Ever so quietly, commodity prices are starting to percolate and, impressively, this action is occurring with a rising U.S. Dollar Index (USD). What would be happening if the USD was in a downtrend or reversing lower? We might be back in the 1970s, which was not a pretty time for the stock market, inflation, and interest rates.

We are one session away from making it 17 out of 19 weeks in which stocks have moved to the upside. We've been throwing grenades at this move for a while, based on overbought and divergent momentum readings and excessive sentiment readings -- and it just does not matter. Yes, price is the final arbiter!

Stock indices dipped in October 2023, with the S&P 500 falling a sharp 10% off summer highs. Looking at 13F filings of big institutional portfolios, we see that the big guns were busy last quarter taking advantage of that dip. Citadel Advisors went on a buying spree, adding to its $100 billion portfolio across a range of sectors. As did D.E. Shaw, adding to its $67 billion portfolio. Vickers Stock Research, a subsidiary of Argus Research Group, analyzes insider trading and institutional stock ownership. Form 13-Fs, which institutions must file to report their holdings, are due 45 days after the end of calendar quarters and have come in for 4Q24. We review 13Fs of major activists to determine core holdings and new purchases. Activist investing is now less about generating a short-term return and more about achieving long-term returns through an active management/investor partnership. Based on data from Vickers, here are some recent new purchases and key holdings of activist investors, as well as other high-profile money managers.

What goes up in a straight line sometimes comes down in a straight line. Tuesday was a nasty day for stocks, but it could have been much worse if not for a late-day rip higher. The S&P 500 (SPX) was down 102 points or 2% at 3:20 pm, but rallied over 30 points to finish down 1.4%. The Nasdaq fell 1.8%, the Nasdaq 100 dropped 1.6%, the S&P MidCap 400 gave back 2.4%, and the Russell 2000 collapsed 4%.

U.S. stocks declined on Monday morning while Treasury yields climbed, as investors digested comments from Chairman Powell over the weekend and new economic data. The Institute for Supply Management's survey rose to 53.5% from 50.5% in December, but was above the consensus of 52%. The S&P Global US Services PMI for January was revised to 52.5 from a preliminary 52.9. Crude prices edged lower. The S&P 500 fell 0.6%, the Dow 1.0% and the Nasdaq was down 0.7%. Crude oil traded near $72 per barrel and gold fell $18 to $2035 per ounce.

The iShares 20+ Year Treasury Bond (TLT) hit a recovery high of $100.53 on December 27, entering an area of thick chart resistance at $100+. So far, we have seen a minor pullback to $97, which is a key technical point as it was former chart support and also is where the 21-day exponential (EMA) sits. Daily momentum cycled into overbought territory in December and has traced out two bearish divergences, while the momentum uptrend has broken. Trendline support off the secondary low on November 13 also has been taken out. To get things going on the downside, $95.50, or the location of more chart support and the 200-day, has to be broken. That would open the door for a possible decline to the $89-$93 area, which is a 61.8%-38.2% retracement of the recent rally. The U.S. Commodity Futures Trading Commission's COT data has improved and is bullish, while sentiment for the two-, five-, and 10-year Treasurys remains bearish.

In 2023, the S&P 500 climbed almost 24%, skewed heavily by a handful of tech and consumer stocks that recovered from the pandemic. The top-10 stocks in the Argus Universe advanced, on average, 180%, while the top-20 rose 140%. The average stock rose 17%, and the median stock advanced 7%. The average BUY-rated stock increased 20%, while the average HOLD-rated stock gained 8%. Will investors continue to favor growth in 2024? Will small-caps reverse their recent thrust as the risk of recession puts a premium on clean balance sheets? Investors seeking value are encouraged to focus on dividends and yields in the 3%-4% range. As for small-caps and international stocks, valuations remain depressed -- and these group looks to offer value into 2024 as market breadth likely widens. Below are the top-10 performers from the Argus Universe last year, with representatives in six of the 11 major sectors, as well as the bottom-five performers.

With the S&P 500 and the Nasdaq challenging their July highs, and the Nasdaq 100 close to its all-time highs from late 2021, sentiment data is reflecting extreme readings of optimism. If this is the next leg of the bull market, it doesn't matter. But if we are entering another bear market or are still in one from an individual stock perspective, then it does matter. Confusing? Yes. Hard to interpret? Not so much. We been watching sentiment for a very long time, and it can takes years to figure out and, more importantly, to accept.

Since the market bottomed on October 27, Technology sector stocks have bolted higher, lifting the mega-cap S&P 500 (SPX), Nasdaq, and Nasdaq 100 (QQQ) to impressive gains. The SPX is up over 7%, while the Nasdaq and the QQQs have popped by 9% in the past 10 days. Important resistance at 4,400 was breached slightly on Friday, with the S&P 500 finishing the week at 4,415. That just happens to be an exact 61.8% retracement of the recent pullback. The decline also was a 61.8% retracement of the March to July rally. The index broke its downward-trending channel last week, as did the Nasdaq and the QQQs. For the SPX, the next area of chart resistance is 4,500 -- which is a 78.6% take-back of the decline.

Stocks rose on Monday morning, led by the Communication Services and Financial sectors, as investors awaited the Fed's next interest rate decision and the October employment report later this week. On the earnings front, McDonald's shares rose after the company posted stronger-than-expected third-quarter sales and earnings. The Dow rose 1.0%, the S&P 0.6%, and the Nasdaq 0.7%. Crude oil fell sharply to $82.50 per barrel while gold rose $12 to trade near $2010 per ounce.

Investing in the Cloud is not for the faint of heart -- but we see upside. Alphabet lost a steep 10% in one day last week after investors expressed their disappointment over growth in its cloud business. That same day, Microsoft surged after reporting better-than-expected growth in its Azure OpenAI cloud service. The race is on, and some will win and some will lose along the way. But the potential pie is big. In the internet era, in which digital commerce complements or has supplanted physical commerce, the information technology needs of all enterprises have grown. The traditional on-premises approach has been rendered inefficient, given that a user's IT needs may fluctuate at any time. Into this void, the Cloud has arrived. In Cloud services models, an enterprise's IT needs can be matched and scaled in real time. Through the Cloud, enterprises consume only as much computing, storage, and networking bandwidth as they need. For a major event, this allows massive scaling of IT resources beyond the restraints of on-premises implementation. For periods in which operations are steady, the Cloud services model allows for a needs-only application. The leading providers of Cloud services tend to be large Technology and Communication Services companies that provide many goods and services distinct from or adjacent to their Cloud businesses. Growth has been impressive for this group. Collectively, participants in the Cloud eco-system grew revenue at a 19% compound annual growth rate from 2016 to 2022. Still, the line isn't straight up. While Cloud services grew at a 23% growth rate from 2020 to 2021, the average growth rate slowed to 15.3% for 2022. This slowdown in revenue growth reflected impediments to normal business activity from the supply-chain crisis, inflation, and rising interest rates. Even so, demand for Cloud services has held up relatively well, given that Cloud transition is a long-tailed process and that Cloud transformation has become an imperative. Here is a list of U.S.-based companies followed by Argus and that we think are in position to take advantage of this secular trend.

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.

The S&P 500 (SPX) bounced off its 50-week average on Monday morning and mounted a nice rally. A prominent hedge-fund manager was said to have unwound his short bond position, so yields fell, aiding stocks until about 1:00 pm. But, once again, the sellers reemerged, erasing all of the SPX gains. This is the second straight close below the 200-day average for the index, but is still not a breakdown as the drop below is by less than 1%. The index did hold the 4,200 area, so chart support remains intact, albeit barely.

In this edition, a look at specialty contractors; renewable energy growth still outpacing expectations; digital ads and ad-tech stocks rebound; and Okta, Arm Holdings, and Regions Financial.

We're sorry to sound like a broken record, but Monday was yet another day with poor market breadth. The major indices masked the weakness under the hood, with the S&P 500 (SPX) finishing the first trading day of October flat, the Nasdaq gaining 0.7%, and the Nasdaq 100 popping 0.8%. The two SPX sectors that rose on the day were Technology (XLK +0.8%) and Communication Services (XLC +0.6%).

The growth prospects for the artificial intelligence (AI) universe are impressive, yet hard to determine. Argus has derived a model of the size and scope of the global AI industry, based on our coverage of the major publicly-traded players and most of the mid-tier players, along with our industry analysts' knowledge of private players. We estimate the global AI industry amounted to about $90-$100 billion in 2021, and expect it to grow at a 40% CAGR through 2030, when it is expected to reach $1.8 trillion in annual revenue. We expect annual growth to decelerate from the low- to mid-40% range in immediate years to the mid-30% range for years toward the end of the survey period. But determining a realistic estimate for the size of the industry is a challenge. Even for an industry that promises to redefine measuring tools, there is no measurable unit of AI output comparable to barrels of oil or tons of steel. As well, much of AI development occurs within labs and at universities, and the output is measured in tangible progress against objectives, not dollars or units of output. In the corporate world, nearly all the AI pure-play companies service micro-niches, have little measurable revenue, and are deeply unprofitable. For our list this week, we take a big picture view of three areas where AI applications are developing. In Big Tech, we believe much of the revenue and most of the profitability from AI is attributable to several giant U.S. and a few international companies that operate primarily in growth sectors such as Technology, Communication Services, and Consumer Discretionary. Next, we note that China is also a hub of AI development, with companies like Alibaba, Baidu, and Tencent (though Argus follows only Alibaba). Finally, Niche Tech has significant AI activity among companies pursuing advances in IoT, vehicle electrification, autonomous driving, automation and connectivity solutions for manufacturing, warehousing, construction, and other areas. Here are featured companies followed by Argus in those three categories.

When looking at insider-sentiment data from Vickers Stock Research over the past few weeks, the significant talking point has been Vickers' one-week sell/buy ratio for stocks that trade on the Nasdaq. While Vickers' other indicators generally were in keeping with historical standards during earnings season, the sell/buy ratio for the Nasdaq bearishly skyrocketed three weeks ago to 13.20 (on a scale where a reading above 2.50 is bearish). Last week, the ratio improved significantly, but at 7.51 was still uncomfortably high. This week, the ratio is 6.68 and again has improved but again has more wood to chop. But the trend is positive -- and that trend, along with other sentiment barometers that are of little concern, has resulted in a stabilization in overall insider sentiment.

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.

We read two statements over the weekend that say it all. First up was this. "Positive earnings surprises of this magnitude are rarely seen when you enter a recession." That compared to this. "Forecasted probability of recession at levels only seen during recessions." Yes, these are confusing times.

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 is at its largest point in history and still growing. If U.S. corporations weren't innovating, creating new products and services, and moving into new markets and applications, the domestic economy would be contracting, not expanding, and capital would not be flooding into the country. Particularly at this juncture of the market and economic cycles, when uncertainty is high due to high inflation and rising interest rates, we look to innovative companies to successfully navigate the challenges. At Argus, an 88-year-old independent research firm that has innovated a time or two in its long history, we have focused on four types of innovative companies: Industry Disruptors; First to Market; New Product Specialists; and Product & Process Perfectors. Here are some examples of companies, featured in our Innovation Theme Model Portfolio.

Stocks rose modestly on Friday morning, extending Thursday's rally. Exxon shares rose after the company reported strong 1Q earnings that topped the consensus forecast, though sales were down from the prior year. Chevron also posted strong earnings, helped by growth in its refining business. Amazon shares fell, despite strong first-quarter results, on concerns about slowing growth in the company's cloud business. The Dow rose 0.5%, the S&P 0.5%, and the Nasdaq 0.2%. Crude oil rose more than 2% to $76.50 per barrel, while gold traded near $1999 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 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.

The current advance by the large-cap indices has occurred because of some very nice gains in the mega-cap stocks, that within the context of an overall neutral-to-poor period of market breadth. Over the past six months (since the start of October) as well as year-to-date, the leaderboard is littered with mega-caps, mostly from the Technology sector. At the same time, the Nasdaq 100 advance-decline line has improved -- but remains range bound. Interestingly, we heard the same complaint in the late 1990s -- which was a pretty good time for the QQQs and the S&P 500.

In 1Q23, stocks continued to recover from the bear-market lows of 2022, with the S&P 500 rising 7% for the quarter. Performance was led by last year's laggard sectors, including Communication Services and Technology. Last year's top-performing sector, Energy, was the worst in 1Q23. Financial Services, including banks, were not far ahead. The average stock in the Argus Universe of Coverage rose 4% in the quarter; the median stock advanced 2%. The average BUY-rated stock rose 5.4% and the average HOLD-rated stock gained 3.4%. Recently, we raised our sector rating on Technology to Over-Weight, and expect outperformance into 2Q -- especially if interest rates head lower. We also raised our rating on Financial Services, and the bottom five stocks in our list point to potential value opportunities.

The stock market held up again last week, despite additional bearish news about the global banking system. This time, Europe imploded (after already having booked a nasty decline). Indeed, once contagion starts, it generally does not stop on a dime -- but rather continues down an increasingly negative path.

Vickers Stock Research, a subsidiary of The Argus Research Group, tracks and analyzes insider trading and institutional stock ownership trends. Form 13-Fs, which institutions must file to report their holdings, are due 45 days after the end of calendar quarters, and have now come in for 4Q22. We like to review the 13Fs of the major activist investors, including Carl Icahn, Trian Fund Management, Jana Partners, and ValueAct Holdings, among others, in order to determine their core holdings and new purchases. 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. Activists have made progress in the past quarter with high-profile investments into blue-chip companies such as Walt Disney and Salesforce. Based on data from Vickers, here are some recent new purchases and key holdings of activist investors, as well as other high-profile money managers such as Warren Buffet of Berkshire Hathaway and Ken Griffin of Citadel Advisors LLC.

Stocks extended their Fed-driven rally on Thursday, led by strong gains in the Communication Services, Consumer Discretionary, and Technology sectors. Meta Platforms jumped 23%, despite disappointing 4Q earnings, as investors focused on the company's better-than-expected revenue, cost-cutting efforts, and new share buyback plan. On the employment front, first-time claims for state unemployment benefits fell by 3,000 to 183,000 for the week ended January 28, below the Reuters consensus forecast of 200,000. The data came ahead of the government's January employment report on Friday morning. The consensus estimate calls for 185,000 new payroll jobs, down from 223,000 in December, and an unemployment rate of 3.6%, up from 3.5% a month earlier. The Dow fell 0.11%, the S&P rose 1.47%, and the Nasdaq soared 3.25%. Crude oil traded near $76 per barrel, while gold fell $16 to $1927 per ounce.

Stocks rose slightly on Thursday after the Consumer Price Index for December rose 6.5% in prices year-over-year but fell 0.1% sequentially, which was in line with expectations. Initial jobless claims fell by 1,000 to a seasonally adjusted 205,000 last week. Employers added 223,000 jobs in December. Industries trading higher included airlines, construction & engineering and energy. American Airlines rose more than 9% after reporting preliminary 4Q estimates that were considerably higher than expected. The Nasdaq closed up 0.6%, the S&P 0.3%, and the Dow Jones closed up 0.6%. Crude oil is trading above $78 per barrel, while gold rose $16 to $1895 per ounce.

Monday Tee Up: The Fed, Jobs, Earnings Roll On

Stocks recovered from early losses on Thursday, rallying strongly despite disappointing inflation data. The 6.6% increase in the core consumer price index, excluding food and energy, marked a 40-year high and set the stage for another 75-basis-point rate hike at the Fed's next meeting. On the employment front, first-time claims for state unemployment benefits rose by 9,000 to 228,000 for the week ended October 8, slightly above the Reuters consensus estimate. The Dow rose 2.83%, the S&P 2.60%, and the Nasdaq 2.23%. Crude oil rose more than 2% to $89 per barrel, while gold fell $4 to $1673 per ounce.

Vickers Stock Research, a subsidiary of Argus Research Group, tracks and analyzes trends in insider trading and institutional ownership. Form 13Fs are due 45 days after the end of calendar quarters and have now come in from 2Q22. We like to review the 13Fs of the major activist investors, including Carl Icahn, Trian Fund Management, Jana Partners, and ValueAct Holdings, among others, in order to determine their core holdings and new purchases. 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 Vickers.

Monday Tee-Up: No Summer Doldrums on Wall Street

Stocks plunged on Friday morning on further signs of accelerating inflation and concerns about the Fed's response. In a widely anticipated release, the Labor Department said that consumer prices rose at an 8.6% annual rate in May, up from 8.3% growth in April and above the consensus forecast of 8.3%. The reading was the highest in more than 40 years. The core CPI, excluding food and energy, rose 6.0% from the prior year, above the consensus of 5.9% growth. The Dow fell 2.1%, the S&P 2.5%, and the Nasdaq 3.1%. Crude oil fell to $121 per barrel, while gold traded near $1851 per ounce.

In this edition, advertisers give Meta a like, we look at the power behind European utilities, and we follow the thread of re-selling in retail fashion; and James Hardie, Applied Materials, and Daifuku.

Yikes. It looked like it could be a very bad start to May, but a mid-afternoon rally on Monday (led by Communication Services, Energy, and Technology) saved the stock market. Talk about a great save -- and just as time was running out, with the major indices below their corrective and bear-market lows. Let's take a step back.

The stock market opens Monday looking for a fresh start in May and any crumbs of positive news. The big event of the week is on Wednesday when the Federal Reserve announces its next monetary policy move. Most economists see that move as a 50-basis-point rate hike. Over the weekend, Berkshire Hathaway reported earnings and hosted its annual meeting with famed CEO Warren Buffett. More big earnings and economic reports are coming this week, including the jobs report for April. More than 1,600 public companies will report on their last quarter. The range and number of companies will give more data points on how different sectors are weathering the many external factors out there pressuring valuations, including - the war in Ukraine, inflation, and rising interest rates. The stock market carnage in April was swift, decisive, and severe. The Nasdaq now has lost all gains since 2008. The Dow and S&P are at their lowest levels since March 2020. In April, the Dow Jones Industrial average dropped -4.9%, the S&P 500 fell -8.8%, with the Nasdaq Composite again hit hardest losing -13%. Year-to-date the Dow is down -9.3%, the S&P 500 is further in correction territory, off -13.3%, and the Nasdaq is in bear territory, down -21.2%. Breaking down the sectors, only two of the eleven broad S&P categories are in the green for 2022. Here are the results so far year-to-date: Basic Materials -6%, Energy +35%, Healthcare -8%, Industrials -10%, Consumer Staples +0.7%, Utilities -0.5%, Financials -12%, Communication Services -26%, Information Technology -19%, Real Estate -10%, Consumer Discretionary -21%. It's been a rough start to 2022.

Stocks plunged on Thursday amid weak earnings and disappointing guidance from Facebook owner Meta Platforms, which warned of increased competition and a substantial revenue hit from Apple's new advertising tracking policy. FB shares fell more than 26%. On the employment front, first-time jobless claims fell to 238,000 for the week ended January 29, down from 261,000 a week earlier and below the consensus forecast of 245,000. Continuing claims fell to 1.628 million, down from the prior week but slightly above consensus. The Dow fell 1.45%, the S&P 2.44%, and the Nasdaq 3.74%. Crude oil traded near $90 per barrel, while gold rose $2 to $1806 per ounce.

We are raising our intermediate-term technical outlook to neutral from bearish. The market has come roaring back after a week of panic and indiscriminate selling. While we were disappointed with market breadth on Friday, it was strong on Monday. The S&P 500 rose another 1.9%, for a two-day spike of 4.4%, the biggest two-day gain since April 2020 when we were coming out of the pandemic low. The Nasdaq spiked 3.4% for a two-day surge of 6.6%, while the Nasdaq 100 (QQQ) has screamed higher by 6.4% on a two-day basis. These are the biggest returns for both indices since November of 2020.

In 2021, several major corporations announced that they were splitting into pieces, and we don't think the dismantling of conglomerates has run its course. Last year, industrial icon General Electric decided to split into three companies, with one focused on Aerospace, one on Healthcare, and one on Power/Energy. Pharmaceutical titan Johnson & Johnson also announced it is planning to carve off its consumer division and focus just on drugs and devices. These companies, which took generations to build, have abruptly concluded that their best growth opportunities exist for them as smaller, more-nimble, and more-focused companies. Former conglomerate United Technologies blazed this trail in 2020. UTX, now Raytheon Technologies, or RTX, is now three listed firms, with focuses on Aerospace, HVAC and Elevators. This split-up has most favored the HVAC company Carrier Global Holdings Corp. (CARR), which has risen more than 200%. The other businesses are only slightly trailing the broad market. We think investors can benefit from these transactions if they look closely at the resulting companies and focus on the balance sheet, management, and earnings transparency. Companies that potentially fit this theme for 2022 include the following.

While stocks have fallen since the start of 2022, current insider sentiment remains reassuringly benign. Indeed, the overall Insider Index from Vickers Stock Research is resting at its most-attractive level since November 2020. As expected now that earnings season is in full swing, insider trading volume has dropped from recent robust levels, with only 856 insider transactions meeting the criteria this week for inclusion in Vickers' Weekly Insider Report.

The stock market moved higher last week during the busiest days of earnings season. Tech stocks far outperformed blue chips, though a portion of the outperformance was attributable to Tesla, as its stock is included in the S&P 500 and Nasdaq Composite, but not the DJIA. During Friday's session, the Dow Jones Industrial Average increased 89 points, or 0.25%. The S&P 500 was up 0.19%, and the Nasdaq Composite was up 0.33%. For the week, the DJIA was up 143 points, or 0.40%, the S&P 500 was up 1.33%, and the Nasdaq Composite was up 2.70%. For the YTD, the DJIA is up 17.03%, the S&P 500 is up 22.61%, and the Nasdaq Composite is up 20.25%.

This edition features the U.S. gas market; the recovering airline industry; new coverage of equipment rental firms; and notes from Meta Platforms (better known as Facebook), Apple, and Amazon.

What happened to the September sell-off? A month ago, the S&P 500 was in the process of falling off all-time highs (ATHs) set early in September. From the ATH of 4,537 on 9/2/21, the '500' fell to the 4,350s on 9/21/21; staged what would be a failed rally to just under 4,450 on 9/24/21; and then made twin lows right around 4,300 on 9/30/21 and 10/4/21.

The stock market performed well last week despite opening Monday on a bad note. Blue chips outperformed tech stocks by a slim margin during a week that featured FOMC commentary. During Friday's session, the Dow Jones Industrial Average increased 33 points, or 0.10%. The S&P 500 was up 0.15%, and the Nasdaq Composite was down 0.03%. For the week, the DJIA was up 213 points, or 0.62%, the S&P 500 was up 0.51%, and the Nasdaq Composite was up 0.02%. Year-to-date, the DJIA is up 13.69%, the S&P 500 is up 18.62%, and the Nasdaq Composite is up 16.75%.

This edition features digital adversiting and regulatory risk; our quarterly telecom outlook; new coverage of backup power leader Generac; and notes from Continental, Goldman Sachs, and Boston Beer.

The stock market was flat to down last week as positive earnings surprises proved to be baked-in. Tech stocks modestly underperformed blue chips. During Friday's session, the Dow Jones Industrial Average fell 149 points, or 0.42%. The S&P 500 was down 0.54%, and the Nasdaq Composite was down 0.71%. For the week, the DJIA was down 126 points, or 0.36%, the S&P 500 was down 0.37%, and the Nasdaq Composite was down 1.11%. Year-to-date, the DJIA is up 14.14%, the S&P 500 is up 17.02%, and the Nasdaq Composite is up 13.85%.

This edition features opportunities in electric vehicles; our quarterly market outlook; an examination of ViacomCBS' streaming capabilities; and updates on Facebook, Tesla, and Darden.

Investors have enjoyed a bouyant first half, but should note that the markets are entering the poorest performing quarter of the year. By our calculations, 3Q performance has been underwhelming compared to 1Q, 2Q, and 4Q returns. We analyzed data collected on S&P 500 performance from 1980-2018. The strongest quarter has been 4Q, which has generated average gains of 4.4%. 1Q and 2Q returns have averaged 2.1% and 3.2%, respectively. On the other hand, 3Q is barely positive, with an average return of 0.5%. Not every 3Q is a disaster. In fact, the "win percentage" for the quarter is 63%; this means that markets deliver positive returns in the quarter more than three-fifths of the time. But the actual quarters that are negative can really hurt: -12% in 1981, - 15% in 1990, - 15% in 2000, - 18% in 2001, -14% in 2008 and -14% in 2011. Some of the events that occurred in these quarters are random: the September 11 attacks in 2001; the Lehman bankruptcy in 2008; and the S&P U.S. Treasury downgrade in 2011. But 3Q is also when companies start to know if they are going to meet their estimates for the year. As well, the Federal Reserve can be active. We think the current fundamentals are positive for stocks as 3Q21 begins, but will be watching closely for emerging risks, especially after the 8.1% return for stocks in 2Q19.