U.S. markets rallied on Thursday morning on stellar Nvidia results. On the housing front, existing home sales rose 3.1% to an annual rate of 4 million, this up from 3.8 million in December. The median home sales price was $379,100, 5.1% higher than a year ago, but down from $381,400 in December. As for economic trends, S&P Global's flash readings for February's PMI show expansion in both services and manufacturing. Services activity slowed to 51.3, down from 52.5 in January, but remained in expansion territory. Manufacturing PMI expanded more quickly in February with a reading of 51.7, up from 50.7 in January. The tech heavy Nasdaq rose 2.6%, the S&P 500 was up $1.8% and the Dow gained 0.8%

Global stocks are picking up the pace. While the S&P 500 has jumped almost 11% in the past month, the EAFA index of large- and mid-cap stocks based in countries other than the U.S. and Canada has risen 10%. Over the past six years, the performance gap has been wider, with the S&P 500 advancing 12% compared to a 7% gain for the EAFE. But the underperformance has given global stocks a valuation advantage, particularly in the area of dividends. The EAFE dividend yield of 2.4% is 80 basis points higher than the comparable S&P 500 dividend yield. We think global dividend stocks now offer opportunity, particularly given the endless speculation over the direction of interest rates in the U.S., which has created market-timing headaches for equity income investors. Those investors have endured recent wide swings in prices for rate-sensitive equity sectors such as Utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this asset class for U.S. investors, including a wide selection of companies that pay dividends, robust industry diversification, and, as we have mentioned, higher yields and lower valuations. Argus has recently boosted its global coverage, and recommends the following international dividend stocks, each of which has at least a long-term HOLD rating from an Argus analyst.

The stock market continues to fly higher and seems to be in one of those phases when investors wait for a pullback that never comes -- or happens at prices that are much higher than they are 'today.' It's a 'the stock market that won't let me in' scenario, as every pause is short before a next run to the upside. We call these 'lockout rallies.' If you were loaded with stocks at the recent bottom, you're loving it. If you weren't, it's excruciating.

Stocks fell on Friday morning, extending Thursday's sharp selloff, as investors weighed hawkish comments from Fed Chair Powell in Jackson Hole. Mr. Powell said that the Fed would 'hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective,' and that the central bank was 'prepared to raise rates further if appropriate.' Mr. Powell also reiterated that the Fed would maintain its 2% inflation target. The Dow fell 0.1%, the S&P 0.2%, and the Nasdaq 0.3%. Crude oil rose 1% to $80 per barrel, while gold fell $11 to $1936 per ounce.

We knew this moment was coming -- and, right on cue, higher prices have put a charge into market sentiment. Indeed, many investors now have jumped to the bullish side of the fence. It's amazing what price can do to sentiment. When market pessimism is very bad, the only way prices can move higher is if sentiment improves or gets less bearish. So, for now, sentiment is bullish for the stock market. Many of the sentiment indicators cycled into their most-fearful levels between late September and December of last year. The S&P 500 bottomed in October, while the Nasdaq 100 bottomed in early November but almost broke that low in late December.

Stocks were mostly higher on Thursday, though sector performance was mixed. Tech stocks soared, driven by the rally in Nvidia, and Communication Services, Industrials, and Real Estate rose modestly. However, these gains were tempered by declines in other sectors. Investors weighed reports of a possible debt ceiling agreement, along with new GDP and employment data. The Commerce Department, in its second estimate, said that the U.S. economy expanded at a 1.3% annualized rate in 1Q, up from its initial estimate of 1.1%, though down from 2.6% in 4Q. On the employment front, first-time claims for state unemployment benefits rose by 4,000 to a seasonally adjusted 229,000 for the week ended May 20, below the consensus forecast of 245,000. The Dow fell 0.11%, the S&P rose 0.88%, and the Nasdaq rose 1.71%. Crude oil traded near $72 per barrel, while gold fell to $1941 per ounce.

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 Alcon Inc. (ALC); Ulta Beauty Inc (ULTA); Comcast Corp (CMCSA); ProLogis (PLD) and the Focus List deletions are AstraZeneca PLC (AZN); Omnicom Group, Inc. (OMC); Target Corp (TGT); Equinix Inc (EQIX).

Some of the strangest market-cap scenarios going back to 2018 come from the small-cap Russell 2000 (IWM) and the S&P 600 (SML) charts. Their performances have tracked each other since 2001. Data for the SML started at the end of 1994, while the IWM data started in May 2000.

Our list this week identifies companies that received an Argus target-price increase in April. As the stock prices of these companies approached their target prices, Argus analysts saw those prices going even higher. We are in the thick of earnings season and our analysts are scouring quarterly reports to evaluate how the companies they follow are doing. With economists busy analyzing economic data to determine whether the economy might slip into recession, companies have been attending to their businesses. Some are weathering current economic conditions better than others. The economic pressures are real - including rising interest rates, inflation, the strong dollar, and wavering consumer spending patterns. These stressors are on top of normal competitive pressures, as companies fight to sell their products and services, outmaneuver peers, and make profits. Looking back at April, our analysts found companies where the business outlook is solid - and went through the mechanics of our valuation framework to adjust target prices upwards. Our framework includes analysis of historical multiples, peer multiples, and future dividends and cash flows. Here are the stocks on which we raised target prices in April. All are rated BUY at Argus.

First-Quarter 2023 Market Performance & Overview

After most stocks bottomed in September and October of 2022, the dispersion among sectors and industry groups has been dramatic. This is typical when a market has no direction; when market participants are confused; when there is an uncertain global economy; when there is massive confusion about where market and government rates are going; when OPEC is making waves; and when there is a war in full swing. If anything is (somewhat) hot, investors jump on the bandwagon quickly and jump away even quicker from industries and sectors that are heading lower.

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.

Global stocks are on a run. While the S&P 500 has jumped almost 8% year-to-date, The EAFA Index of large- and mid-cap stocks based in countries other than the U.S. and Canada has risen 9%. Over the past six months, foreign stocks also have outperformed, climbing 11% versus a 1% decline by the U.S. market. The story is different over the past five years, as the S&P 500 has risen 50% and global stocks have fallen 1%. Even so, the long outperformance has given global stocks a valuation advantage, particularly in the area of dividends. The EAFE dividend yield of 2.7% is 100 basis points higher than the comparable S&P 500 dividend yield. We think global dividend stocks now offer opportunity, particularly given the endless speculation over the direction of interest rates in the U.S., which has created market-timing headaches for equity income investors - who have endured recent wide swings in prices for rate-sensitive equity sectors such as utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S. interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this asset class for U.S. investors, including a wide selection, robust industry diversification, and, as we have mentioned, higher yields and lower valuations. Argus recently boosted its global coverage, and recommends the following international dividend stocks, each of which has at least a long-term BUY rating from an Argus analyst. This list of approximately 25 companies offers exposure to eight of the 11 major industrial sectors. The list includes companies from 10 countries.

Monday Tee Up: Inflation and Earnings

The U.S. housing market has been an important contributor to the U.S. economic recovery from the pandemic, but high prices and high interest rates have cooled the market. The National Association of Realtors recently reported that existing home sales in July 2022 totaled 4.8 million at a seasonally adjusted annual rate, down 27% from the beginning of the year. The Commerce Department reported that new one-family homes were selling at a 511,000/year rate in July -- down from 831,000 in January. Meanwhile, a leading indicator for the industry, housing permits, has turned lower as well. According to the Census Bureau, permits were being authorized in July at a 1.7 million annual rate, down from 1.9 million in March. Housing prices remain hot. The S&P/Case-Shiller National Home Price Index for June 2022 showed that the average home price rose 18% year-over-year. The high prices have boosted housing inventories. Currently there is a 10.9-month supply of existing homes for sale (the typical range is 4.5-7.5 months). Until pricing pressures start to ease, the housing sector will not be supportive of U.S. economic growth.

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.

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 AstraZeneca PLC (AZN); Restaurant Brands Intl In (QSR); Hormel Foods Corp. (HRL); Huntington Bancshares, Inc. (HBAN) and the Focus List deletions are Apollo Global Management Inc (APO); Vertex Pharmaceuticals, Inc. (VRTX); Procter & Gamble Co. (PG); Marriott International, Inc. (MAR).

Monday Tee-Up: August Jobs and Powell's House of Pain

Dividends are supposed to lend stability to a portfolio. However, U.S.-based income investors have experienced a high degree of volatility in recent years, as the Federal Reserve since 2018 has embarked on two campaigns to raise interest rates, sandwiched around a desperate program that lowered the federal funds rate to zero in order to help the economy recover from the pandemic. The endless speculation over the direction of rates has created market-timing headaches for equity income investors. They have endured wide swings in prices for rate-sensitive equity sectors such as Utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this asset class for U.S. investors, including a wide selection, robust industry diversification, higher yields, and lower valuations. Argus has recently boosted its global coverage, and recommends the following international dividend stocks. Note this list of 25 companies offers exposure to eight of the 11 major sectors. The list includes companies from 10 countries.

Several weeks ago, we talked about small-caps and, so far, they have held key support. They have steadily underperformed the S&P 500 since February 2021 and the S&P MidCap 400 since January 2021. Both the Russell 2000 (IWM) and the S&P SmallCap 600 (SML) peaked in November 2021 and have been tracing out lower lows and lower highs ever since. As of the June 16 closing low, the IWM has cratered 32% while the SML has given up 26%. Interestingly, the hyper-revenue-growth/no-EPS stocks peaked in late 2020 and early 2021, well before the small-caps. The Nasdaq, QQQs and the S&P 500 all peaked in late 2021/early 2022.

Insider sentiment remains very bullish for yet another week, with corporate executives, directors and beneficial owners keeping their long-term faith even as the broader market continues to struggle against a wave of worrisome near-term events.

Stocks rose strongly for a second day on Thursday as investors continued to assess the Fed's rate hike plans. Home construction and employment data were better than expected. Residential housing starts rose 6.8% in February to an annualized 1.77 million. First-time claims for state unemployment benefits fell by 15,000 to 214,000 for the week ended March 12, below the Bloomberg consensus forecast of 220,000. The Dow rose 1.23%, the S&P 1.23%, and the Nasdaq 1.33%. Crude oil traded near $104 per barrel, while gold rose $33 to $1943 per ounce.

This edition features our annual pharmaceutical pipeline, a fresh look at Barry Callebaut's chocolate operation, the buzz around RingCentral, and SAP, Subsea 7, and Just Eat Takeaway.

Stocks fell on Tuesday morning amid continued uncertainty about the impact of the new Omicron variant, including its ability to evade vaccines and force a new round of lockdowns. Moderna CEO Bancel noted that she expects the current vaccine would be less effective against the Omicron variant. Fed Chair Powell, in remarks made before the Senate Banking Committee said that due to rising inflation, the central bank may speed up the pace of tapering. The Dow fell 1.3%, the S&P 1.2%, and the Nasdaq 1.3%. Crude oil fell 4% to $67 per barrel, while gold traded near $1781 per ounce.

Last week, stocks closed with a fresh set of all-time highs. Argus Director of Research Jim Kelleher, CFA, noted that 'saying 'all-time highs' has started to sound like a broken record.' Jim went on to detail why the relentless push higher is not necessarily a good thing. That disconnect matches current insider-trading data.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years as the endless speculation over the direction of rates has created market-timing headaches. Investors have endured wide swings in prices for rate-sensitive equity sectors such as utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this segment for U.S. investors.

The stock market rallied last week, as blue chips recouped losses that incurred during Fed commentary two weeks prior. Tech stocks performed well, but blue chips did better. During Friday's session, the Dow Jones Industrial Average increased 237 points, or 0.69%. The S&P 500 was up 0.33%, and the Nasdaq Composite was down 0.06%. For the week, the DJIA was up 1144 points, or 3.44%, the S&P 500 was up 2.74%, and the Nasdaq Composite was down 2.35%. Year-to-date, the DJIA is up 12.51%, the S&P 500 is up 13.97%, and the Nasdaq Composite is up 11.42%.

The stock market was calm last week; volatility was at its lowest levels in over a year. Tech stocks outperformed blue chips for the second week in a row. During Friday's session, the Dow Jones Industrial Average increased 297 points, or 0.89%. The S&P 500 was up 0.77%, and the Nasdaq Composite was up 0.51%. For the week, the DJIA was up 647 points, or 1.95%, the S&P 500 was up 2.71%, and the Nasdaq Composite was up 3.12%. Year-to-date, the DJIA is up 10.44%, the S&P 500 is up 9.92%, and the Nasdaq Composite is up 7.85%.

Our recent commentaries about insider sentiment, which have been based on proprietary sentiment measurements from Vickers Stock Research, have noted growing caution among corporate executives, directors and beneficial owners. We've discussed pent-up selling demand after earnings season, when insiders are broadly prohibited from trading; hedging in an environment that features a pandemic and extreme political developments in the U.S.; and insiders taking profits off the table (as they almost always do) when stock prices flirt with all-time highs.

As global markets have gyrated due to the spread of COVID-19 and the onset of a global recession, one thing has not changed: U.S. stocks are more expensive than global stocks on numerous valuation metrics. The P/E ratio on the S&P 500 is 25.9x, above the global average of 18.5x and well above the 16x average P/E for Latin America and China stocks. A review of price/sales ratios tells a similar story. The U.S. ratio is 2.3x, far higher than the global average of 1.25x, while Japan and Europe appear to be values at 1.1x or below. The current dividend yield for the S&P 500 is 1.7%, versus the global average of 2.2% and Europe's yield of 2.6%. One reason investors pay a higher price for North American securities is the transparency of the U.S. financial system. What's more, global returns can be volatile across individual countries, given currency, security and political risks; indeed, U.S. stocks have outperformed EAFE in 2020 (as well as over the past five years). Even so, we recommend that growth investors have approximately 15%-18% of their equity allocations in international stocks to take advantage of the value.