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.

As stock prices continue to rise and the valuation band for stocks is stretched further, insider-sentiment data from Vickers Stock Research continues to show that corporate executives, directors, and beneficial owners are increasingly defensive. Is it time to run for exits? Likely no. But stock prices won't go up forever, so a sense of caution does seem to be warranted. And that is what insiders are clearly telling us.

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.

With many of the elite stocks technically overbought after huge moves in late 2023 and early 2024, we've done a search for stocks that might provide some 'alpha' if the red-hot AI stocks finally take a break. We examined how much the actual return of an investment might exceed its expected return based on its risk level. We asked our Certified Market Technician Mark Arbeter to study charts for technical signals that favor individual stocks and predict their alpha. Mark reported that it is difficult to find strong technical setups at this time. Still, he looked for stocks that have been beaten down but show evidence that the worst is over. Technical characteristics for these stocks include an existing intermediate- to long-term downtrend, capitulatory volume during weakness followed by an upside reversal, bullish daily and weekly momentum divergences, and (most importantly) signs that the stock is at least attempting to trace out a bottoming pattern. Mark looks for these bottom formations in certain trading patterns. Here's a list of Argus Research BUY-rated stocks that fit Mark's technical model, signally possibly upside ahead.

Weekly Tee Up: Bank Earnings and Housing

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.

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.

Many investors are getting a nice holiday present this December, as 2023 is closing out with a burst higher for stocks. The gains have been swift in the last month or so and are spread across sectors and market caps. Yet some companies have not joined in the party - and we think they may present opportunities. We used the Argus screening tool to generate a list of companies that have clean balance sheets and a proven track record for profits. We also like the management teams and strategies at these companies. For our list, we identified 11 BUY-rated large- or mega-cap companies across numerous industries that are selling at more than 25% below their 52-week highs. The list includes stocks in multiple sectors.

In this edition, oil spike optimism loses steam for now; Dexus investors poised to befit from patience; mRNA pipeline to boost Moderna; and XPO, Kinder Morgan, and Asana.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Black Friday. Cyber Monday. The retailers are out in force, with a massive marketing push to win dollars during this prime shopping time during the holidays. Just like retail, some stocks are seemingly at a big discount right now. Yes, we have our own Black Friday on Wall Street. But shop with care. We look for quality companies with solid books, proven track records, and strong management. This week, we used the Argus screening tool to create a list of companies that have clean balance sheets, high levels of profitability, and that we think are also undervalued and offer possible buying opportunities. We sorted the Argus stock universe for companies with a BUY rating, a market cap over $8 billion, and the highest financial strength ratings. Then we looked for those that are furthest away from their 52-week highs, and thus likely offering the deepest discounts. The resulting list is weighted towards Financial. That's not surprising based on the beating that the Financial sector took earlier this year after the collapse of Silicon Valley Bank. Here is our list of recommended Black Friday Stock Deals for November 2023.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

As of the close on September 11, the S&P 500 (SPX), the Nasdaq, and the Nasdaq 100 (QQQ) had all regained their 50-day averages. All three lost the 50-day in mid-August and again last week, so it is encouraging that these major indices are putting up a stand around the key average. At the same time, the three majors remain above their August lows and the pullback has turned into a sideways battle, with a lower high and a higher low in place.

Stocks edged higher on Tuesday morning as investors awaited earnings from Microsoft and Alphabet after the close. Consumer confidence data was stronger than expected. The Conference Board said that its consumer confidence index rose to 117.0 in July, up from 110.1 in June and above the Bloomberg consensus forecast of 112.0. The reading was the highest in two years. The Dow was flat, the S&P rose 0.1%, and the Nasdaq rose 0.3%. Crude oil traded near $79 per barrel, while gold fell slightly to $1961 per ounce.

Monday Tee Up: The Fed, Jobs, Earnings

For our list this week, we are focusing on the Healthcare Sector, which we rank as one of our favorites with an Over-Weight rating. Healthcare was an outperformer in 2022, falling only 4% while the S&P 500 dropped 19%, but has lagged in the early weeks of 2023. We think the recent relative weakness may offer a buying opportunity. Post-COVID, consumers are 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. Meanwhile, companies with experience in diagnostic testing, vaccines, and antiviral medicines, as well as suppliers of protective equipment and other hospital products, have benefited from efforts to contain the pandemic. The sector accounts for 14.7% of the S&P 500, and includes companies in the pharmaceuticals, medical devices, healthcare services, and insurance industries. Here's our list of Argus BUY-rated Healthcare stocks that are large-cap and have solid books. We sorted by the largest percentage from the 52-week high.

Our analysis of data that has been reported in recent weeks leads us to conclude that key parts of U.S. GDP are still expanding, despite the impact of inflation, the pandemic, and geopolitical developments. That said, growth is not consistent across all segments of the economy, and, in many cases, growth rates are slowing. The risk of recession is real -- but a U.S. recession is not a foregone conclusion. After reviewing the latest economic fundamentals, we have raised our 1Q23 GDP estimate to 0.2% from our prior forecast of -0.8%. We continue to look for the first quarter to start at a weak rate, but then for the economy to improve as the year goes on. Our estimate for the full year 2023 is now 1.6%, up from our prior forecast of 1.1%. The U.S. Federal Reserve is combating inflation with aggressive interest-rate hikes. Our preliminary forecast for GDP growth in 2024 remains 1.8%, as the Federal Reserve, with its tool chest once again full after hiking rates during 1H23, can contemplate lowering interest rates to recharge economic growth. Our GDP estimates generally are in the range of other forecasters. The Wall Street Journal Economic Survey calls for GDP growth of 0.2% in 2023 and 1.9% in 2024. The Federal Reserve is anticipating GDP growth of 0.5% for 2023 and 1.6% in 2024. Meanwhile, the IMF is calling for 2023 growth of 1.4%. The Philadelphia Federal Reserve's Survey of Professional Forecasters is calling for growth of 0.7% in 20232 and 1.8% in 2024. The GDPNow Forecast from the Federal Reserve Bank of Atlanta is 0.7% for 1Q23.

The line for new 52-week highs minus new 52-week lows on the NYSE ended its sharp downtrend in the later part of October, and recently broke above the 21-day exponential average. For the indicator, this reverses two sell signals (from December 2021 and January 2022). The prior buy signal occurred in June 2020, with an early buy signal in April when the line went flat.

In this edition, Fortune Brands remodels its business, capital allocations matter more, utilities stocks set to settle, and Nordstrom, Moderna, and Align Technology.

U.S. equities rose on Wednesday morning ahead of the CPI report on Thursday. Estimates are 6.4%-6.6%. The FAA computer outage caused airline stocks to fall in pre-market trading, but most have since recovered as flights resume. The Nasdaq is up 1.0%, the S&P is up 0.6%, the Dow Jones is up 0.3%. Crude oil is trading near $77 per barrel, while gold traded at $1877 per ounce.

Stocks slumped throughout 2022, as the S&P 500 entered a bear market in June and closed 19% lower for the year. Value stocks generally outperformed during the year, as the Dow Jones Industrial Average fell 9% while the Nasdaq Composite dropped 33%. The leading sectors were value-oriented, such as Energy, Utilities, Consumer Staples, and Financial Services. The average stock in the Argus Universe of Coverage declined 13% during the year, and the median stock declined 15%. The average BUY-rated stock dropped 11%, while the average HOLD-rated stock fell 17%. Will investors continue to favor value in 2023? Will high inflation drive continued outperformance in Energy?

The 10-year Treasury yield held an important area near 3.5% and, in the near term, is approaching another key level in the 3.7%-3.8% zone. This is the underside of the trendline off the December lows, as well as the location of the declining 50-day moving average. It is still possible yields are tracing out a larger head-and-shoulders (the first was very small), but need to take the neckline out at 3.5% to complete the pattern.

Tuesday, September 13, was an ugly day for stocks from start to finish, thanks to a hotter-than-expected August CPI report. With the nice four-day rally into the release of the numbers, and the market seemingly ignoring recent hawkish talk from the Fed, it appears the market was anticipating better inflation data.

Recent data illustrates to us that key parts of U.S. GDP are still expanding, but growth is not consistent across all segments of the economy. After two consecutive quarters of GDP contraction, the economy may be in a recession. Based on our review of the latest economic fundamentals, our forecast for GDP growth in 2022 is now 0.8%, up slightly from our prior forecast of 0.7%. Our preliminary forecast for 2023 remains 1.8%, assuming that economic trends start to recover later next year. Our current forecasts do not call for a recession, despite the negative 1H22 results. But they do call for below-trend GDP growth due largely to the impact of higher interest rates on the economy. The domestic employment environment is nearing full strength, although consumer confidence trends are mixed. Auto sales have recovered from pandemic lows, but at an uneven pace. The U.S. housing market has been a positive contributer to the economic recovery from the pandemic, but high prices are cooling the market. Businesses are expanding, but growth is slowing. Exports are under pressure from geopolitical tensions in Europe and the rising dollar. But import growth will not continue at the recent high-teens pace. And government spending trends should smooth out as well. Our estimates differ a bit from consensus. The Fed is anticipating GDP growth of 1.7% for 2022, while the IMF is calling for 2022 growth of 2.3%. The Philadelphia Federal Reserve's Survey of Professional Forecasters is estimating growth of 1.6% in 2022. The GDPNow forecast from the Federal Reserve Bank of Atlanta is 1.6% for 3Q22.

After hitting extreme levels early in the summer, sentiment has become more positive -- which is understandable considering the stock-price rally off mid-June lows. This is bullish in the short-term, as some of the sideline money comes back into the stock market. Speaking anecdotally, many professional market participants (at least the talking heads on the business channels) are still calling this a bear-market rally. These experts always have an opinion and love the shining lights. But we will wait until the weight of actual evidence points to a bear-market rally or a new bull 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 AbbVie Inc (ABBV); Monster Beverage Corp. (MNST); ASML Holding NV (ASML); Sempra Energy (SRE); Morgan Stanley (MS) and the Focus List deletions are Sysco Corp. (SYY); Lam Research Corp. (LRCX); Lazard Ltd. (LAZ); Moderna Inc (MRNA).

For a market technician (chartist), it is never a bad idea to look at longer-term (weekly, monthly) charts of the major indices. Indeed, you don't want to miss the forest for the trees. A four-hour chart is more important than a one-hour chart; a daily is more important than the four-hour; and the weekly is more important than the daily (and so on).

Economy & Jobs Fight Off Recession Risks

Our rating on the Healthcare sector is Over-Weight. 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. Meanwhile, companies with experience in diagnostic testing, vaccines, and antiviral medicines, as well as suppliers of protective equipment and other hospital products, should benefit from efforts to contain the pandemic. The sector accounts for 13.7% of the S&P 500, and includes companies in the pharmaceuticals, medical devices, healthcare services, and insurance industries. The sector is outperforming the market thus far in 2022, with a gain of 1.3% through early April, while the S&P 500 has declined 6%. The following are examples of how we use our analysts' Healthcare sector ideas in our Focus List and Model Portfolios. All stocks are rated BUY at Argus.

Stocks fell sharply on Thursday morning after talks between the Ukrainian and Russian foreign ministers failed to produce a cease-fire agreement or other progress in ending the war. The selloff was also driven by more signs of surging inflation. The Labor Department said that its consumer price index rose 7.9% year-over-year in February, up from 7.5% in January and in line with the consensus forecast. The reading was the strongest annual increase since 1982. The core CPI, excluding food and energy, also rose 6.4% on an annual basis in February, up from 6.0% growth in January. The Dow fell 1.2%, the S&P 1.4%, and the Nasdaq 2.1%. Crude oil traded near $110 per barrel, while gold rose $11 to $1999 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 more than 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 at Argus.

The IPO market remained hot in 4Q21, with 98 companies going public, bringing full-year activity to 428 newly listed companies. IPO activity increased 27% year-over-year in 4Q21, though activity was down 6% quarter-to-quarter. By the numbers, 98 operating companies raised funds through IPOs in 4Q21, compared with 77 in 4Q20 and 104 in 3Q21. Including SPACs, approximately 264 entities raised funds. Secondary offerings declined 22% year-over-year. Investor demand was strong for IPOs, and investors were often rewarded: the average non-SPAC IPO opened 16% above its offering price in 4Q21. Unicorns found conditions favorable, and many firms left the ranks of private ownership to move to the public markets. Demand for SPACs cooled a bit. Looking into 2022, we think the market for IPOs will remain strong. The IPO pipeline is in line with recent quarters, with about 125 companies having filed with the SEC (more than 425 including SPACs). In addition, there are still some promising blockbuster Unicorns in the pipeline. These companies have likely learned from previous Unicorns such as Uber and SmileDirectClub that they should be showing profit projections and offering fair voting and ownership policies during their (still virtual) road shows.

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 CVS Health Corp (CVS); Microsoft Corporation (MSFT); Moderna Inc (MRNA); McDonald`s Corp (MCD) and the Focus List deletions are Mckesson Corporation (MCK); HCA Healthcare Inc (HCA); KLA Corp. (KLAC); TJX Companies, Inc. (TJX).

It Was a Very Good Year: Our Monthly Survey of the Economy, Interest Rates, and Markets

For all the worries about inflation, supply chain, and a pandemic that did not take a single day off all year, 2021 was a very good stock year. The fact that the market was able to overcome some very real concerns is not that surprising, as Wall Street veterans believe the bull is at its most spry when it is climbing a wall of worry. And while the concerns were (and are) real, so too were (and are) the positives, including a reopening economy, growing earnings, and an increasingly inoculated populace.

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.

This edition features cement companies, grocery stores, and virtual banking.

We anticipate a rebound in economic growth in 4Q21 and into 2022. Recent data illustrates that the economy is still expanding, though some white-hot growth rates in certain sectors are starting to cool. The primary driver of GDP over the next few quarters is likely to be the country's physical health, as the nation recovers from the pandemic. Trends here have been more positive in recent weeks, as the fourth wave of the pandemic, due largely to the Delta variant of COVID-19, has seemingly passed its peak. The domestic employment environment is in better shape than it was a year ago, and consumer confidence trends are starting to stabilize. Auto sales have recovered from pandemic lows but growth has slowed due to supply chain issues. Businesses are again expanding. But the housing market has started to cool. Overall, our GDP model now calls for 7.2% increase in GDP in 4Q21. On an annual basis, we look for GDP growth of approximately 5.5% in 2021 and 3.8% in 2022. Our estimates are consistent with consensus forecasts and the outlook from the Federal Reserve, which call for growth of 4%-6% in 2021. The GDPNow Forecast from the Federal Reserve Bank of Atlanta is 6.6% for 4Q21.

The IPO market remained hot in 3Q21, with 102 companies going public -- the second-highest quarterly total in the past six years. IPO activity increased 19% year-over-year in 3Q21, though activity was down 20% quarter-to-quarter. Some 101 operating companies raised funds through IPOs in 3Q21, compared with 86 in 3Q20 and 125 last quarter. Including SPACs, approximately 195 entities raised funds. Secondary offerings declined 21% year-over-year. This was a difficult comparison against 3Q20, when many listed companies tapped the public markets to strengthen their balance sheets during the earlier stages of the pandemic. Investor demand was strong for IPOs, and investors were often rewarded: the average non-SPAC IPO opened 26% above its offering price in 3Q21. Unicorns found conditions favorable, and many firms left the ranks of private ownership to move to the public markets, while demand for SPACs cooled. The IPO pipeline is in line with recent quarters, with about 145 companies having filed with the SEC (more than 470 including SPACs). In addition, there are still some promising blockbuster Unicorns in the pipeline. These companies have likely learned from previous Unicorns that they should be showing profit projections and fair voting and ownership policies during their road shows.

Due to a difficult September, in which the S&P 500 fell 4.7%, 3Q21 was barely positive for stocks, with the major benchmark index increasing only 0.6%. The average stock in the Argus Universe of Coverage fell 1.7% during the quarter, and the median stock dropped 1.4%. The average BUY-rated stock slipped 0.9%, while the average HOLD-rated stock declined 3.7%. 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 their outperformance over time, and think this may be the one-in-five years that 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 thus more dependent on a strong U.S. economy. Small-cap valuations remain depressed, and this group looks to offer value into 2022.

Stocks rose on Friday morning, led by the Technology sector, though investors remained concerned about prospects for slower economic growth and the impact of the Delta variant. On the earnings front, Deere posted solid fiscal 3Q results and raised its full-year guidance, though the shares fell on concerns about rising costs and supply-chain issues. The Dow rose 0.6%, the S&P 0.6%, and the Nasdaq 0.7%. Crude oil traded near $63 per barrel, while gold rose $2 to $1785 per ounce.

Stocks rose on Friday morning, led by the Technology sector, though investors remained concerned about prospects for slower economic growth and the impact of the Delta variant. On the earnings front, Deere posted solid fiscal 3Q results and raised its full-year guidance, though the shares fell on concerns about rising costs and supply-chain issues. The Dow rose 0.6%, the S&P 0.6%, and the Nasdaq 0.7%. Crude oil traded near $63 per barrel, while gold rose $2 to $1785 per ounce.