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 global events. As well, the prices of SMID stocks generally are lower than the prices of large-caps. As well, there are long stretches in the record books when SMID stocks have outperformed large-caps. That said, SMID stocks can be risky. The standard deviation for monthly returns was 5.7% for SMID stocks over a 2003-2021 test period, versus 4.3% 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've seen growing evidence of rotation away from mega-cap tech. Indeed, even a textbook 'impressive' beat can lead to a 'sell the news' reaction for these stocks. Betting on more near-term upside from these stocks, no matter what they report, is a tough technical game as they all have extreme 14-day and 14-week Relative Strength Index (RSI) readings in the high 70s to mid-80s.

For a second week, insider-transaction data from Vickers Stock Research is generating bullish signals. Last week, insider-transaction volume was low as trading restrictions are in place during earnings season. But trades that did occur resulted in bullish insider-sentiment measures, especially open-market transactions (the most meaningful when considering sentiment).

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 fell on Tuesday morning on concerns about weak trade data from China, as both exports and imports declined more than expected in July. Investors also weighed Moody's credit downgrades of 10 U.S. banks. On the earnings front, UPS shares fell after the company reported mixed 2Q results and lowered its full-year revenue and margin forecasts. Meanwhile, Lilly jumped 17% after reporting strong 2Q results, helped by sales of its new diabetes drug, and raised its 2023 guidance. The Dow fell 1.0%, the S&P 1.1%, and the Nasdaq 1.4%. Crude oil fell slightly to $81.50 per barrel, while gold traded near $1960 per ounce.

Stocks rose modestly on Friday morning, led by the Technology and Consumer Discretionary sectors. Tesla and GM shares rose on news that GM would adopt Tesla's charging standard for electric vehicles; drivers of GM vehicles will also have access to the Tesla Supercharger Network beginning in 2024. Ford and Tesla have already announced a similar partnership. The Dow was flat, the S&P rose 0.1%, and the Nasdaq rose 0.3%. Crude oil traded near $71 per barrel, while gold fell slightly to $1978 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.

Small- and mid-cap stocks (SMID stocks) have underperformed large-caps over the past 12 months, but 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, high European inflation, and other geopolitical developments. As well, the prices of SMID stocks generally are lower than the prices of large-caps, with the P/E ratio on the Russell 2000 Small-Cap Index at 11 compared to a trailing P/E of 20 for the S&P 500. Finally, the long-term record has favored SMID stocks over large-caps. From 2003-2022, the Russell 2000 Index climbed 470%, compared to an advance of 444% for the S&P 500 index. Here are the stocks with market caps below $15 billion that are on the Argus BUY list and have been added to our Mid-Cap Theme Model Portfolio.

Stocks were mixed on Wednesday morning amid new manufacturing data and hawkish comments from Fed officials that pointed to an extended rate hike campaign. The Institute for Supply Management said that its manufacturing PMI rose to 47.7 in February, up slightly from 47.4 in January but below the Reuters consensus forecast of 48.0. Readings below 50 indicate contraction in manufacturing. The Dow rose 0.2%, the S&P fell 0.2%, and the Nasdaq fell 0.3%. Crude oil traded near $77 per barrel, while gold rose $12 to $1848 per ounce.

Stocks were mixed on Wednesday morning amid new manufacturing data and hawkish comments from Fed officials that pointed to an extended rate hike campaign. The Institute for Supply Management said that its manufacturing PMI rose to 47.7 in February, up slightly from 47.4 in January but below the Reuters consensus forecast of 48.0. Readings below 50 indicate contraction in manufacturing. The Dow rose 0.2%, the S&P fell 0.2%, and the Nasdaq fell 0.3%. Crude oil traded near $77 per barrel, while gold rose $12 to $1848 per ounce.

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Stocks were mostly lower on Thursday as investors weighed new inflation and employment data, along with a PMI index that showed a decline in manufacturing activity - the first since May 2020. The core PCE price index for October showed inflation slowing from both the prior month and the prior year, while first-time jobless claims were lower than expected. The Labor Department said that initial claims for state unemployment benefits dropped by 16,000 to 225,000 for the week ended November 26, below the consensus of 235,000. On Friday morning, investors will be focused on the Labor Department's November employment report. The current consensus calls for the addition of 200,000 payroll jobs, down from 261,000 in October, and a slightly higher unemployment rate of 3.8%. The Dow fell 0.56%, the S&P fell 0.09%, and the Nasdaq rose 0.13%. Crude oil rose 1% to more than $81 per barrel, while gold jumped $57 to $1817 per ounce.

Stocks were mostly higher on Thursday morning following new weekly employment data and mixed results from major retailers. Kohl's shares fell more than 5%, despite above-consensus 2Q EPS, after the company cut its full-year sales and earnings forecasts. On the positive side, BJ's Wholesale Club reported better-than-expected results and raised its full-year guidance, sending the shares up 8%. The Dow fell 0.1%, the S&P rose 0.2%, and the Nasdaq rose 0.4%. Crude oil rose 2% to $90 per barrel, while gold fell $4 to $1773 per ounce.

Reading Tea Leaves on the Labor Market |Jobs Friday

Stocks were mixed on Friday morning following the March employment report. The Labor Department said that the U.S. economy added 431,000 payroll jobs in March, down from a revised 750,000 in February and below the Bloomberg consensus forecast of 490,000. The official unemployment rate fell to 3.6%, below the consensus of 3.7% and down from 3.8% in February. The Dow fell 0.2%, the S&P fell 0.1%, and the Nasdaq rose 0.2%. Crude oil fell slightly to $100 per barrel, while gold traded near $1929 per ounce.

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The stock market is stumbling like a reveler exiting a company holiday party (remember those from pre-COVID times?). In the final full trading week of 2021, the S&P 500 slipped 1.94%; the Dow Industrials dropped 1.68%; and the Nasdaq crashed 2.95%. Predictably, growth stocks in the Nasdaq were hit hardest during a week in which the Fed doubled down on its QE taper and laid out its rate-hike timeline for 2022.

The performance of income-oriented securities is mixed in 2021, as the benchmark 10-year Treasury yield jumped from 0.9% in January to 1.75% in March and then dropped back to the current 1.25% range. The pack is generally led by income securities that have an equity component, such as REITs and high-yield dividend stocks, which are up 27% and 18%, respectively. (Note: we measure performance by reviewing category-specific ETFs.) Convertibles have returned almost 5% this year, while preferreds have risen 3%. At the other end of the spectrum, the major upward move in the bond benchmark earlier this year has impacted U.S. government bond performance, as that group is down 2.0%. Investors are worried about emerging market economies as well, and returns are also down about 2.0% for that group. The overall fixed-income security benchmark AGG is down 1.2% year-to-date. At this point in the macro cycle, we see better value in intermediate (3- to 7-year) U.S. Treasuries and securitized-debt securities from a risk/reward perspective. We would also continue to add a small position in inflation-protected securities due to the recent rise in long-term rates and expectations for economic improvement. In addition, we would look to add shorter-duration investment-grade securities or ETFs as the risk of higher long-term rates (duration risk) outweighs the low coupons.

Stocks finished mixed in volatile trading on Thursday as investors assessed the likely timeline for Fed tapering and the uncertain impact of the Delta variant. Employment data was generally positive, as first-time unemployment benefit claims fell to 348,000, down from the prior week and below consensus. Continuing claims also fell from the prior week, to 2.820 million, but were slightly above the consensus forecast. On the earnings front, Macy's shares jumped nearly 20% after the company posted much better than expected 2Q results, reinstated its dividend, and raised its full-year guidance. The Dow fell 0.19%, the S&P rose 0.13%, and the Nasdaq rose 0.11%. Crude oil fell more than 2% to $64 per barrel, while gold fell slightly to $1783 per ounce.

Stocks rose on Thursday as investors looked past more signs of inflation in the government's May consumer price data. The Labor Department said that the CPI rose 5.0% year-over-year in May, up from 4.2% in April. The reading was above the Reuters consensus forecast of 4.7% and the sharpest annual increase since 2008. The core CPI, excluding food and energy, also rose 3.8% from the prior year. On the employment front, first-time jobless claims fell to a new pandemic era low of 376,000, down from the prior week but slightly above consensus. Continuing claims fell to 3.499 million, down from 3.757 million a week earlier and below the consensus forecast of 3.665 million. The Dow rose 0.06%, the S&P 0.47%, and the Nasdaq 0.78%. Crude oil rose slightly to $70 per barrel, while gold fell $6 to $1901 per ounce.

Stocks rose again on Monday morning, adding to Friday's gains, despite further increases in Treasury yields. Treasury Secretary Janet Yellen said that the passage of the administration's $1.9 trillion coronavirus relief package over the weekend would enable Americans to 'get to the other side of the pandemic' and help to drive a 'very strong' economic recovery. The Dow rose 1.2%, the S&P 0.9%, and the Nasdaq 0.6%. Crude oil traded near $65.50 per barrel, while gold fell $12 to $1687 per ounce.

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

The S&P 500 returned to its year-opening price on Wednesday, September 23, and finished the trading week less than 2% above that level, thanks to a surge on September 25. Despite the late-week gain, the index posted its fourth consecutive losing week. Simply due to mean reversion, the fifth week after four losers tends to be positive. In the 9/25 week, the index just about reached a 10% correction off its 9/2/20 high of 3,588. Do all these things point to the correction being 'over?' Not so fast.

The S&P 500 returned to its year-opening price on Wednesday, September 23, and finished the trading week less than 2% above that level, thanks to a surge on September 25. Despite the late-week gain, the index posted its fourth consecutive losing week. Simply due to mean reversion, the fifth week after four losers tends to be positive. In the 9/25 week, the index just about reached a 10% correction off its 9/2/20 high of 3,588. Do all these things point to the correction being 'over?' Not so fast.

Ultra-Low Expectations Entering 2Q20 Earnings Season

Ultra-Low Expectations Entering 2Q20 Earnings Season