The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where labor and materials costs are lower. Yet the U.S. economy, even during the pandemic and the current period of high inflation, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as vaccines and AI) and services (such as Zoom calls) and moving into new markets, the domestic economy would not be growing, and capital would not be flooding into the country. The current high level of the U.S. dollar relative to currencies around the world attests to the confidence that global investors have in the durable and innovative U.S. economy.

Tuesday was another risk-off day. Losses for the small-, mid-, and mega-cap indices were between 0.6% to 1.4%. The 11 S&P 500 (SPX) sectors reflected the risk-off mood, with Consumer Staples (XLP +1.1%) the only sector to rise, while Utilities (XLU) and Real Estate (XLRE) booked tiny losses. The biggest losses were from Technology (XLK -1%), with Consumer Discretionary (XLY) and Energy (XLE) both off 0.9%. The market is probably in wait-and-see mode ahead of some monster quarterly reports this week.

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

As we move into the second half of January, the major indices are at, near, or closing in on all-time highs. Yet technical evidence continues to mount for some type of pullback or correction. We have talked recently about poor market breadth, but there are plenty of other and more-obscure indicators that also do not line up well for the bulls.

Artificial Intelligence: Investment Ideas in the Age of AI

Equities have sent confusing and contradictory signals throughout a back-and-forth 2023. Since setting year-highs at the end of July, the S&P 500 has mainly moved lower. During various attempted recovery spurts, the one thing that has been consistently lacking has been breadth. A handful of AI superhero stocks cannot carry the market, and narrow recovery tries are doomed to fail, in our view.

Innovation may be hard to define. But to borrow from former U.S. Supreme Court Justice Potter Stewart, you know it when you see it. The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where labor and materials costs are lower. Yet the U.S. economy, even during the pandemic and the current period of high inflation, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as vaccines) and services (such as Zoom calls) and moving into new markets and applications, the domestic economy would not be growing, and capital would not be flooding into the country. The current high level of the U.S. dollar relative to currencies around the world attests to the confidence that global investors have in the durable and innovative U.S. economy.

Several factors have conspired in recent weeks to send U.S. Treasury rates sharply higher. These include the Fed's program to reduce Treasury holdings by allowing them to mature; soaring fiscal deficits in Washington and a missing-in-action Congress; the downgrade of U.S. Treasury debt by Fitch Investor Services; and high-profile buys and sells by foreign owners of Treasury debt. Total Public Debt owed by the U.S. federal government was $32.3 trillion at the end of 2Q23. Outside the U.S., the two largest holders of U.S. Public Debt are Japan, which owns 3.5%, and China, which owns 2.5%. Other nations among the top 10 holders own 9.0% of the debt, so the top 10 holders collectively own about 15%. The grand total of U.S. debt owned by foreign holders is $7.7 trillion, or about 24% of the total. While the absolute holdings level is up about 3.0% over the past year, we have seen pronounced shifts among the major holders. Japan's bondholders historically have been long-term in nature, attracted to Treasuries while their local sovereign bond yields have been near zero for years. A recent rate hike in Japan, though, has led to the repatriation of approximately $80 billion out of Treasuries and into local sovereign securities in the past year. China has also been selling, in part for political reasons. China's current Treasury holdings are lower by about $135 billion over the past year. But while some nations have reduced exposure, others have increased it. Canada has increased its holdings by 17% and the U.K.'s holdings are up 8% in the past year. We think this type of global demand for U.S. Treasuries should help keep a lid on long-term rates in 2024.

Last week was another bad period for stocks and bonds and a very good week for gold, silver, and Bitcoin. Crude oil and the U.S Dollar Index were very calm. The S&P 500 (SPX) lost 2.4%, the Nasdaq gave up 3.2%, the Nasdaq 100 (QQQ) fell 2.9%, the S&P MidCap 400 (MDY) declined 2%, and the Russell 2000 (IWM) dropped 2.3%. Over the past 12 weeks, the SPX and Nasdaq have fallen in eight of those weeks, the QQQs in seven weeks, the MDY in nine weeks, and the IWM in 10 weeks. Over the past 13 weeks, the iShares 20+ Year Treasury (TLT) has been down in 11 of the weeks.

We?ve gone through hundreds of stock charts, and things remain ugly for the majority of issues on the NYSE and the S&P 500 (SPX). For the Nasdaq 100, a good number of stocks are in at least short-term downtrends, but the charts generally are in better condition than those for the NYSE and SPX.

As we said on Monday, this could be an important week for stocks -- and after one day, so far, so good. The S&P 500 (SPX), the Nasdaq, and the Nasdaq 100 (QQQ) all regained their 50-day averages. All three lost the 50-day in mid-August and again last week, so it is encouraging that these major indices are putting up a stand around the key average. At the same time, the three majors remain above their August lows and the pullback has turned into a sideways battle, with a lower high and a higher low in place.

Market breadth has deteriorated quickly, which is surprising after the recent strong advance. Every recent rally attempt has been stepped on by sellers. Seasonals are playing out and historically don't get better until October. Not much is working, as stocks, bonds, commodities, and crypto are being dumped.

Dimming Optimism on Possible Rate Cuts

The stock market sometimes gives a warning after a large move higher, gets everyone believing that a pullback has finally arrived, and then regroups for a couple of days before the rug is pulled out yet again. On July 27, we saw a pretty ugly reversal in the major indices that looked like the start of a much-anticipated reset. That was not to be, however, with stocks broadly higher on July 28.

Friday was quite a day for the stock market. Before the opening bell, a slew of large Financial sector companies reported better-than-expected results and were all seeing nice premarket gains. That helped stock futures rise, leading to decent gains for the major indices until about 10:15 a.m. But most of the gains in the Financial stocks fizzled quickly, with many eventually ending lower for the sessions and far off their early-day levels.

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.

This was one of our 10 Investment Themes for 2023 and remains relevant, as the S&P 500 is up 13% year-to-date. The long-term trend in the U.S. stock market has been higher; since 1980, stocks have turned in a positive performance almost 80% of the time. The average annual gain has been 13%. That was not so in 2022. Yes, the S&P 500 set an all-time record. But it peaked on January 3 and the rest of the year was downhill. The stock market entered a bear market in June 2022. Bond returns weren't much better, as spiking inflation pushed long-term interest rates higher and the Fed raised short-term rates to try to bring inflation down. The turmoil posed a challenge for Wall Street firms, as investment returns were dismal, the IPO market dried up, and M&A activity disappeared. By year-end, Wall Street firms such as Goldman Sachs and Morgan Stanley were announcing layoffs. We are more optimistic for the financial markets in 2023. Equity valuations are lower in the wake of the selloff in 2022. There is pent-up demand for IPOs and M&A once the environment improves. Finally, consensus expectations call for weak earnings and investment returns in 2023, setting markets up for a positive surprise. As the outlook improves, we think that investor demand will pick up for investment banks, exchange operators, and money-management firms. We recently raised our sector rating on Financial Services to Over-Weight. Stocks in our coverage universe that we believe are positioned to benefit include the following.

Stocks rose on Wednesday morning as investors awaited new developments in the debt ceiling negotiations in Washington. Housing market data was mixed, with growth in both single- and multi-family housing starts, but a decline in total building permits. Overall housing starts rose 2.2% to an annualized 1.401 million units, slightly above the Reuters consensus forecast. The Dow rose 0.4%, the S&P 0.4%, and the Nasdaq 0.6%. Crude oil traded near $72 per barrel, while gold fell $7 to $1986 per ounce.

Small- and mid-cap stocks (SMID) have underperformed large-caps over the past 12 months, but may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine, high European inflation or other geopolitical developments. As well, the prices of SMID stocks generally are lower than the prices of large-caps. SMID stocks can be risky, but diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 12%-15% of the U.S. stock market's capitalization is comprised of SMID stocks. For our purposes, we use a threshold of $15 billion to define a SMID stock.

We think the big move higher in longer-duration U.S. Treasury yields has already occurred this cycle, and yields may drift only modestly higher in 2023. That's in part due to substantial foreign ownership of U.S. Treasuries. Total U.S. Public Debt owed by the federal government was $30.9 trillion at the end of 3Q22. Outside of U.S. investors, the two largest holders of U.S. Public Debt are the nations of Japan, which owns 3.5% of the debt, and China, which owns 2.8%. The other nations among the top 10 holders own 7.6% of the debt, so the top 10 holders collectively own 13.9%. The grand total of U.S. debt owned by foreign holders is $7.3 trillion, or about 24%. While the absolute holdings number is down about 5.5% over the past year, we suspect these holders in the intermediate term are unlikely to dump their holdings aggressively. Japan's holders historically have been long-term in nature, while their local sovereign bond yields are almost zero and are not particularly enticing. China has little reason to sell a large portion of its holdings: the increase in supply would merely depress the price of the balance of its holdings, and may even weaken the dollar, setting off trade repercussions as the country works on recovering from its zero-Covid policy. Indeed, when some nations do sharply lower their holdings (Ireland has sold off 30% of its stake in U.S. Treasuries over the past year), others have stepped in to buy, such as Belgium, which has increased its holdings by 30%. We think this type of global demand for U.S. Treasuries should help keep a lid on long-term rates in 2023.

Stocks fell on Wednesday morning following more 4Q earnings reports and new retail sales data. The Commerce Department reported that U.S. retail sales rose 3.0% from the prior month in January, up from a 1.1% decline in December and above the Bloomberg consensus forecast of 2.0% growth. The results pointed to strength in the consumer economy, but also raised prospects for continued aggressive Fed rate hikes. The Dow fell 0.5%, the S&P 0.5%, and the Nasdaq 0.3%. Crude oil fell more than 1% to $78 per barrel, while gold fell $22 to $1843 per ounce.

The long-term trend in the U.S. stock market has been higher. Since 1980, stocks have turned in positive performances almost 80% of the time. The average annual gain has been 13%. That was not the case in 2022. Sure, the S&P 500 set an all-time record. But it peaked on January 3, and the rest of the year was downhill. The stock market technically entered a bear market in June. Bond returns weren't much better, as spiking inflation pushed long-term interest rates higher and the Federal Reserve raised short-term rates to try to bring inflation under control. The turmoil in the marketplace posed a challenge for Wall Street firms, as investment returns were dismal, the IPO market dried up, and M&A activity disappeared. By year-end, Wall Street firms such as Goldman Sachs and Morgan Stanley were announcing layoffs. Looking ahead, we are more optimistic for stocks in 2023. For one thing, equity valuations are lower in the wake of the sharp sell-off in 2022. For another, there is pent-up demand for IPOs and M&A, once the environment improves. Finally, consensus expectations call for weak 2023 earnings and investment returns, setting the markets up for a positive surprise. As the outlook for financial firms improves, we think investor demand will pick-up for investment banks, exchanges, and money management firms. Stocks in our Universe of Coverage that are in position to benefit include the following.

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.

We think the big move higher in longer-duration U.S. Treasury yields has already occurred this cycle, and yields may drift only modestly higher in 2023. In part, that is due to substantial foreign ownership of U.S. Treasuries. Total public debt owed by the U.S. federal government was $30.6 trillion at the end of 2Q22. Outside of U.S. investors, the two largest holders of U.S. public debt are the nations of Japan, which owns 3.7% of the debt, and China, which owns 3.1%. The other nations among the Top 10 holders own 7.7% of the debt -- so the Top 10 holders collectively own 14.5%. The grand total of U.S. debt owned by foreign holders is $7.3 trillion, or about 24%. While the absolute holdings number is down about 6% year-to-date, we suspect these holders are unlikely to dump their holdings into the bond markets in the intermediate term. Historically, Japan's holders have been long-term in nature, and their local sovereign bond yields are almost zero and are not particularly enticing. China has little reason to sell a large portion of its holdings: the increase in supply would merely depress the price of the balance of its holdings -- and may even weaken the dollar, setting off trade repercussions. Indeed, when some nations sharply lower their holdings (Hong Kong has sold off 20% of its stake in U.S. Treasuries this year), others have stepped in to buy (such as Belgium, which has increased its holdings by 20%). We think this foreign demand for U.S. Treasuries should help keep a lid on long-term rates in 2023.

The major blue-chip indices (SPX, OEX, NYSE, INDU) as well as the S&P 400 MidCap (MDY) and the small-cap Russell 2000 (IWM) all remain in nice bullish channels off their respective October lows. The Nasdaq as well as the Nasdaq 100 (QQQ) have traced out higher highs and higher lows, but continue to have a difficult time generating a lot of upside.

Small- and mid-cap stocks (SMID stocks) have underperformed large-caps over the past 12 months, but still may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine. As well, the prices of SMID stocks generally are lower than the prices of large-caps. SMID stocks can be risky -- and large-caps outperformed SMID stocks in 11 of the 19 years in our test period. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 12%-15% of the U.S. stock market's capitalization is comprised of SMID stocks. For our purposes, we use a threshold of $20 billion to define a SMID stock.

The Bull Battles Back: Our Monthly Survey of the Economy, Interest Rates, and Markets

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.

Stocks continue to struggle in 2022, but corporate insiders have reacted with increasing optimism in recent weeks as stocks have found new lows. Indeed, given the strength of current insider-sentiment readings from Vickers Stock Research, it seems clear that insiders are viewing the current dip as an opportunity.

Small- and mid-cap stocks (SMID stocks) have underperformed large-caps over the past 12 months, but still may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine. As well, the prices of SMID stocks generally are lower than the prices of large-caps. That said, SMID stocks can be risky and large-caps outperformed SMID stocks in 11 of the 19 years in our test period. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 12%-15% of the U.S. stock market's capitalization is comprised of SMID stocks. For our purposes, we use a threshold of $20 billion to define a SMID stock.

Stocks fell on Thursday morning, but pared sharper early losses, as investors continued to watch the unfolding crisis in Ukraine. Russia launched a large-scale military attack on the country early Thursday morning, with shelling of the Ukrainian capital and other major cities. The attack ended weeks of diplomatic efforts to end the standoff. The U.S. and other Western countries are expected to announce additional sanctions on Russia later today. The Dow fell 1.8%, the S&P fell 0.9%, and the Nasdaq was flat. Crude oil jumped more than 6% to $98 per barrel, while gold rose $28 to $1939 per ounce.

We are lowering our intermediate-term technical outlook to bearish from bullish. The major indices continue to cut through important support levels. The condition of most individual stock charts is ugly, with many losing their 50-day averages and then cratering through their 200-day averages. This is definitely a change of character: absent the pandemic, it is something we have not seen since September 2018 (and 2015 and 2016 for some of the higher-beta indices). We have not had a decent-sized correction since the pandemic swoon, so we are certainly overdue.

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.

After an intraday peak on October 25 at $85.41, WTI plunged to $62.43 by December 2. That was a 27% wipeout using intraday data. The entire rally off the August lows was obliterated in less than a month. However, WTI has traced out an ABC reversal and is quickly regaining its 200-day average.

We had been looking for a pullback in crude oil (WTI) since the latter part of October, and while it took some time, the oil market has been taken out to the woodshed since last Friday. After peaking on an intraday basis on October 25 just above $85/barrel, WTI has plunged to a recent low of $64.40. That represents a 25% wipeout, and the rally off the lows since August has almost completely disappeared.

As major stock indices trade near all-time highs and the VIX volatility index rests near its lowest level since the start of the pandemic, the volume of insider transactions has risen to the highest level since early September. The snap-back in volume is not surprising given pent-up demand from the recent earnings hiatus. Furthermore, after a year of impressive returns for the stock market, executives, directors, and beneficial owners may be engaging in year-end tax planning as capital-gains issues loom large these days.

Small- and mid-cap stocks (SMID stocks) soared in 2019. They have underperformed large-caps over the past 12 months, but still may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be poised to rebound more quickly once COVID-19 vaccines are more widely distributed and the domestic service economy recovers. As well, the prices of SMID stocks generally are lower than the prices of large-caps. That said, SMID stocks can be risky. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. Investors used to use a $2 billion market-cap threshold to define a small-cap stock and a $10 billion threshold for a mid-cap. The Russell 2000 index now includes numerous companies with market capitalizations above $15 billion. For our purposes, we use a threshold of $20 billion to define a SMID stock.

Stocks kept momentum going in July and August. Our analysts have been progressing through earnings season and have come across many stocks that have approached target prices. We set targets through our valuation framework, which includes analysis of historical multiples, peer multiples, and future dividends and cash flows. After adjusting for the latest information, here are some of the stocks on which we raised target prices over the past month. All of the following stocks are rated BUY at Argus.

July ended with a bout of selling, but bulls considered it overdue profit-taking after another successful month. Even with Friday's washout, the S&P 500 rose 2.3% in July. That marked six straight months of appreciation for the blue chip index (only January has been negative in 2021) and was the best market month since April.

Last week in this space, we detailed stubbornly negative, but grudgingly improving, insider sentiment. The easy path this week would be to say that conditions are little changed. And in the big picture, that is true. But there are some interesting highlights in the insider-transaction data from Vickers Stock Research this week.

Earnings Help Support a Stretched Market

Small- and mid-cap stocks (SMID stocks) surged in the past quarter. They also have outperformed large-caps over the past 12 months and may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be poised to rebound more quickly once COVID-19 vaccines are widely distributed and the economy recovers. As well, the prices of SMID stocks are generally lower than the prices of large-caps. While SMID stocks can be risky, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 20%-25% of the U.S. stock market's capitalization is comprised of SMID stocks. Investors used to use a $2 billion market-cap threshold to define a small-cap stock and a $10 billion threshold for a mid-cap. We note that the Russell 2000 index now includes numerous companies with market capitalizations above $15 billion. For our purposes, we use a threshold of $20 billion to define a SMID stock.

Small- and mid-cap stocks (SMID stocks) surged in the past quarter. They also have outperformed large-caps over the past 12 months and may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be poised to rebound more quickly once COVID-19 vaccines are widely distributed and the economy recovers. As well, the prices of SMID stocks are generally lower than the prices of large-caps. While SMID stocks can be risky, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 20%-25% of the U.S. stock market's capitalization is comprised of SMID stocks. Investors used to use a $2 billion market-cap threshold to define a small-cap stock and a $10 billion threshold for a mid-cap. We note that the Russell 2000 index now includes numerous companies with market capitalizations above $15 billion. For our purposes, we use a threshold of $20 billion to define a SMID stock.

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 Clorox Co. (CLX); Zoetis Inc (ZTS); Square Inc (SQ); Williams-Sonoma, Inc. (WSM) and the Focus List deletions are CBOE Global Markets Inc. (CBOE); D.R. Horton Inc. (DHI); Incyte Corp. (INCY); Pepsico Inc. (PEP).

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 Clorox Co. (CLX); Zoetis Inc (ZTS); Square Inc (SQ); Williams-Sonoma, Inc. (WSM) and the Focus List deletions are CBOE Global Markets Inc. (CBOE); D.R. Horton Inc. (DHI); Incyte Corp. (INCY); Pepsico Inc. (PEP).

Stocks rose strongly on Tuesday morning as American voters went to the polls and waited anxiously for the first returns this evening. Despite substantial uncertainty about the counting of mail-in ballots, tightening polls in several swing states, and control of the Senate, the rally suggested that investors were betting on a clear victory for Joe Biden and Senate Democrats, and on the economic boost that would come from a strong fiscal stimulus package. The Dow rose 2.5%, the S&P 2.3%, and the Nasdaq 2.1%. Crude oil traded near $38 per barrel, while gold rose $15 to $1908 per ounce.

Much of the weekly data from Vickers Stock Research suggests that things are pretty much as expected in the world of insider transactions. Earnings season is still underway and the volume of insider transactions is therefore low. As well, most of Vickers' insider indexes and insider sell/buy ratios are either neutral or slightly bearish. That makes sense as insiders jumped in when stock prices cratered on COVID-19 fears, and those same insiders have pulled back as stocks have rebounded. So is there anything of note in current insider activity? Why yes there is.

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 Director of Research Kelleher typically adds three or four new stocks per month. Performance information on the Focus List picks is available in our bi-annual Argus Performance Review. Below are the latest additions, all of which are rated BUY.

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 Director of Research Kelleher typically adds three or four new stocks per month. Performance information on the Focus List picks is available in our bi-annual Argus Performance Review. Below are the latest additions, all of which are rated BUY.

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 Old Dominion Freight Line, Inc (ODFL); D.R. Horton Inc. (DHI); CBOE Global Markets Inc. (CBOE); Vertex Pharmaceuticals, Inc. (VRTX) and the Focus List deletions are Apollo Global Management Inc (APO); Centerpoint Energy Inc. (CNP); Lowe`s Cos., Inc. (LOW); Norfolk Southern Corp. (NSC).

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 Old Dominion Freight Line, Inc (ODFL); D.R. Horton Inc. (DHI); CBOE Global Markets Inc. (CBOE); Vertex Pharmaceuticals, Inc. (VRTX) and the Focus List deletions are Apollo Global Management Inc (APO); Centerpoint Energy Inc. (CNP); Lowe`s Cos., Inc. (LOW); Norfolk Southern Corp. (NSC).

Large-caps have outperformed over the past 12 months, but small- and mid-caps may be in a better position to generate market-beating returns going forward. For one thing, many smaller companies often are more focused on domestic operations and may not be exposed to the global economic uncertainty caused by the coronavirus. For another, prior to COVID-19, the long-term record favored small-caps over large-caps. From 2003-2019, the Russell 2000 Index had climbed 282%, compared to an advance of 233% for the Russell 1000 Index. In 2020, a relatively weak performance by the Russell 2000 Index has brought the measures more in line for the year-to-date. SP despite risks associated with smaller-cap stocks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 15%-20% of the U.S. stock market's capitalization is comprised of small- and mid-cap stocks.

Large-caps have outperformed over the past 12 months, but small- and mid-caps may be in a better position to generate market-beating returns going forward. For one thing, many smaller companies often are more focused on domestic operations and may not be exposed to the global economic uncertainty caused by the coronavirus. For another, prior to COVID-19, the long-term record favored small-caps over large-caps. From 2003-2019, the Russell 2000 Index had climbed 282%, compared to an advance of 233% for the Russell 1000 Index. In 2020, a relatively weak performance by the Russell 2000 Index has brought the measures more in line for the year-to-date. SP despite risks associated with smaller-cap stocks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 15%-20% of the U.S. stock market's capitalization is comprised of small- and mid-cap stocks.

Large-caps have outperformed over the past 12 months, but small- and mid-caps may be in a better position to generate market-beating returns going forward. For one thing, most smaller companies often are more focused on domestic operations and may not be exposed to the global economic uncertainty caused by the coronavirus. For another, prior to COVID-19, the long-term record had favored small-caps over large-caps. From 2003-2019, the Russell 2000 Index had climbed 282%, compared to an advance of 233% for the Russell 1000 Index. In 2020, a relatively weak performance by the Russell 2000 Index has brought the measures more in line for the year-to-date. This week's list includes stocks with market caps below $12 billion; that are on the Argus BUY list; and are included in our Mid-Cap model portfolio.

Large-caps have outperformed over the past 12 months, but small- and mid-caps may be in a better position to generate market-beating returns going forward. For one thing, most smaller companies often are more focused on domestic operations and may not be exposed to the global economic uncertainty caused by the coronavirus. For another, prior to COVID-19, the long-term record had favored small-caps over large-caps. From 2003-2019, the Russell 2000 Index had climbed 282%, compared to an advance of 233% for the Russell 1000 Index. In 2020, a relatively weak performance by the Russell 2000 Index has brought the measures more in line for the year-to-date. This week's list includes stocks with market caps below $12 billion; that are on the Argus BUY list; and are included in our Mid-Cap model portfolio.

April was almost -- but not quite -- in the books when the hopeful sentiment that lifted stocks began to fade. Now, May lies ahead and many-times burned investors are wondering, again, if they should sell in May and go away.

April was almost -- but not quite -- in the books when the hopeful sentiment that lifted stocks began to fade. Now, May lies ahead and many-times burned investors are wondering, again, if they should sell in May and go away.

Whether it's crude oil, heating oil, gasoline, or natural gas, there is a big sale going on in the energy aisle. This is great for consumers, especially those that drive a lot or heat their homes with oil or natural gas. But while good for those that consume, it is not so good for those that produce. We won't speculate here if low prices are a net positive or negative for our economy, but it would make an interesting study.

Whether it's crude oil, heating oil, gasoline, or natural gas, there is a big sale going on in the energy aisle. This is great for consumers, especially those that drive a lot or heat their homes with oil or natural gas. But while good for those that consume, it is not so good for those that produce. We won't speculate here if low prices are a net positive or negative for our economy, but it would make an interesting study.

Stocks rose on Tuesday morning as investors weighed congressional testimony from Fed Chair Jerome Powell, who emphasized the continued strength of the U.S. economy while also noting the risks posed by the coronavirus. T-Mobile shares rose 10% after a federal judge approved the company's merger with Sprint, while Under Armour fell more than 16% after issuing disappointing guidance. The Dow rose 0.1%, the S&P 0.5%, and the Nasdaq 0.8%. Crude oil traded near $50 per barrel, while gold fell $12 to $1568 per ounce.

Stocks rose on Tuesday morning as investors weighed congressional testimony from Fed Chair Jerome Powell, who emphasized the continued strength of the U.S. economy while also noting the risks posed by the coronavirus. T-Mobile shares rose 10% after a federal judge approved the company's merger with Sprint, while Under Armour fell more than 16% after issuing disappointing guidance. The Dow rose 0.1%, the S&P 0.5%, and the Nasdaq 0.8%. Crude oil traded near $50 per barrel, while gold fell $12 to $1568 per ounce.

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 Director of Research Kelleher typically adds three or four new stocks per month. Performance information on the Focus List picks is available in our bi-annual Argus Performance Review. Below are the latest additions, all of which are rated BUY.

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 Old Dominion Freight Line, Inc (ODFL); D.R. Horton Inc. (DHI); CBOE Global Markets Inc. (CBOE); Vertex Pharmaceuticals, Inc. (VRTX) and the Focus List deletions are Apollo Global Management Inc (APO); Centerpoint Energy Inc. (CNP); Lowe`s Cos., Inc. (LOW); Norfolk Southern Corp. (NSC).

April was almost -- but not quite -- in the books when the hopeful sentiment that lifted stocks began to fade. Now, May lies ahead and many-times burned investors are wondering, again, if they should sell in May and go away.

Large-caps have outperformed over the past 12 months, but small- and mid-caps may be in a better position to generate market-beating returns going forward. For one thing, most smaller companies often are more focused on domestic operations and may not be exposed to the global economic uncertainty caused by the coronavirus. For another, prior to COVID-19, the long-term record had favored small-caps over large-caps. From 2003-2019, the Russell 2000 Index had climbed 282%, compared to an advance of 233% for the Russell 1000 Index. In 2020, a relatively weak performance by the Russell 2000 Index has brought the measures more in line for the year-to-date. This week's list includes stocks with market caps below $12 billion; that are on the Argus BUY list; and are included in our Mid-Cap model portfolio.

Large-caps have outperformed over the past 12 months, but small- and mid-caps may be in a better position to generate market-beating returns going forward. For one thing, many smaller companies often are more focused on domestic operations and may not be exposed to the global economic uncertainty caused by the coronavirus. For another, prior to COVID-19, the long-term record favored small-caps over large-caps. From 2003-2019, the Russell 2000 Index had climbed 282%, compared to an advance of 233% for the Russell 1000 Index. In 2020, a relatively weak performance by the Russell 2000 Index has brought the measures more in line for the year-to-date. SP despite risks associated with smaller-cap stocks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 15%-20% of the U.S. stock market's capitalization is comprised of small- and mid-cap stocks.

Whether it's crude oil, heating oil, gasoline, or natural gas, there is a big sale going on in the energy aisle. This is great for consumers, especially those that drive a lot or heat their homes with oil or natural gas. But while good for those that consume, it is not so good for those that produce. We won't speculate here if low prices are a net positive or negative for our economy, but it would make an interesting study.

Stocks rose on Tuesday morning as investors weighed congressional testimony from Fed Chair Jerome Powell, who emphasized the continued strength of the U.S. economy while also noting the risks posed by the coronavirus. T-Mobile shares rose 10% after a federal judge approved the company's merger with Sprint, while Under Armour fell more than 16% after issuing disappointing guidance. The Dow rose 0.1%, the S&P 0.5%, and the Nasdaq 0.8%. Crude oil traded near $50 per barrel, while gold fell $12 to $1568 per ounce.

The major indices are up at midday on Monday amid continued optimism about a U.S.-China trade deal. Industries doing well today include Energy Equipment & Services, Industrial Conglomerates, and Air Freight & Logistics. Industries showing weakness include Household Products, Household Durables, and Professional Services. The VIX is up 0.70 to 13.00 after the previous close of 12.30. The Dow rose 0.5%, the S&P 0.4%, and the Nasdaq 0.5%. Crude oil rose 2% to $57 per barrel, while gold fell $3 to trade near $1509 per ounce.

The major indices are up at midday on Monday amid continued optimism about a U.S.-China trade deal. Industries doing well today include Energy Equipment & Services, Industrial Conglomerates, and Air Freight & Logistics. Industries showing weakness include Household Products, Household Durables, and Professional Services. The VIX is up 0.70 to 13.00 after the previous close of 12.30. The Dow rose 0.5%, the S&P 0.4%, and the Nasdaq 0.5%. Crude oil rose 2% to $57 per barrel, while gold fell $3 to trade near $1509 per ounce.

The major indices are up at midday on Monday amid continued optimism about a U.S.-China trade deal. Industries doing well today include Energy Equipment & Services, Industrial Conglomerates, and Air Freight & Logistics. Industries showing weakness include Household Products, Household Durables, and Professional Services. The VIX is up 0.70 to 13.00 after the previous close of 12.30. The Dow rose 0.5%, the S&P 0.4%, and the Nasdaq 0.5%. Crude oil rose 2% to $57 per barrel, while gold fell $3 to trade near $1509 per ounce.

Argus Asset Allocation Recommendations and Guidelines

Argus Asset Allocation Recommendations and Guidelines