Emergent Biosolutions, Inc. (EBS) stock forecast and price target

Monday Tee-Up: Housing and Earnings

Last week the stock market extended its losing streak to five weeks. On Friday, the Dow Jones Industrial Average fell by 230 points, or 0.69%. The S&P 500 fell 1.30%, and the Nasdaq Composite dropped 2.18%. For the week, the DJIA was down 671 points, or 1.99%, while the S&P 500 was off 2.88%, and the Nasdaq Composite declined 3.53%. Year-to-date, the Dow is down 9.43%; and the S&P 500 is off 11.79%. The Nasdaq Composite extended its relative underperformance and is now down 17.90% year-to-date.

Investors wrapped up a quiet final week in 2021 with a modest loss for the S&P 500. But that hardly dented a strong year for stocks, when the S&P 500 climbed almost 27%. The average stock in the Argus Universe of Coverage rose 24% during the quarter, and the median stock advanced 36%. The average BUY-rated stock increased 28%, while the average HOLD-rated stock gained 15%. Will investors continue to favor value in 2021? Will small-caps reverse their recent weak trend? Given low interest rates, we expect growth stocks to resume outperformance over time. Investors seeking value are encouraged to focus on dividends and look for yields in the 3%-4% range. As for small-caps, the promise of the vaccine is encouraging for these companies, which typically don't have the gilt-edged balance sheets of large-caps and are thus more dependent on a strong U.S. economy. Small-cap valuations remain depressed, and this group looks to offer value into 2022.

Stocks were mostly lower on Friday morning following a weaker-than-expected August employment report. The Labor Department said that the U.S. added just 235,000 payroll jobs in August, down from a revised 1.053 million in July and well below the Reuters consensus forecast of 728,000. The official unemployment rate fell to 5.2%, down from 5.4% in July. The Dow fell 0.2%, the S&P fell 0.1%, and the Nasdaq rose 0.1%. Crude oil traded near $70 per barrel, while gold rose $22 to $1833 per ounce.

The second quarter in 2021 was a good one for stocks, as the S&P 500 increased more than 8.5%. The average stock in the Argus Universe of Coverage advanced 5.5%, and the median stock gained 4.0%. The average Argus BUY-rated stock increased 6.0%, while the average HOLD-rated stock rose 4.0%. Will investors continue to favor value in 2021? Will small-caps continue their recent strong run? Given low interest rates, we expect growth stocks will resume outperformance over time -- but think this may be the one year in five when value leads. Investors seeking value are encouraged to focus on dividends and look for yields in the 3%-4% range. As for small-caps, the promise of the vaccine is encouraging for these companies, which typically don't have the gilt-edged balance sheets of large-caps and are more dependent on a strong U.S. economy. Small-cap valuations remain depressed despite the recent run, and this group continues to look well-positioned in 2021.

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

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, prior to the pandemic, had expanded to record levels. And now, the U.S. Healthcare industry is mobilizing to improve COVID-19 testing, treatments and vaccines. Consider that U.S. GDP was approximately $1 trillion in 1930 but nearly $22 trillion at the end of 2019. That's growth of 22-times. Meanwhile, the U.S. population has grown less than 3-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 $32 trillion, representing 41% of global equity market capitalization, while U.S. GDP represented only 25% of global GDP. The current low level of interest rates (the benchmark 10-year Treasury bond yield is 1.1%) and the relatively high level of the dollar both attest to the confidence that global investors have in the innovative U.S. economy.

There are now more than 80 million Millennials, born between 1982 and 2000 and ranging in age from their early 20s to their late-30s. This generation is the largest in history - bigger than even the Baby Boomers. Yet despite their size, and according to our research, Millennials currently account for 25% of total U.S income - some $3.1 trillion in direct annual purchasing power. Millennials are already coveted by marketers, even though their annual average income is 40% below the spending levels of the generation ahead of them (Gen X) and 30% below the spending levels of Baby Boomers, who are slowing down. But as Millennials rise into their peak earning years, their earnings are expected to grow.

Are Rising Rates Threatening the Housing Rally?

While the first month of 2021 started out great, it fizzled over its last few days. The S&P 500, which was up 2.6% on January 25, ended with a 1.1% loss. The Nasdaq held on to some of its gains, rising 1.4%, while the Nasdaq 100 (QQQ) rose 0.3% after being up almost 5% on January 26. The S&P 400 MidCap (MDY) rose 1.4%, while the Russell 2000 (IWM) had a very good month, delivering a 4.8% jump.

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.

Stocks rose on Thursday afternoon, reversing early losses, on news of revived fiscal stimulus talks in Washington. However, investors also focused on soaring coronavirus cases and the economic impact of new pandemic-related restrictions. On the employment front, first-time unemployment benefit claims rose from the prior week to 742,000, above the consensus forecast of 700,000, while continuing claims fell to 6.372 million, below the consensus of 6.4 million. However, an additional 233,000 Americans began to receive extended federal employment benefits as their state benefits expired. The Dow rose 0.15%, the S&P 0.39%, and the Nasdaq 0.87%. Crude oil rose slightly to $42 per barrel, while gold fell $8 to $1866 per ounce.

Stocks rose on Thursday afternoon, reversing early losses, on news of revived fiscal stimulus talks in Washington. However, investors also focused on soaring coronavirus cases and the economic impact of new pandemic-related restrictions. On the employment front, first-time unemployment benefit claims rose from the prior week to 742,000, above the consensus forecast of 700,000, while continuing claims fell to 6.372 million, below the consensus of 6.4 million. However, an additional 233,000 Americans began to receive extended federal employment benefits as their state benefits expired. The Dow rose 0.15%, the S&P 0.39%, and the Nasdaq 0.87%. Crude oil rose slightly to $42 per barrel, while gold fell $8 to $1866 per ounce.

July more than lived up to its reputation as the best summer stock month, delivering capital appreciation of 5.5%. End of story: nothing to see here, move along.

July more than lived up to its reputation as the best summer stock month, delivering capital appreciation of 5.5%. End of story: nothing to see here, move along.

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, prior to the pandemic, had expanded to record levels. And now the U.S. Healthcare industry is mobilizing to improve COVID-19 testing, treatments and, ultimately, a vaccine. If U.S. corporations weren't innovating, creating new products and services and moving into new markets and applications, the domestic economy would not have recently completed a 10-year expansion phase before the coronavirus hit, and capital would not be flooding into the country. A couple of statistics should help illustrate our point. Consider that U.S. GDP was approximately $1 trillion in 1930 but nearly $22 trillion in 2019. That's growth of 22-times. Meanwhile, the U.S. population has grown less than 3-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 2018 was approximately $32 trillion, representing 41% of global equity market capitalization, while U.S. GDP represented only 25% of global GDP.

We have published our latest version of the Argus Millennial Generation portfolio. This new generation of consumers - the Millennials - has recently become the largest demographic cohort in the country, and this group, with new lifestyle preferences and different career goals, is demanding a new menu of sustainable products and services. The intersection of important Millennial trends - sustainability, healthier living, an entrepreneurial spirit - has resulted in the emergence and growth of numerous companies well suited to the new generation. Many of these companies are expected to be future industry leaders and are included in the dynamic Argus Universe of Coverage. A diversified portfolio, of course, is more than just a list of companies linked to themes. To build the Argus Millennial Generation Portfolio, we applied financial concepts such as industry diversification, income generation, risk reduction and growth at a reasonable price.

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 Kroger Co. (KR); Palo Alto Networks Inc (PANW); Snap Inc (SNAP); Incyte Corp. (INCY) and the Focus List deletions are Colgate-Palmolive Co. (CL); Emergent BioSolutions Inc (EBS); Marvell Technology Group Ltd (MRVL); Splunk Inc (SPLK).

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 Kroger Co. (KR); Palo Alto Networks Inc (PANW); Snap Inc (SNAP); Incyte Corp. (INCY) and the Focus List deletions are Colgate-Palmolive Co. (CL); Emergent BioSolutions Inc (EBS); Marvell Technology Group Ltd (MRVL); Splunk Inc (SPLK).

A new generation of consumers - the Millennials - has become the largest demographic cohort in the country. This group, with new lifestyle preferences and different career goals, is demanding a new menu of sustainable products and services. There are now more than 80 million Millennials, born between 1982 and 2000 and ranging in age from their early 20s to their late-30s. This generation is the largest in history - bigger than even the Baby Boomers. Yet despite their size, and according to our research, Millennials currently account for 24% of total U.S income -- some $2.9 trillion in direct annual purchasing power, mostly representing older Millennials established in their work and families. Of course, Millennials are already coveted by marketers, even though their annual average income is 40% below the spending levels of the generation ahead of them (Gen X) and 30% below the spending levels of Baby Boomers, who are slowing down. That's because as Millennials rise into their peak earning years, their earnings are expected to grow. Disposable income will further rise as 30-something Millennials pay off their "mountain" of student debt. We have added the following stocks to our Millennial portfolio based on our latest review of fundamentals and consultation with our team of analysts.

A new generation of consumers - the Millennials - has become the largest demographic cohort in the country. This group, with new lifestyle preferences and different career goals, is demanding a new menu of sustainable products and services. There are now more than 80 million Millennials, born between 1982 and 2000 and ranging in age from their early 20s to their late-30s. This generation is the largest in history - bigger than even the Baby Boomers. Yet despite their size, and according to our research, Millennials currently account for 24% of total U.S income -- some $2.9 trillion in direct annual purchasing power, mostly representing older Millennials established in their work and families. Of course, Millennials are already coveted by marketers, even though their annual average income is 40% below the spending levels of the generation ahead of them (Gen X) and 30% below the spending levels of Baby Boomers, who are slowing down. That's because as Millennials rise into their peak earning years, their earnings are expected to grow. Disposable income will further rise as 30-something Millennials pay off their "mountain" of student debt. We have added the following stocks to our Millennial portfolio based on our latest review of fundamentals and consultation with our team of analysts.

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.

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.

Stocks started to recover in April, and over the past month the S&P 500 has regained 13%. Momentum investing is a strategy designed to take advantage of current or recent market trends. Momentum investors identify and invest in stocks that typically are moving higher over a period of time. We like to see a chart featuring a prolonged period of rising highs and rising lows. Generally, the fundamentals are favorable for these stocks, which is why they are on the way up. But at the very least, momentum investors need to be cognizant of valuation, because at times these stocks may move outside of normal value bounds. In that case, investors may want to wait for a pullback in the stock price to a support level such as a 50-day or 200-day moving average. Below are the top 15 BUY-rated momentum stocks for the trailing one-month period, many from the beaten-down Energy and Retail sectors, but also a couple from Healthcare.

Stocks started to recover in April, and over the past month the S&P 500 has regained 13%. Momentum investing is a strategy designed to take advantage of current or recent market trends. Momentum investors identify and invest in stocks that typically are moving higher over a period of time. We like to see a chart featuring a prolonged period of rising highs and rising lows. Generally, the fundamentals are favorable for these stocks, which is why they are on the way up. But at the very least, momentum investors need to be cognizant of valuation, because at times these stocks may move outside of normal value bounds. In that case, investors may want to wait for a pullback in the stock price to a support level such as a 50-day or 200-day moving average. Below are the top 15 BUY-rated momentum stocks for the trailing one-month period, many from the beaten-down Energy and Retail sectors, but also a couple from Healthcare.

The S&P 500 fell 3.1% on Tuesday, its worst day since April 1 (when it lost 4.4%). Recent leaders, the Nasdaq and Nasdaq 100 (QQQ), were hit the worst, falling 3.5% and 3.7%, respectively. Recent laggards, the Russell 2000 (IWM) and the S&P 400 MidCap (MDY), fell 2.4% and 2.7%, respectively. The Dow Industrials (DIA) lost 2.7%.

The S&P 500 fell 3.1% on Tuesday, its worst day since April 1 (when it lost 4.4%). Recent leaders, the Nasdaq and Nasdaq 100 (QQQ), were hit the worst, falling 3.5% and 3.7%, respectively. Recent laggards, the Russell 2000 (IWM) and the S&P 400 MidCap (MDY), fell 2.4% and 2.7%, respectively. The Dow Industrials (DIA) lost 2.7%.

"In like a lion, out like a lamb." Let's hope March lives up to its reputation, as the lion's (stock market) roar has been deafening. Yesterday, we harped on the terrible price action of Mondays in March, but Turnaround Tuesday has been in full force as well. The last three Tuesday's have seen gains of 4.9%, 6%, and 9.4% for the S&P 500.

"In like a lion, out like a lamb." Let's hope March lives up to its reputation, as the lion's (stock market) roar has been deafening. Yesterday, we harped on the terrible price action of Mondays in March, but Turnaround Tuesday has been in full force as well. The last three Tuesday's have seen gains of 4.9%, 6%, and 9.4% for the S&P 500.

Argus Research covers 55 leading global healthcare companies. Many of them are working on new products, vaccines and medicals supplies and equipment to help healthcare professionals treat Covid-19 patients and prevent the outbreak from spreading even further than its current trajectory projects. Argus Senior Analyst David Toung and Security Analyst Jasper Hellweg cited the following companies in the current battle.

Argus Research covers 55 leading global healthcare companies. Many of them are working on new products, vaccines and medicals supplies and equipment to help healthcare professionals treat Covid-19 patients and prevent the outbreak from spreading even further than its current trajectory projects. Argus Senior Analyst David Toung and Security Analyst Jasper Hellweg cited the following companies in the current battle.

Stocks fell sharply on Tuesday morning, failing to hold initial gains after the Fed announced an 'emergency' 50-basis-point rate cut in response to the coronavirus. Earlier in the day, G7 finance officials said that they would take 'appropriate policy steps' to mitigate the economic impact of the virus, but did not announce any specific measures. The Dow fell 1.8%, the S&P 1.9%, and the Nasdaq 1.5%. Crude oil traded near $47 per barrel, while gold rose $37 to $1632 per ounce.

Stocks fell sharply on Tuesday morning, failing to hold initial gains after the Fed announced an 'emergency' 50-basis-point rate cut in response to the coronavirus. Earlier in the day, G7 finance officials said that they would take 'appropriate policy steps' to mitigate the economic impact of the virus, but did not announce any specific measures. The Dow fell 1.8%, the S&P 1.9%, and the Nasdaq 1.5%. Crude oil traded near $47 per barrel, while gold rose $37 to $1632 per ounce.

The Labor Department's Nonfarm Payrolls report for January will be released on Friday, February 7. Argus is forecasting that the healthy payrolls growth over the six months, when monthly payroll reports have averaged 190,000 new jobs, will slow a bit in 2020. We estimate U.S. businesses generated a solid 150,000 jobs in January, up slightly from December's 145,000. Our monthly payrolls forecast is based on factors including momentum in job creation, our discussions with CEOs and CFOs about the impact of the trade wars on their hiring plans, layoff announcements, and our forecasts for GDP and leading economic indicators. The payrolls report also will include the latest reading on unemployment, which is currently near historical lows at a 3.5% rate. However, many workers, post the 2007-2009 recession, either retired or became discouraged and left the workforce. The labor participation rate is a low 63.2%, versus a 10-year average of 65%. We think the headline U3 unemployment rate will remain steady at 3.5%, as the workforce participation rate continues its slow recovery. We also think the extra slack in the economy from the low labor participation rate will keep wage growth in the 3.0% range.

The Labor Department's Nonfarm Payrolls report for January will be released on Friday, February 7. Argus is forecasting that the healthy payrolls growth over the six months, when monthly payroll reports have averaged 190,000 new jobs, will slow a bit in 2020. We estimate U.S. businesses generated a solid 150,000 jobs in January, up slightly from December's 145,000. Our monthly payrolls forecast is based on factors including momentum in job creation, our discussions with CEOs and CFOs about the impact of the trade wars on their hiring plans, layoff announcements, and our forecasts for GDP and leading economic indicators. The payrolls report also will include the latest reading on unemployment, which is currently near historical lows at a 3.5% rate. However, many workers, post the 2007-2009 recession, either retired or became discouraged and left the workforce. The labor participation rate is a low 63.2%, versus a 10-year average of 65%. We think the headline U3 unemployment rate will remain steady at 3.5%, as the workforce participation rate continues its slow recovery. We also think the extra slack in the economy from the low labor participation rate will keep wage growth in the 3.0% range.

July more than lived up to its reputation as the best summer stock month, delivering capital appreciation of 5.5%. End of story: nothing to see here, move along.

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 Kroger Co. (KR); Palo Alto Networks Inc (PANW); Snap Inc (SNAP); Incyte Corp. (INCY) and the Focus List deletions are Colgate-Palmolive Co. (CL); Emergent BioSolutions Inc (EBS); Marvell Technology Group Ltd (MRVL); Splunk Inc (SPLK).

A new generation of consumers - the Millennials - has become the largest demographic cohort in the country. This group, with new lifestyle preferences and different career goals, is demanding a new menu of sustainable products and services. There are now more than 80 million Millennials, born between 1982 and 2000 and ranging in age from their early 20s to their late-30s. This generation is the largest in history - bigger than even the Baby Boomers. Yet despite their size, and according to our research, Millennials currently account for 24% of total U.S income -- some $2.9 trillion in direct annual purchasing power, mostly representing older Millennials established in their work and families. Of course, Millennials are already coveted by marketers, even though their annual average income is 40% below the spending levels of the generation ahead of them (Gen X) and 30% below the spending levels of Baby Boomers, who are slowing down. That's because as Millennials rise into their peak earning years, their earnings are expected to grow. Disposable income will further rise as 30-something Millennials pay off their "mountain" of student debt. We have added the following stocks to our Millennial portfolio based on our latest review of fundamentals and consultation with our team of analysts.

Stocks started to recover in April, and over the past month the S&P 500 has regained 13%. Momentum investing is a strategy designed to take advantage of current or recent market trends. Momentum investors identify and invest in stocks that typically are moving higher over a period of time. We like to see a chart featuring a prolonged period of rising highs and rising lows. Generally, the fundamentals are favorable for these stocks, which is why they are on the way up. But at the very least, momentum investors need to be cognizant of valuation, because at times these stocks may move outside of normal value bounds. In that case, investors may want to wait for a pullback in the stock price to a support level such as a 50-day or 200-day moving average. Below are the top 15 BUY-rated momentum stocks for the trailing one-month period, many from the beaten-down Energy and Retail sectors, but also a couple from Healthcare.

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, 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.

The S&P 500 fell 3.1% on Tuesday, its worst day since April 1 (when it lost 4.4%). Recent leaders, the Nasdaq and Nasdaq 100 (QQQ), were hit the worst, falling 3.5% and 3.7%, respectively. Recent laggards, the Russell 2000 (IWM) and the S&P 400 MidCap (MDY), fell 2.4% and 2.7%, respectively. The Dow Industrials (DIA) lost 2.7%.

"In like a lion, out like a lamb." Let's hope March lives up to its reputation, as the lion's (stock market) roar has been deafening. Yesterday, we harped on the terrible price action of Mondays in March, but Turnaround Tuesday has been in full force as well. The last three Tuesday's have seen gains of 4.9%, 6%, and 9.4% for the S&P 500.

Stocks fell sharply on Tuesday morning, failing to hold initial gains after the Fed announced an 'emergency' 50-basis-point rate cut in response to the coronavirus. Earlier in the day, G7 finance officials said that they would take 'appropriate policy steps' to mitigate the economic impact of the virus, but did not announce any specific measures. The Dow fell 1.8%, the S&P 1.9%, and the Nasdaq 1.5%. Crude oil traded near $47 per barrel, while gold rose $37 to $1632 per ounce.

Argus Research covers 55 leading global healthcare companies. Many of them are working on new products, vaccines and medicals supplies and equipment to help healthcare professionals treat Covid-19 patients and prevent the outbreak from spreading even further than its current trajectory projects. Argus Senior Analyst David Toung and Security Analyst Jasper Hellweg cited the following companies in the current battle.

The Labor Department's Nonfarm Payrolls report for January will be released on Friday, February 7. Argus is forecasting that the healthy payrolls growth over the six months, when monthly payroll reports have averaged 190,000 new jobs, will slow a bit in 2020. We estimate U.S. businesses generated a solid 150,000 jobs in January, up slightly from December's 145,000. Our monthly payrolls forecast is based on factors including momentum in job creation, our discussions with CEOs and CFOs about the impact of the trade wars on their hiring plans, layoff announcements, and our forecasts for GDP and leading economic indicators. The payrolls report also will include the latest reading on unemployment, which is currently near historical lows at a 3.5% rate. However, many workers, post the 2007-2009 recession, either retired or became discouraged and left the workforce. The labor participation rate is a low 63.2%, versus a 10-year average of 65%. We think the headline U3 unemployment rate will remain steady at 3.5%, as the workforce participation rate continues its slow recovery. We also think the extra slack in the economy from the low labor participation rate will keep wage growth in the 3.0% range.

The Healthcare sector has lagged the broad market in 2019. The sector has gained 14% this year, compared to 24% for the S&P 500. Given strong employment and wage-growth trends, consumer utilization of healthcare services continues to rise. Consumers are now more willing to spend on lifestyle enhancements along with necessary spending on life-saving treatments. In addition, the survival of the Affordable Care Act has kept the ranks of insured U.S. citizens above the historical average, further increasing consumer spending on healthcare services and products. The sector accounts for 14.0% of the S&P 500, and includes companies in the pharmaceuticals, medical devices, healthcare services, and insurance industries. We have an Over-Weight ranking on the Healthcare sector and think investors should look to allocate up to 15%-18% of their diversified portfolios to the group. Here is how we use our analysts' Healthcare sector ideas in our Focus List and Model Portfolios. All of the following stocks are rated BUY.

The Healthcare sector has lagged the broad market in 2019. The sector has gained 14% this year, compared to 24% for the S&P 500. Given strong employment and wage-growth trends, consumer utilization of healthcare services continues to rise. Consumers are now more willing to spend on lifestyle enhancements along with necessary spending on life-saving treatments. In addition, the survival of the Affordable Care Act has kept the ranks of insured U.S. citizens above the historical average, further increasing consumer spending on healthcare services and products. The sector accounts for 14.0% of the S&P 500, and includes companies in the pharmaceuticals, medical devices, healthcare services, and insurance industries. We have an Over-Weight ranking on the Healthcare sector and think investors should look to allocate up to 15%-18% of their diversified portfolios to the group. Here is how we use our analysts' Healthcare sector ideas in our Focus List and Model Portfolios. All of the following stocks are rated BUY.

The major indices recovered from early losses on Wednesday morning, as investors awaited new information on trade, impeachment, and Federal Reserve policy. The CPI for October came in slightly above expectations, showing some inflation, though not nearly as much as the Fed's 2% 'symmetrical' target. Industries doing well today include Metals & Mining, Electric Utilities, and Household Products. Industries showing weakness include Auto Components, Distributors, and Construction & Engineering. The VIX is up 0.29 to 12.97 after the previous close of 12.68. The Dow rose 0.1%, the S&P rose 0.1%, and the Nasdaq was flat. Crude oil traded near $57 per barrel, while gold rose $10 to $1464 per ounce.

The major indices recovered from early losses on Wednesday morning, as investors awaited new information on trade, impeachment, and Federal Reserve policy. The CPI for October came in slightly above expectations, showing some inflation, though not nearly as much as the Fed's 2% 'symmetrical' target. Industries doing well today include Metals & Mining, Electric Utilities, and Household Products. Industries showing weakness include Auto Components, Distributors, and Construction & Engineering. The VIX is up 0.29 to 12.97 after the previous close of 12.68. The Dow rose 0.1%, the S&P rose 0.1%, and the Nasdaq was flat. Crude oil traded near $57 per barrel, while gold rose $10 to $1464 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 480 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. The following 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 480 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. The following 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 Activision Blizzard Inc (ATVI); Restaurant Brands Intl In (QSR); Wells Fargo & Co. (WFC); Emergent BioSolutions Inc (EBS) and the Focus List deletions are Adobe Inc (ADBE); KKR & Co. Inc. (KKR); Pfizer Inc. (PFE); Ulta Beauty Inc (ULTA).

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 Activision Blizzard Inc (ATVI); Restaurant Brands Intl In (QSR); Wells Fargo & Co. (WFC); Emergent BioSolutions Inc (EBS) and the Focus List deletions are Adobe Inc (ADBE); KKR & Co. Inc. (KKR); Pfizer Inc. (PFE); Ulta Beauty Inc (ULTA).

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 are often more focused on domestic operations and may not be exposed to the uncertainty surrounding the ongoing trade wars. For another, the long-term record favors small-caps over large-caps. Since 2003, the Russell 2000 Index has climbed 260%, compared to an advance of 189% for the Russell 1000 Value Index. But small-caps can be risky. Large-caps outperformed small-caps in nine of the 16 years of our test period. Annual returns were negative four times for both indices, but the average decline for small-caps was 18% in down years versus an average 12% annual decline for large-caps in down years. The standard deviation for monthly returns was 5.29% for small-caps over the 15-year period, versus 3.89% for large-caps. 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 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 are often more focused on domestic operations and may not be exposed to the uncertainty surrounding the ongoing trade wars. For another, the long-term record favors small-caps over large-caps. Since 2003, the Russell 2000 Index has climbed 260%, compared to an advance of 189% for the Russell 1000 Value Index. But small-caps can be risky. Large-caps outperformed small-caps in nine of the 16 years of our test period. Annual returns were negative four times for both indices, but the average decline for small-caps was 18% in down years versus an average 12% annual decline for large-caps in down years. The standard deviation for monthly returns was 5.29% for small-caps over the 15-year period, versus 3.89% for large-caps. 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 15%-20% of the U.S. stock market's capitalization is comprised of small- and mid-cap stocks.