Monday Tee Up: Back to Inflation

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

Stocks fell on Monday morning as investors reassessed prospects for Fed rate cuts in 2024 and awaited the November employment report on Friday. On the M&A front, Hawaiian Holdings, the parent company of Hawaiian Airlines, soared on news of a buyout offer from Alaska Air Group. The Alaska offer of $18 per share represented a 270% premium to the HA closing price on Friday. Elsewhere, Spotify shares rose more than 8% after the music streaming service announced a new round of layoffs, while Uber rose nearly 5% after being added to the S&P 500 index. The Dow fell 0.4%, the S&P 0.7%, and the Nasdaq 1.1%. Crude oil fell nearly 1% to $73 per barrel while gold traded near $2043 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.

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 were mixed on Monday morning, as investors continued to focus on economic weakness in China, rising bond yields, rising energy prices and the Fed's next interest rate decisions. Fed Chair Powell will speak at Jackson Hole, Wyoming on Friday. His comments will be watched closely for signs the Fed may be at or near the end of its restrictive monetary policy. The Dow fell 0.6%, the S&P 500 was nearly flat, and the Nasdaq rose 0.4%. Crude oil rose slightly to $81 per barrel, while gold traded near $1917 per ounce.

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

On Thursday, the Nasdaq fell 2.1% and the Nasdaq 100 (NDX) gave up 2.3%, dragging the S&P 500 down 0.7%. Three of the largest sectors (which are 2023 winners by far) led the damage. Discretionary fell 3.4% due to TSLA's 9.7% decline; Tech dropped 2%, led by a 3.3% drop in semiconductors; and Communication Services lost 2% due to NFLX's 8% wipeout.

In this edition, the United Auto Workers are likely to hit the brakes; interest in green hydrogen is rising; oil prices are falling, and gas prices aren't, and Nike, Bayer, and Sanofi.

It's important to keep an eye on the intermarket relationship between stocks and commodities versus the U.S. Dollar Index (USD) and Treasury yields. The USD is not far from breaking out of a trading range that started back in November 2022, while the 5- and 10-year Treasury yields are close to breaking out of declining channels that have been in place since October 2022. Additionally, the 2-year yield (already at 4.87%) is quickly approaching 5% and its 5.05% recovery high from March 8.

Stocks were mostly lower on Tuesday morning following disappointing retail sales data. The Commerce Department said that U.S. retail sales rose 0.4% in April, up from a decline of 0.7% in March but below the Reuters consensus forecast of 0.8% growth. On the earnings front, Home Depot shares fell after the company reported a decline in 1Q sales and earnings and lowered its full-year guidance. The Dow fell 0.7%, the S&P fell 0.3%, and the Nasdaq rose 0.1%. Crude oil traded near $71 per barrel, while gold fell $16 to $2007 per ounce.

Don't look now, but King Dollar might be in the early stages of turning higher. For other markets, that means the wrecking ball is starting to swing. The U.S. Dollar Index (USD) peaked in September 2022 and then was slammed for more than four months. It then saw a counter-trend rally almost to its 200-day average by March 8, and then dropped again to a slightly lower close on April 13. Since a low in daily momentum in December, there have been two bullish divergences and the set-up for a potential double bottom.

Each week, the Commodity Futures Trading Commission (CFTC) releases information on the long and short positions of three groups of traders in several dozen futures markets. The report is known as the COT report. Commercial hedgers, also called the smart money, are very good at loading the boat before a downtrend is complete and cutting their positions drastically during the ensuing uptrend. Large speculators are mostly hedge funds that pile into a momentum trade, but generally stay too long at the party, and vice versa.

Stocks fell on Wednesday morning, a day after rallying following a speech from Fed Chair Jerome Powell. Mr. Powell said that the economy was in the 'very early stages of disinflation,' and that the process would take time, largely echoing his comments after the Fed's rate hike last week. On the earnings front, Uber shares rose after the ride-hailing service posted much better-than-expected fourth-quarter results. Yum! Brands also rose following strong 4Q sales and earnings. The Dow fell 0.6%, the S&P 1.0%, and the Nasdaq 1.5%. Crude oil rose 1% to $78 per barrel, while gold traded near $1888 per ounce.

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

Last week, we reported that the volume of insider transactions was ramping up with the end of earnings season upon us. This week brings a burst of transactions, with about 2300 insider transactions meeting the criteria for inclusion in the Weekly Insider Report from Vickers Stock Research.

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

As earnings season comes to an end, the weekly volume of Form 4s processed by Vickers Stock Research is almost back to normal. Indeed, almost 1900 insider transactions in the past week met the criteria for inclusion in Vickers current Weekly Insider report. Corporate insiders use the form to report their stock transactions to the SEC -- but during earnings season, those same insiders are broadly restricted from buying or selling stock.

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

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. This week, we look at Basic Materials. This is not a flashy sector, often overlooked because other sectors garner headlines where consumers are more familiar with brand names. That's partly why we like the sector (it's under-the-radar), but that's not enough. The companies we examine within the sector have to stand on their own, with solid fundamentals and growth outlooks. Challenges in the supply chain persist, but have eased. Inflation is high and the Fed is raising interest rates to quell higher prices. In this environment, we expect demand for commodities to remain robust and for pricing to remain strong. The sector currently accounts for 2.8% of the S&P 500, and includes industries such as chemicals, paper, metals, and mining. Over the past five years, the weighting has ranged from 2% to 4%. We think investors should Over-Weight the sector and allocate 3% of diversified portfolios to stocks in the sector. Basic Materials is slightly over-performing the S&P 500 thus far in 2022, with a loss of 18.7% compared to the S&P's loss of 20.6%. Here are some of our BUY-rated Basic Materials companies, which were selected using the Argus screening tool and requiring that the stocks be BUY-rated and with an Argus Financial Strength rating of at least Medium-High. We feel these companies currently are best in class for this sector. Some of these companies also are included in our Model Portfolios.

Reading the Tea Leaves on Consumers

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.

Stocks fell again on Friday morning amid continued concerns about surging inflation and the impact of Fed rate hikes. Consumer confidence data was weaker than expected. The University of Michigan's consumer sentiment index fell to 61.7 in the first half of February, down from 67.2 in January and below the Reuters consensus forecast of 67.5. The Dow was flat, the S&P fell 0.3%, and the Nasdaq fell 0.7%. Crude oil rose to more than $91 per barrel, while gold traded near $1835 per ounce.

The onset of the coronavirus in 2020 knocked stocks into a bear market. Though equities recovered, the U.S. economy is about to slow down and COVID-19 cases are rising again as virus variants spread. Volatility, which has dropped from the highs of 2020, still has not returned to pre-COVID levels. Daily prices can swing wildly, as they did three times in 2021 when stocks dropped 4%-5% in a matter of a few days. Is it time for investors to cash in their chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes, such as fixed income and cash. As well, those returns are from eras when the 10-year Treasury bond yield was not sub-2.0%. So what's a potential equity strategy for investors amid all the uncertainty? Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate. Academic literature and, more to the point, returns history indicate that Min Vol can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods.

Stocks were mixed on Thursday morning amid continued concerns about accelerating inflation. Disney shares fell more than 7% after the company posted disappointing fiscal 4Q earnings and much lower than expected growth in Disney+ subscriptions. The Dow fell 0.2%, the S&P rose 0.2%, and the Nasdaq rose 0.8%. Crude oil rose slightly to $81.50 per barrel, while gold traded near $1864 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.

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 the pandemic and upcoming changes to interest rates by the Federal Reserve, we look to innovative companies to navigate the challenges. At Argus, an 85-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. The following innovative, BUY-rated stocks were recently added to our Growth Model Portfolio, our new Innovative Growth Separately Managed Account and our Modern Innovators UIT. The full list of stocks can also be found in our Innovation Theme Model Portfolio.

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, 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 nearly $23 trillion at the end of 1H21. That's growth of 23-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. In addition, the value of listed corporations on U.S. stock exchanges at the end of 2020 was approximately $41 trillion, according to SIFMA, representing 38% of global equity market capitalization, while U.S. GDP represented only 26% of global GDP. The current low level of interest rates and the relatively high level of the dollar both attest to the confidence that global investors have in the innovative U.S. economy.

We recently raised our rating on the Basic Materials sector to Over-Weight. Despite challenges presented by the Delta variant and the tenacity of COVID-19, the global economy continues to reopen, spurring demand for goods and underscoring scarcity across the supply chain. In this environment, we look for demand for commodities to remain robust and pricing to remain strong. The sector accounts for 2.5% of the S&P 500, and includes industries such as chemicals, paper, metals and mining. Over the past five years, the weighting has ranged from 2% to 4%. We think investors should consider allocating 3% of their diversified portfolios to stocks in this sector. The sector is underperforming thus far in 2021, with a gain of 17.7%. It outperformed in 2020, with a gain of 18.1%, and underperformed in 2019, with a gain of 21.9%. Here is how we use our analysts' Materials sector ideas in our Focus List and 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.

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

Stocks fell on Thursday morning following new weekly employment data and a producer price report that again pointed to high inflation. The Labor Department said that first-time claims for state unemployment benefits fell to 375,000 for the week ended August 7, down from 387,000 a week earlier and in line with the consensus forecast. On the earnings front, eBay shares fell after the company posted mixed 2Q results and offered disappointing third-quarter sales guidance. The Dow fell 0.3%, the S&P 0.3%, and the Nasdaq 0.4%. Crude oil rose to $69 per barrel, while gold traded near $1749 per ounce.

Since the pandemic lows of April 2020, commodity prices generally have been rising -- until the past few weeks. Copper prices doubled from April 2020 to May 2021, but have since dipped 7%. Soybean rose almost 80% from pandemic lows, before also easing 7% in recent weeks. Oil prices only more recently have started to come back to earth, while gold prices have been slipping since August 2020, but have rebounded a bit as COVID fears reignited. Commodity investors are accustomed to volatility. Pre-pandemic, the last time the commodities market bottomed was in January 2016, when oil prices were below $30 per barrel and copper was below $4,500 per metric ton. Looking ahead, we think underlying long-term economic fundamentals are favorable for most commodities (except oil), but project ongoing volatility from the pandemic. A stable/falling dollar helps provide a fundamental foundation for the group. Yet with the virus still spreading, risks remain high and our sector recommendation to the Basic Materials group is Market-Weight. The current market weighting of the sector is 2.7%, and we think investors should consider exposure of 2%-3% in diversified portfolios. We recommend well-managed, financially strong industry leaders that are able to take market share during challenging periods for the chemical, metals, agricultural, and paper industries.

Since the pandemic lows of April 2020, commodity prices generally have been rising -- until the past few weeks. Copper prices doubled from April 2020 to May 2021, but have since dipped 7%. Soybean rose almost 80% from pandemic lows, before also easing 7% in recent weeks. Oil prices only more recently have started to come back to earth, while gold prices have been slipping since August 2020, but have rebounded a bit as COVID fears reignited. Commodity investors are accustomed to volatility. Pre-pandemic, the last time the commodities market bottomed was in January 2016, when oil prices were below $30 per barrel and copper was below $4,500 per metric ton. Looking ahead, we think underlying long-term economic fundamentals are favorable for most commodities (except oil), but project ongoing volatility from the pandemic. A stable/falling dollar helps provide a fundamental foundation for the group. Yet with the virus still spreading, risks remain high and our sector recommendation to the Basic Materials group is Market-Weight. The current market weighting of the sector is 2.7%, and we think investors should consider exposure of 2%-3% in diversified portfolios. We recommend well-managed, financially strong industry leaders that are able to take market share during challenging periods for the chemical, metals, agricultural, and paper industries.

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

The onset of the coronavirus in 2020 knocked the stock market into a bear market. Though stocks have recovered, the U.S. economy is about to slow down and COVID-19 cases are rising again as virus variants spread. Volatility, which has dropped from the highs of 2020, still has not returned to pre-COVID levels. Daily prices can swing wildly, as they did during two consecutive days in mid-July when the Dow Jones Industrial Average plummeted more than 1,000 points. Yet investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes. Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate and can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods.

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

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

Stocks rose on Wednesday morning, led by the Consumer Discretionary sector, as Fed officials again sought to ease concerns about inflation. On the M&A front, Amazon said that it would purchase the MGM movie studio for $8.45 billion. The acquisition will bolster its Amazon Prime video service and help it to compete with rival streaming services. The Dow rose 0.2%, the S&P 0.3%, and the Nasdaq 0.7%. Crude oil traded near $66 per barrel, while gold rose $5 to $1903 per ounce.

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

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

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

Stocks fluctuated on Thursday in choppy trading as investors weighed weekly employment data, a continued decline in new U.S. coronavirus cases, and a warning from President Biden about challenges from China. The Labor Department reported that both first-time and continuing unemployment claims fell from the prior week, though both readings were above consensus forecasts. After the close, Disney posted an unexpected fiscal 1Q profit amid strong growth in Disney+ subscribers. The Dow fell 0.02%, the S&P rose 0.17%, and the Nasdaq rose 0.38%. Crude oil fell more than 1% to $58 per barrel, while gold fell $17 to $1826 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.

The onset of the coronavirus earlier this year knocked the stock market into a bear market. Though stocks have recovered, the U.S. economy is still in recession and COVID-19 cases are spiking as the weather turns colder and people head indoors. Volatility, which was low in early 2020 after a robust year for equities in 2019, has spiked higher, and has remained elevated. Is it time to cash in the chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes such as fixed income and cash. As well, those returns are from eras when the 10-year Treasury bond yield was not sub-1.0%. So what's a potential equity strategy for investors amid all the uncertainty? Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate. Academic literature and, more to the point returns history, indicate that Min Vol can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods. Stocks included in our Min Vol model portfolio and typically industry leaders and have received a high score from our A6 Quant Model on Financial Strength and a low score on Risk. Stocks in the portfolio include the following.

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 strongly on Tuesday morning on continued coronavirus vaccine optimism and reduced post-election uncertainty, after the head of the General Services Administration approved the start of the formal transition to the Biden administration. The President-elect also continued to name new cabinet officers, including former Federal Reserve Chair Janet Yellen as Treasury Secretary. On the economic front, the Conference Board said that its consumer confidence index dropped to 96.1 in November, down from 101.4 in October and below the Reuters consensus forecast of 98. The Dow rose 1.7%, the S&P 1.6%, and the Nasdaq 1.0%. Crude oil traded near $45 per barrel, while gold fell $35 to $1803 per ounce.

The onset of the coronavirus knocked stocks into a bear market. Though stocks have recovered, the U.S. economy remains in recession and COVID-19 cases are spiking as the weather turns colder and people head indoors. Volatility, which was low in early 2020 after a robust year for equities in 2019, has spiked higher. Is it time to cash in the chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes such as fixed income and cash. As well, those returns are from eras when the 10-year Treasury bond yield was not sub-1.0%. So what's a potential equity strategy for investors amid all the uncertainty? Argus believes Min Vol is an all-weather strategy that is timely in any investing climate. Academic literature and, more to the point, historical performance indicate that Min Vol can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods. Argus has developed a sophisticated approach to Min Vol investing built around our proprietary quality & safety screens. We recently updated our Theme Model Portfolio Min-Vol report.

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.