Russell 2000 jumping 2.7% and the S&P 500 Equal Weight and S&P MidCap 400 each popping 2.2%.

An old saying (that we have tweaked a bit) goes something like this: The faster the retreat, the quicker the slide will be complete. When a stock, a sector, an index, a commodity, a Treasury bond, a currency, or any other instrument falls out of bed and drops from the second to the first floor, a strong bounce is usually near. We have talked about the importance of price slopes many times -- and when they are steep or parabolic (be that to the downside or the upside), the best advice for those playing the direction is be ready for a sharp reversal. In other words, don't get overly greedy on the way up and don't get overly panicked on the way down.

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

The major indices finished slightly lower on Thursday as investors weighed a new round of earnings reports from Qualcomm, PayPal, and other major companies. Apple and Amazon also reported above-consensus sales and earnings after the close. On the employment front, first-time claims for state unemployment benefits rose by 6,000 to a seasonally adjusted 227,000 for the week ended July 29, in line with the Reuters consensus forecast. Continuing claims rose by 21,000 to 1.7 million. The data came ahead of the government's July employment report on Friday morning. The consensus calls for 200,000 new payroll jobs, down from 209,000 in June, and a steady unemployment rate of 3.6%. The Dow fell 0.19%, the S&P 0.25%, and the Nasdaq 0.10%. Crude oil rose nearly 3% to $82 per barrel, while gold fell $6 to $1969 per ounce.

The second quarter earnings season kicks off with big banks reporting this week. The forecast calls for a year-over-year decline in S&P 500 EPS of 5-6%, which would be the third quarter in a row of falling EPS. But the trend seems to be toward improvement. The first-quarter earnings season exceeded very low expectations while not quite crossing over into positive territory. And calendar 1Q23 earnings were by several metrics better than 4Q22 results. Heading into 1Q23 EPS season, consensus expectations were for a decline of 6%-7%, while the actual decline was in the area of 1%. Drilling deeper, nearly four-fifths of companies exceeded consensus expectations in 1Q, compared to the normal 75%. What is more for 1Q23, the average beat against expectations was around 6.5% -- much improved from 4Q. Turning to our estimates, we have again adjusted our 2023 EPS forecast, but the net effect is nil. We have lowered expectations for 2Q23 EPS to a decline of 4.3%; previously, we had been modeling flattish 2Q23 EPS year over year. We also moderated our 3Q23 forecast, to growth of less than 3%; we had been modeling 4%-plus growth. Simultaneously, we increased our 4Q23 EPS growth forecast to 11%, against a very weak comparison; we had earlier modeled mid-single-digit growth in 4Q23 EPS. Looking further ahead, our 2024 forecast of $245 implies 8% growth from 2023, reflecting our expectations that earnings growth will begin to "normalize" in the high-single-digit range once the Federal Reserve is finished hiking interest rates. That's something to look forward to, and likely a factor behind the stock market's positive return thus far in 2023.

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

Dividend growth is one of our most-important investment themes in 2023. We think companies that raise their dividends consistently at a double-digit rate are sending off three important signals amid the recent market volatility: 1) the company's balance sheet is strong enough to pay a dividend; 2) management is focused on shareholder returns; and 3) management is confident enough in the near-term outlook to raise the payout aggressively. This third factor is especially important during periods of economic weakness. On average, the dividends of the companies in the S&P 500 have grown 2.0% per year since 1970. At times, the dividend growth rate has been negative, for example during economic slowdowns in the early 1970s, 1980s, and 1990s; the bear markets of 2000, 2008, and 2009; and the COVID-19 pandemic period. At the other side of the spectrum, double-digit dividend growth is rare. Only in six of the past 50 years has the average dividend growth rate been 10% or higher. More recently, dividend growth accelerated to 7% in 2018-19, which was a good period for stocks as trade wars calmed and the Federal Reserve took a dovish stance on interest rates. But dividend growth slowed sharply in 2020 due to the pandemic, with the rate turning negative; growth has been negligible-to-moderate since then. At this stage of economic and market cycles, we recommend that investors focus on dividend growth instead of dividend yield. Specifically, we are bullish on companies that have boosted their dividend at high growth rates for many years consecutively.

The S&P 500 rose 1.5% on Friday, closing at its highest level since August 18, 2022, and breaking resistance near 4,200. The index was led by 2023 laggards Basic Materials (XLB), Energy (XLE), Industrials (XLI), Financials (XLF), and Real Estate (XLRE) -- so perhaps some of the reversion to the mean we recently discussed is starting to gain some traction. Strength was also seen in Consumer Discretionary, a 2023 leader.

A good trivia question -- be it about sports, politics, the weather, the stock market, whatever. -- can confound the brightest person in the room or the person with the best memory. Along those lines: What major stock market peaked in 1989 and remains below that peak? Anyone who has been in the stock market for a long time might well know the answer -- which is, of course, the Nikkei 225.

We don't often see stock-market polls from fellow technicians, but invitees at an event celebrating the 50th anniversary of the Chartered Market Technicians Association in NYC were asked to forecast how the S&P 500 (SPX) would end the year. With the index drifting sideways for the past year, it's not surprising that a majority (55%) expected the index to remain range bound between 3,750 and 4,250 -- which is where we have been for most months going back to 2022. This is one of the basic tenets of technical analysis: the trend is your friend, until it isn't. It also is known as recency bias: what recently happened is expected to continue, as it is the freshest in the mind of most investors. The poll did tilt toward the bullish side, with 31% looking for a move on the SPX to above 4,500, while 11% were bearish.

After OPEC's additional supply cuts in the beginning of April and subsequent WTI pop to the $80 area, crude oil has been as quiet as a mouse...until Wednesday. WTI shot up by $1.75/barrel or 2.2% to close at $83.34 -- the highest close since November 16. Oil has been range-bound since about the middle of November (almost five months) between $64 and $83. The decline in March below $70 was a false breakdown, which are usually bullish. Yesterday's gain was an initial step to an upside breakout, but we would like to see some follow-through action.

It is not hard to figure out what is keeping the S&P 500 (SPX) above water in 2023 -- and that is the largest stocks in the index. For the year, the index has managed a 3% gain thanks to its heavy market-cap construction. Apple represents almost 7% of the SPX, while MSFT is 6%, Alphabet (GOOGL/GOOG) is 3.2%, AMZN is 2.5%, NVIDIA is 1.8%, BRK.B is 1.7%, TSLA is 1.5%, and META is 1.3%.

The fourth-quarter earnings season is now in the rear-view mirror. That's a good thing, as S&P 500 earnings fell for the first time since the pandemic, declining 2.8% during the period. But a trend reversal is not expected until 2H23, and preliminary indications from Refinitiv call for an EPS decline of 3.9% in the first quarter. Let's take a deeper dive. Last quarter, the lagging sectors included Communication Services (sector earnings were down 26% year-over-year), Basic Materials (-19%), Consumer Discretionary (-17%), and Financial Services (-10%). The all-import IT sector, which accounts for more than 20% of S&P 500 EPS, saw earnings decline 9%. The savior was Energy, as earnings from this group jumped 59%. Looking ahead, Technology is forecast to decline again, while Healthcare (which accounts for 15% of earnings) is expected to drop sharply as well. Energy is starting to cycle against difficult comparisons, and growth is expected to slow in 1Q23. The earnings trends are expected to smooth and improve by the fourth quarter. At that time, analyst estimates now call for 13% year-over-year growth for Technology, and 29% for Communication Services. Both Consumer sectors are now forecast for double-digit growth, and overall S&P 500 EPS growth in 4Q23 is estimated at 10%. That's something investors hope occurs.

So far this year, the Dow is up about 2%, the S&P is higher by around 8%, and the Nasdaq is up some 15%. That has caught the attention of investors who suffered through a very difficult 2022. Also so far this year, insider sentiment, gleaned from weekly data compiled by Vickers Stock Research, had not offered any indication that stock prices were out over their skis. But the most recent data from Vickers has caught our attention, and suggests a little consolidation may be in order.

Dividend income, an important element of total return, is often overlooked amid gyrations in the stock market. Between 1930 and 2012, dividend income accounted for 42% of the total return of the S&P 500, according to Hartford Funds. And that's just the average. In some decades, dividends accounted for more than 50% of total returns and even 100% of returns. More recently, dividends have accounted for 15%-20% of returns. Still, in 2018, dividend payments softened the blow when most market indices declined as the Federal Reserve hiked rates. The pattern was repeated in 2022 as well. Not all dividends are created equal, though, and it is important to understand the difference between the two main categories: high-yield stocks and dividend-growth stocks.

Monday Tee Up: Inflation, Midterms, Earnings

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: Key Inflation Data, CPI & PPI

As we start the second half of 2022, we remain disciplined by looking at stocks and sectors in which we have confidence. Stocks took a beating in the first half, and at times like this, investing principles are critical. We focus on fundamentals, diverse portfolios, strong managements, and growth stocks trading at reasonable prices. This week we look at Industrials, having examined Basic Materials last week. These are perhaps the two least flashy sectors -- and while Basic Materials and Industrials may seem boring, we don't consider the stocks on this week's list to be dull. The companies we've selected within Industrials have solid fundamentals and growth outlooks. Challenges in the supply chain persist, but have eased, and the U.S. trade deficit signaled some shifting in the last report. Exports rose 1.2% in May to $255 billion. This is a great opportunity for U.S. companies, as international buyers look towards American products. The Industrials sector accounts for 8% of the S&P 500, and includes industries such as aerospace and defense, construction and building products, heavy equipment and machinery, and transportation. Over the past five years, the sector weighting has ranged from 7% to 12%. We think investors should Over-Weight the sector and consider allocating about 8% of their diversified portfolios to stocks in the group. The sector is slightly outperforming the S&P 500 thus far in 2022, with a loss of 16.5% compared to the S&P's loss of 18%. The following are some of our BUY-rated Industrials companies, all of which are rated BUY, have a Financial Strength rating of Medium-High or higher, and pay a dividend. We feel these companies are best in class for the sector.

Dividend income, an important element of total return, is often overlooked amid gyrations in the stock market. Between 1930 and 2012, dividend income accounted for 42% of the total return of the S&P 500, according to Hartford Funds. And that's just the average. In some decades, dividends accounted for more than 50% of total returns and even 100% of returns. More recently, dividends have accounted for 15%-20% of returns. Still, in 2018, dividend payments softened the blow when most market indices declined as the Federal Reserve hiked rates. The pattern is being repeated in 2022 as well. Not all dividends are created equal, though, and it is important to understand the difference between the two main categories: high-yield stocks and dividend-growth stocks.

Earnings, Economy Roll along through Market Wreckage

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 plunged on Thursday amid weak earnings and disappointing guidance from Facebook owner Meta Platforms, which warned of increased competition and a substantial revenue hit from Apple's new advertising tracking policy. FB shares fell more than 26%. On the employment front, first-time jobless claims fell to 238,000 for the week ended January 29, down from 261,000 a week earlier and below the consensus forecast of 245,000. Continuing claims fell to 1.628 million, down from the prior week but slightly above consensus. The Dow fell 1.45%, the S&P 2.44%, and the Nasdaq 3.74%. Crude oil traded near $90 per barrel, while gold rose $2 to $1806 per ounce.

Often overlooked amid gyrations in the stock market is dividend income, which is an important element of total return. Between 1930 and 2012, dividend income accounted for 42% of total return of the S&P 500, according to Hartford Funds. And that's just the average. In some decades, dividends accounted for more than 50% of total returns and even 100% of returns. More recently, dividends have accounted for 15%-20% of returns. Still, in 2018, dividend payments softened the blow when most market indices declined as the Federal Reserve hiked rates. But not all dividends are created equal, though, and it is important to understand the difference between the two main categories: high-yield stocks and dividend-growth stocks.

Stocks finished mostly higher on Thursday as investors weighed a new round of earnings reports and continued to assess the Fed's tapering plan. Employment data was strong. The Labor Department said that first-time claims for state unemployment benefits fell to 269,000 for the week ended October 30, down from 283,000 a week earlier and below the Bloomberg consensus of 275,000. Continuing claims of 2.105 million were also down from the prior week and below consensus. The data came ahead of the government's October employment report on Friday morning. The consensus calls for the addition of 450,000 new payroll jobs after an increase of 194,000 in September, and a decrease in the unemployment rate to 4.7%. The Dow fell 0.09%, the S&P rose 0.42%, and the Nasdaq rose 0.81%. Crude oil fell 2% to $79 per barrel, while gold rose $29 to $1793 per ounce.

Stocks finished mostly higher on Thursday as investors weighed a new round of earnings reports and continued to assess the Fed's tapering plan. Employment data was strong. The Labor Department said that first-time claims for state unemployment benefits fell to 269,000 for the week ended October 30, down from 283,000 a week earlier and below the Bloomberg consensus of 275,000. Continuing claims of 2.105 million were also down from the prior week and below consensus. The data came ahead of the government's October employment report on Friday morning. The consensus calls for the addition of 450,000 new payroll jobs after an increase of 194,000 in September, and a decrease in the unemployment rate to 4.7%. The Dow fell 0.09%, the S&P rose 0.42%, and the Nasdaq rose 0.81%. Crude oil fell 2% to $79 per barrel, while gold rose $29 to $1793 per ounce.

Last week, we detailed positive trends in insider sentiment, even in the face of light transaction volume (the result of trading restrictions during earnings season). This week, Vickers Stock Research reports that insider transaction volume has started to increase as earnings season comes to a close. Broadly put, the positive short-term trends from last week have not held, though the current data is not bad enough to damage longer-term trends.

The 1Q21 EPS season is mostly in the books, with retailers the last group to report over the next two weeks. The results were impressive -- but came against an easy comparison with last year's 1Q, when the world started to shut down to fight COVID-19. Through early May, Refinitiv reported that S&P 500 earnings rose 50.4% year over year -- the best quarter since 1Q2010. Some 87% of companies have come in ahead of expectations, up from the prior four-quarter average of 76%, according to Refinitiv. Where is the growth? Consumer Discretionary remains atop the list with a 170% earnings increase. Financials is second at 130%. Only Industrials is expected to remain negative -- with a 2% decline. Even the Energy sector, expected to have an earnings decrease at the start of the quarter, is now poised for 8% growth. Our analysts are always on the lookout for companies that raise their outlooks during earnings season. Management's ability to "raise guidance" can often be a catalyst for strong returns in the quarters ahead. Here are 20 BUY-rated companies in Argus coverage at which management has raised guidance or increased its outlook during the 1Q21 EPS reporting season.

April 2021 lived up to its billing as the best stock month of the first half. During April, the S&P 500 appreciated 5.2%, better than any month so far this year; March was closest with a 4.2% gain. Through the end of the fourth month, the S&P 500 is up 11.3% year-to-date.

Stocks rose again on Monday morning, continuing their recent rally, amid optimism about federal stimulus spending, the ongoing vaccine rollout, and the decline in new U.S. coronavirus cases. Prior to the open, 59% of S&P 500 companies had reported 4Q earnings, according to FactSet, and 81% of these companies had topped expectations. The Dow rose 0.4%, the S&P 0.3%, and the Nasdaq 0.4%. Crude oil traded near $58 per barrel, while gold rose $26 to $1839 per ounce.

The 3Q20 EPS season is mostly in the record books, with retailers the last group to report. The results were not pretty, but were better than 2Q20. Through mid-November, Refinitiv reported that S&P 500 earnings declined in 3Q at a 7.4% rate -- a vast improvement from the prior quarter's 30.5% decline. Excluding the Energy sector, earnings declined at a 3.2% rate. Of the 462 companies in the S&P 500 that have reported earnings to date for 20Q3, 84% have reported earnings above analyst expectations. This compares to a long-term average of 65% and prior four-quarter average of 73%. Our analysts are always looking for companies that raise their outlooks during earnings season. Management's ability to "raise guidance" can often be a catalyst to strong returns in the quarters ahead. There were not many in this most-recent period. Here are 12 BUY-rated companies in Argus Coverage for which management has raised guidance or increased its outlook during the recent EPS reporting season.

As earnings season moves towards completion, the volume of insider transactions is returning to normal, lending increased significance to the proprietary sentiment indicators from Vickers Stock Research. For three consecutive weeks during the heart of earnings, insiders turned bearish in a manner that exceeded the norm for that time on the calendar. During the bearish turn, the DJIA moved from 28,586 (close on 10/12/20) down to 26,501 (close on 11/2/20). Insiders then became bullish -- and one week later, the DJIA was back up to 28,323 (close on 11/6/20). So what gives this week?

As earnings season moves towards completion, the volume of insider transactions is returning to normal, lending increased significance to the proprietary sentiment indicators from Vickers Stock Research. For three consecutive weeks during the heart of earnings, insiders turned bearish in a manner that exceeded the norm for that time on the calendar. During the bearish turn, the DJIA moved from 28,586 (close on 10/12/20) down to 26,501 (close on 11/2/20). Insiders then became bullish -- and one week later, the DJIA was back up to 28,323 (close on 11/6/20). So what gives this week?

Stocks finished higher on Thursday, recovering from midday losses, as investors weighed weekly employment data, mixed corporate earnings, and prospects for a new fiscal stimulus package. First-time claims for state unemployment benefits fell to 1.186 million, below the consensus of 1.415 million. While this was the lowest weekly reading since March, initial claims still topped 1 million for the 20th straight week. Continuing claims, reported with a one-week lag, fell to 16.107 million from 16.951 million a week earlier. The data came ahead of the government's July employment report on Friday morning. The Reuters consensus calls for the addition of 1.58 million payroll jobs, down sharply from 4.8 million in June, and a drop in the official unemployment rate to 10.5% from 11.1%. The Dow rose 0.68%, the S&P 0.64%, and the Nasdaq 1.00%. Crude oil fell slightly to $42 per barrel, while gold rose $26 to $2075 per ounce.

Stocks finished higher on Thursday, recovering from midday losses, as investors weighed weekly employment data, mixed corporate earnings, and prospects for a new fiscal stimulus package. First-time claims for state unemployment benefits fell to 1.186 million, below the consensus of 1.415 million. While this was the lowest weekly reading since March, initial claims still topped 1 million for the 20th straight week. Continuing claims, reported with a one-week lag, fell to 16.107 million from 16.951 million a week earlier. The data came ahead of the government's July employment report on Friday morning. The Reuters consensus calls for the addition of 1.58 million payroll jobs, down sharply from 4.8 million in June, and a drop in the official unemployment rate to 10.5% from 11.1%. The Dow rose 0.68%, the S&P 0.64%, and the Nasdaq 1.00%. Crude oil fell slightly to $42 per barrel, while gold rose $26 to $2075 per ounce.