Incyte Corporation (INCY) stock forecast and price target

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

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 $20 billion to define a SMID stock.

Stocks rose on Tuesday morning as weaker-than-expected economic data raised the likelihood that the Fed would hold rates steady at its September meeting. In its monthly JOLTS survey, the Labor Department said that U.S. job openings fell to 8.83 million at the end of July, down from 9.16 million at the end of June and the third straight monthly decline. The reading was well below the Reuters consensus of 9.47 million. Consumer confidence also slipped. The Conference Board said that its consumer confidence index fell to 106.1 in August from 114 in July. The Dow rose 0.3%, the S&P 0.9%, and the Nasdaq 1.4%. Crude oil fell slightly to $80 per barrel, while gold traded near $1949 per ounce.

Stocks rose on Wednesday morning following positive inflation data. The Labor Department said that its all-items consumer price index rose 3.0% from the prior year in June, down from a 4.0% increase in May and below the Reuters consensus of 3.1% growth. The core CPI, excluding food and energy, rose 4.8% from the prior year, also slowing from 5.3% in May and below the consensus forecast. The Dow rose 0.8%, the S&P 1.0%, and the Nasdaq 1.4%. Crude oil rose $1 to $76 per barrel, while gold jumped $24 to $1962 per ounce.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

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.

Investors have endured a rollercoaster start to 2023, with a rally in January offset by a pullback in February. Year-to-date, the S&P 500 is up 3.4%. Historically, March had been a good month for the markets -- prior to 2020. The average gain for the S&P 500 in the month of March since 1980 is now 0.95%, after recording the COVID-induced decline of 12.5% in 2020. As such, March is in seventh place in terms of average monthly gains, with a winning percentage of 63%. We note that market returns in March have exceeded 4% on seven occasions since 1980, including a 4.2% gain in 2021 on COVID-19 vaccination progress and a 6.6% advance in 2016 as the market was beginning to recover from the oil plunge of 2014-2015. Last year, March was one of the better months of a dismal year, with a gain of 3.6%. But there have been some clunkers, including 1980 (-10%), 2001 (-6.4%), 1994 (-4.5%), 1997 (-4.3%), 1988 (-3.3%) and 2020. Generally, March is a quiet month on Wall Street, as the fourth-quarter earnings reports are finished in February. Without profits to review, investors will be paying very close attention to economic reports, including the Nonfarm Payrolls report next Friday, the Consumer Price Inflation report on March 14, and the Federal Reserve's two-day meeting. We continue to hold to our forecast for a positive year for the S&P 500, with returns near the historical average.

Monday Tee Up: Barrage of Retail Earnings

"Well, well, well," said the Bear to the growing number of Bulls. "Not so fast." On Wednesday, another trip to the 200-day average by the S&P 500 (and almost to the bear-market trendline) ended at a large "Do Not Pass Go" sign. As many know, that sign also reads "Do Not Collect $200," in this case a reference to the 200-day average. The SPX gave back 1.6%, the Nasdaq shed 1.2%, and the QQQs dropped 1.3%. Both the S&P 400 and the Russell 2000 ran smack into chart resistance from their recent highs in November and December, and did a 180.

As the end of 2022 draws near, many market participants are happy to see that the painful year is almost over. From market strategists, portfolio managers, stock analysts, pension funds, hedge funds, market technicians, bond analysts, individual investors, and perma-bulls, it seemed like a period where everything went against both the stock and bond markets. Certainly, and unfortunately, much of the pain was self-inflicted -- as too much liquidity led to out-of-control inflation and then the Federal Reserve was far behind the curve (and has been playing catch up for most of the year).

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.

Stocks were higher on Thursday morning after Fed Chair Powell emphasized that he is committed to fighting inflation, leading to expectations that the central bank will raise rates by 75 basis points at the next policy meeting. Weekly jobless claims unexpectedly declined to 222,000 unemployment claims, against estimates for 246,000 claims. Crude oil rose 2% to $83.29 per barrel, while gold fell to $1718 per ounce. The Dow rose 0.6%, the S&P 500 rose 0.7% and the Nasdaq was up 0.8%.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

Is price volatility as well as expected volatility breaking down? It depends how you measure it and what period you are examining. The 40-day rate-of-change (ROC) for the S&P 500 is 1.6%, while the 22-day ROC is 8%. The 140-day ROC is -17%, while the 330-day ROC is 0%. Oh, the games we can play with numbers!

Vickers Stock Research, a subsidiary of Argus Research Group, tracks and analyzes insider trading and institutional ownership trends. Form 13-Fs are due 45 days after the end of calendar quarters, and have now come in from 1Q22. We like to review the 13Fs of the major activist investors, including Carl Icahn, Trian Fund Management, Jana Partners, and ValueAct Holdings, among others. Activist investing has evolved in recent years and is now less about generating a short-term return on an underpriced stock and more about achieving long-term returns through an active management/investor partnership. Here are some recent new purchases and key holdings of activist investors, according to the data from Vickers.

Stocks rallied on Thursday morning, helped by strong earnings reports from major retailers. Macy's shares rose 16% after the company posted stronger-than-expected first-quarter sales and earnings and raised its full-year guidance. Dollar General also rose strongly following above-consensus first-quarter results. The Dow rose 1.5%, the S&P 1.8%, and the Nasdaq 2.3%. Crude oil rose $4 to $114 per barrel, while gold fell $2 to $1847 per ounce.

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 rose on Thursday morning, led by the Technology and Basic Materials sectors. The war in Ukraine entered its second month as Western leaders, meeting in Brussels, pledged to provide equipment that would help Ukraine respond to possible chemical, biological, or nuclear attacks. The U.S. also said that it would accept 100,000 Ukrainian refugees and provide $1 billion to help European countries deal with the refugee crisis. On the economic front, S&P Global reported that its U.S. Composite PMI output index, which tracks both manufacturing and services, rose to 58.5 in March from 55.9 in February. The Dow rose 0.7%, the S&P 0.9%, and the Nasdaq 1.1%. Crude oil traded near $114 per barrel, while gold jumped $27 to $1964 per ounce.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

After numerous weeks featuring a plateau in insider sentiment (as corporate executives, directors, and beneficial owners were assessing the initial behavior of stocks in 2022), sentiment signals became very clear this week. Across all exchanges over the past week, the one-week sell/buy ratios from Vickers Stock Research have moved deeply into bullish territory. Vickers' Total One-Week Sell/Buy Ratio is at its most-optimistic level since March 2020, when the market was reacting to the early stages of the COVID-19 pandemic. The current reading is 1.01, representing a nearly identical rate of buying and selling activity among insiders. By comparison, insiders typically sell shares 2.0 to 2.5 times more often than they buy. The Total Eight-Week Sell/Buy Ratio stands at 2.54, improved from 3.08 at the beginning of 2022. While the current data suggests that insiders have started to "buy the bottom," transaction volume remains light because of trading restrictions placed on insiders during earnings season. While there is sufficient volume to suggest this bullishness is indeed meaningful, we'll look to see if this behavior carries over into the current week.

While stocks continue to trade downward, insider sentiment remains generally benign. Indeed, the overall Insider Index from Vickers Stock Research is resting at its most-attractive level since November 2020. Broadly speaking, insiders have maintained a sense of calm during the selloff, with data from Vickers suggesting no panic. Still, despite the unthreatening sentiment and the reduction in stock multiples, there is also no evidence that insiders have started to 'buy the bottom.' We'll watch carefully for any signs that insiders are ready to jump in -- but also note that many of these investors are currently sidelined by trading restrictions that are in place during earnings season.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

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.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

Argus' Outlook for Value Sectors

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

Even with indices bobbing around all-time highs, the stock market continues to meander and has not gotten much done of late. That said, successful rotation has kept breadth strong. Most stocks are trading above their long-term support. In the near-term, though, the market is showing some wear and tear.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

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

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.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

Stocks fell on Friday morning as a long-awaited fiscal stimulus package remained elusive despite signs that Democrats and Republicans were moving closer to an agreement. Congress is instead likely to first pass another stopgap spending bill that will keep the government running past midnight, while also providing time for additional stimulus negotiations. The package under discussion reportedly includes one-time payments of $600 to most Americans, extended unemployment benefits, help for states in vaccine distribution, and aid for small businesses. The Dow fell 0.6%, the S&P 0.6%, and the Nasdaq 0.3%. Crude oil traded near $49 per barrel, while gold rose $1 to $1892 per ounce.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

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).

A handful of sectors are shining through the pandemic, while others are struggling badly. Through 3Q, six of 11 GICS sectors had positive performances for the year-to-date, and the S&P 500 was up 2%. The leading sectors included Technology (up 29%) and Consumer Discretionary (+23%). The badly lagging sectors include Real Estate (-10%), Financials (-21%) and Energy (-41%). On a three-year basis, two clear trends emerge: the Tech sector has outperformed three years in a row, while the Energy sector has lagged badly three years in a row. Will the trends reverse next year? We doubt it. Investors are eager to allocate capital to innovative IT companies that are connecting people (even as they are practicing social distancing) and making corporations more efficient. Meantime, the Energy sector is facing "peak demand" forecasts at some point in the next 2-3 decades, suggesting that the long-term growth outlook is capped. In addition to Technology, the other sectors we favor for "secular" long-term EPS growth include Healthcare (which is on the front lines fighting Covid-19) and Financial Services.

A handful of sectors are shining through the pandemic, while others are struggling badly. Through 3Q, six of 11 GICS sectors had positive performances for the year-to-date, and the S&P 500 was up 2%. The leading sectors included Technology (up 29%) and Consumer Discretionary (+23%). The badly lagging sectors include Real Estate (-10%), Financials (-21%) and Energy (-41%). On a three-year basis, two clear trends emerge: the Tech sector has outperformed three years in a row, while the Energy sector has lagged badly three years in a row. Will the trends reverse next year? We doubt it. Investors are eager to allocate capital to innovative IT companies that are connecting people (even as they are practicing social distancing) and making corporations more efficient. Meantime, the Energy sector is facing "peak demand" forecasts at some point in the next 2-3 decades, suggesting that the long-term growth outlook is capped. In addition to Technology, the other sectors we favor for "secular" long-term EPS growth include Healthcare (which is on the front lines fighting Covid-19) and Financial Services.

Stocks were mixed on Monday morning after a strong run last week that took the S&P and the Nasdaq to record highs. The recent gains have been driven by the Fed's policy shift, which will keep interest rates low for an extended period, as well as by declining coronavirus cases in many states and positive vaccine developments. However, as September begins, investors will also be closely watching the uncertain economic recovery and continued high unemployment, along with rising civil unrest and a tightening presidential race. The Dow fell 0.8%, the S&P fell 0.1%, and the Nasdaq rose 0.5%. Crude oil traded near $43 per barrel, while gold fell slightly to $1974 per ounce.

Stocks were mixed on Monday morning after a strong run last week that took the S&P and the Nasdaq to record highs. The recent gains have been driven by the Fed's policy shift, which will keep interest rates low for an extended period, as well as by declining coronavirus cases in many states and positive vaccine developments. However, as September begins, investors will also be closely watching the uncertain economic recovery and continued high unemployment, along with rising civil unrest and a tightening presidential race. The Dow fell 0.8%, the S&P fell 0.1%, and the Nasdaq rose 0.5%. Crude oil traded near $43 per barrel, while gold fell slightly to $1974 per ounce.

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.

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. 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. 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 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).

Reopening, with Masks On: Our Monthly Survey of the Economy, Interest Rates, and Markets

Reopening, with Masks On: Our Monthly Survey of the Economy, Interest Rates, and Markets

Crude oil (WTI) fell to $6.50/barrel on Tuesday, the lowest level since late 1973. When the May futures contract expired this week, oil was below $0. On Wednesday, WTI rebounded sharply (it's all relative) to $14/barrel, and over 100% from Tuesday's low. In the beginning of 2020, crude was up at $65 and in mid-February, it was in the mid-$50's.

Crude oil (WTI) fell to $6.50/barrel on Tuesday, the lowest level since late 1973. When the May futures contract expired this week, oil was below $0. On Wednesday, WTI rebounded sharply (it's all relative) to $14/barrel, and over 100% from Tuesday's low. In the beginning of 2020, crude was up at $65 and in mid-February, it was in the mid-$50's.

The 2020 bear market is not playing many favorites. Through March 31, all 11 GICS sectors had negative performances for the year-to-date, and the S&P 500 was off 20%. Leading sectors included Information Technology (down only 12%), Healthcare (-13%), Consumer Staples (-13%) and Utilities (-14%). Badly lagging sectors include Industrials (-27%), Financials (-32%) and Energy (-51%). On a three-year basis, two clear trends emerge: the IT sector has outperformed three years in a row, while the Energy sector has lagged badly three years in a row. Will the trends reverse later this year? We think that is doubtful. Investors increasingly are eager to allocate capital to innovative IT companies that are connecting people -- even as they are practicing social distancing -- and making corporations more efficient. Meanwhile, the Energy sector is facing "peak demand" forecasts at some point in the next two to three decades, suggesting that the long-term growth outlook is severely capped. In addition to IT, other sectors we favor for "secular" long-term EPS growth include Healthcare, which is on the front lines fighting Covid-19, and Financial Services.

The 2020 bear market is not playing many favorites. Through March 31, all 11 GICS sectors had negative performances for the year-to-date, and the S&P 500 was off 20%. Leading sectors included Information Technology (down only 12%), Healthcare (-13%), Consumer Staples (-13%) and Utilities (-14%). Badly lagging sectors include Industrials (-27%), Financials (-32%) and Energy (-51%). On a three-year basis, two clear trends emerge: the IT sector has outperformed three years in a row, while the Energy sector has lagged badly three years in a row. Will the trends reverse later this year? We think that is doubtful. Investors increasingly are eager to allocate capital to innovative IT companies that are connecting people -- even as they are practicing social distancing -- and making corporations more efficient. Meanwhile, the Energy sector is facing "peak demand" forecasts at some point in the next two to three decades, suggesting that the long-term growth outlook is severely capped. In addition to IT, other sectors we favor for "secular" long-term EPS growth include Healthcare, which is on the front lines fighting Covid-19, and Financial Services.

Faced with one of the greatest economic challenges ever, U.S. corporations -- both inside and outside of the Healthcare sector -- are reallocating resources in an all-hands battle against COVID-19. Here are some of the companies and what they are doing.