Stock markets were down on Tuesday morning ahead of the next read on inflation due out Wednesday morning via CPI and the unofficial start of earnings season, with big banks J.P. Morgan Chase, Wells Fargo, and Citigroup reporting. The Dow was down 0.3% and the S&P 500 fell .2%, while and the Nasdaq lost 0.04%. Crude oil traded just above $85 per barrel and gold rose $13 to $2364 per ounce.

Management's ability to "raise guidance" can often be a catalyst for market-beating returns in the quarters ahead. The fourth-quarter earnings season has crossed the 95% mark and is wrapping up, with blended earnings (actual results and the consensus for those still to report) showing a year-over-year gain of almost 10%, according to Refinitiv. That is considerably better than the 4%-7% advance expected at the start of the earnings period. Leading the outperformance were strong gains in Communication Services earnings, up 53%. On the flipside, Energy (like last quarter) is performing the worst, down 22%. Our analysts are always on the lookout for companies that boost their outlooks during earnings season. Here is an initial list of BUY-rated companies in Argus' Fundamental Universe of Coverage at which management raised guidance or increased its outlook during the 4Q23 EPS reporting season.

Insiders continue to pursue a reverse version of capitulation, refusing to acquire stocks because many others have done exactly that. Indeed, while asset managers who shunned stocks in 2023 are scrambling at year-end to infuse their portfolios with winners, insiders, who called market pivots convincingly all year, have taken to the sidelines during the year-end rally. Importantly, though, the lack of interest from executives, directors, and beneficial owners still has not moved beyond the 'ho hum' phase. So while the short-term (one-week) insider-sentiment indicators from Vickers Stock Research are bearish for a third week, the degree of bearishness is nowhere near the levels needed to drag the broader (eight-week) sentiment indicators to readings that cause concern. Current insider sentiment suggests that stocks may be a tad 'over their skis,' but are not likely to crash on landing.

Insiders continue to pursue a reverse version of capitulation, refusing to acquire stocks because many others have done exactly that. Indeed, while asset managers who shunned stocks in 2023 are scrambling at year-end to infuse their portfolios with winners, insiders, who called market pivots convincingly all year, have taken to the sidelines during the year-end rally. Importantly, though, the lack of interest from executives, directors, and beneficial owners still has not moved beyond the 'ho hum' phase. So while the short-term (one-week) insider-sentiment indicators from Vickers Stock Research are bearish for a third week, the degree of bearishness is nowhere near the levels needed to drag the broader (eight-week) sentiment indicators to readings that cause concern. Current insider sentiment suggests that stocks may be a tad 'over their skis,' but are not likely to crash on landing.

Over the past month, we have detailed an unflinchingly neutral stance from corporate executives, directors, and beneficial owners. During that time, the S&P 500 has fallen from around 4530 to 4288 at the close last week. The good news was that insiders did not panic and start selling shares in the declining market. The bad news is that those same insiders apparently didn't find value, and were not buying into the declining market (which is what we'd hope to see). But this week, insider-sentiment data from Vickers Stock Research offers a pivot.

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.

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.

U.S. equities were up following the lower-than-expected inflation data. The U.S. PCE declined sequentially in May to 0.1% and at an annualized rate of 3.8%. The Core PCE price index was up 0.3% for the month and 4.6% year-over-year in May, dipping from 4.7% in April. The decline in inflation is ongoing, but has slowed. Spending rose 0.1% for the month, below the 0.2% estimate and down from the 0.6% increase in April. Personal income rose 0.4%, ahead of the 0.3% estimate. The Dow rose 0.6%, the S&P 500 1.0%, and the Nasdaq 1.4%. Crude oil rose to just above $70 per barrel while gold traded near $1923 per ounce.

The first-quarter earnings season is wrapping up, with blended earnings (actual results and the consensus for those still to report) showing a 0.6% year-over-year decline, according to Refinitiv. That is considerably better than the 5.0% decline expected at the start of the earnings period, though still not enough to avoid a technical earnings recession following 4Q's 3.4% decline. Propelling the 1Q outperformance was a 74% beat rate (versus the long-term average of 62%), with strong gains in Consumer Discretionary (+55%) and Industrials (+26%), but drags from Basic Materials and Utilities (both -22%). Our analysts are always on the lookout for companies that boost their outlooks during earnings season. Management's ability to "raise guidance" can often be a catalyst for market-beating returns in the quarters ahead. Here is an initial list of BUY-rated companies in Argus Coverage for which management has raised guidance or increased its outlook during the 1Q23 EPS reporting season.

Economy Chugging but Possibly Slowing as Earnings Season Approaches

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.

There are two main points we can make about current market breadth. Yes, it has improved. But no, it is not signaling enough strength to project that the bear market is over and that a new bull market is emerging. There has been a smattering of NYSE breadth thrusts over the past seven months, but nothing consistent. December has featured several very weak breadth days, both from declining issues and volume.

In this edition, U.S. Infrastructure Spending Boosts CRH, Auto Maintenance Is Far From Worn-Out, Which Is Welcome News for Bapcor, Spotify's Good Spot, and Paychex, Nike, and Workday

In September, stocks continued their 2022 path lower and remain in a bear market. Bond prices slumped as well and, as with stocks, remain lower year-to-date. Looking ahead, our Stock-Bond Barometer model modestly favors bonds over stocks for long-term portfolios. In other words, these asset classes should be near their target weights in diversified portfolios, with a slight tilt toward fixed income. We are now balanced on large- and small-caps. We favor large-caps for growth exposure and financial strength, while small-caps are selling at historical discounts relative to large-caps and offer value. Our recommended exposure to small- and mid-caps is now 15%-17% of equity allocation, in line with the benchmark weighting. U.S. stocks have outperformed global stocks over the trailing one- and five-year periods. We expect this long-term trend to continue, given volatile and difficult-to-predict global economic, political, geopolitical, and currency conditions. That said, international stocks offer favorable near-term valuations, and we target 5%-10% of equity exposure to the group. Value has taken the performance lead in 2022 due to the negative impact of rising interest rates on growth valuations. Over the longer term, we anticipate that growth, led by the Tech and Healthcare sectors, will top returns from value, led by the Energy and Materials sectors, due to favorable secular and demographic trends.

Stocks were mixed on Friday morning following new inflation data that pointed to continued aggressive Fed rate hikes. The Commerce Department reported that its personal consumption expenditures price index - the Fed's preferred measure of inflation - rose 0.3% in August after declining 0.1% in July, though the year-over-year increase did tick down to 6.2% from 6.4%. The core PCE, excluding food and energy, rose 0.6% after a flat reading in July. It also rose 4.9% on a year-over-year basis, up from 4.7% a month earlier. The Dow fell 0.1%, the S&P rose 0.2%, and the Nasdaq rose 0.6%. Crude oil fell slightly to $81 per barrel, while gold traded near $1681 per ounce.

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.

Investors desperate to see the signs of capitulation that might mark a bottom got favorable news in June -- as stocks got drubbed once again. One sign of capitulation is when favored stocks and sectors get hammered, and we certainly saw that in June. The most-notable stock market trend in June was in the formerly can-do-no-wrong Energy group. As of the end of May, the sector was up over 60% year to date. As of the end of June, that gain had been cut to 32%. Gasoline prices remain elevated, and demand is strong as summer driving season heats up. So why the selloff? Recession has replaced inflation as the most-feared nominalization on Wall Street. If the economy turns negative, currently robust demand for gasoline might, pardon the pun, tank. No surprise that the second-worst sector in June was also in the commodities space. Materials stocks are now down 15% year-to-date, in line with the broad market decline but after being down just 3% as of the end of May. Utilities, which was the only other sector to be positive as of May, also fell harder than the market in June, signaling that investors can run in this market but they cannot hide. In the small-consolation department, traditional growth sectors -- meaning Consumer Discretionary, Technology, and Communication Services -- did slightly better than the market in June. Still, the growth complex is at the bottom of the sector rankings in 2022, after being in the lead for most of the past decade.

Market Tries to Rally amid Softening Data

Market Tries to Rally amid Softening Data

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.

Market Seeks Footing amid Interest Rate Turbulence

Since 1980, stocks have turned in positive performances almost 85% of the time. The average annual gain has been 13%. In 2021, results were better than average. As we look to 2022, we see a market that is likely to generate more-normal returns. There are several positive factors: interest rates are low, GDP is expected to continue rebounding, and earnings are poised to grow at a double-digit rate. But some challenging, or negative, factors are present as well. Stocks are no longer priced at a discount to fair value, so the market will be more dependent on earnings than on higher valuation multiples for returns; coronavirus cases continue to rise in the U.S., with new strains emerging around the world; and stocks tend to struggle during the second year of the presidential cycle. In all, our economic, earnings, and valuation models support a forecast for another positive year for stocks, but with gains below the recent three-year average of 23%. We expect to see earnings grow 10%, after a 45% increase in 2021; that interest rates will remain at historically low levels, even as the Federal Reserve removes more of the support it has been providing the economy during the pandemic; and that valuations will hold steady. Our target price for the S&P 500 is 5200, or about 10% above current levels.

Our End-of-Year Letter

Over the weekend, the House of Representatives approved the largest public works bill since the 1950s. The bipartisan trillion-dollar bill, which was passed by the Senate in August, now goes to President Biden's desk for signing. The plan focuses on improving the country's infrastructure, from roads and bridges to water systems and electricity grids. It also targets the auto industry, with a focus on electric vehicles and charging stations. In the power sector, Biden's goal is to achieve a carbon-free power industry by 2035. To improve energy efficiency in buildings, he is looking to retrofit four million buildings in the four years. Elsewhere, business Services companies also stand to benefit; bond issuance should pick up given that the infrastructure spending plan will be financed at least in part by bonds; and payroll companies could get a boost processing more paychecks as the infrastructure plan creates "millions of good paying jobs." All-in-all, some of the companies that we think may benefit include the following.

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.

This edition features sportswear in the pandemic; SPACs and investment banks; seatmaker Adient; and notes from Merck and new coverage GDS Holdings and Paychex.

Stocks fell sharply in a volatile session on Thursday, ending 3Q with their worst quarterly performance since the start of the pandemic. Congress passed a short-term spending bill to avert a government shutdown, but prospects for the Biden administration's infrastructure and budget plans remained highly uncertain amid Republican opposition and continued conflict between Democratic moderates and progressives. Treasury Secretary Janet Yellen again urged Congress to raise the debt ceiling, stating that a default would cause 'irreparable' harm and 'certainly a recession.' The Dow fell 1.59%, the S&P 1.19%, and the Nasdaq 0.44%. Crude oil rose to $75 per barrel, while gold rose $35 to $1758 per ounce.

The Technology sector started slowly in 2021 as investors focused on value stocks. But the sector has come on strong in recent months (up 22% year-to-date) and now is outperforming the market (up 20.7%) as well as value sectors such as Consumer Staples (+8%), Utilities (+10%), Materials (+17%), and Industrials (+18%). The sector is the largest in the U.S. market and now accounts for more than 28% of the S&P 500. Over the long term, we expect the sector to benefit from pervasive digitization across the economy, greater acceptance of transformative technologies, and the development of the Internet of Things (IoT). Healthy company and sector fundamentals are also positive. For individual companies, these include high cash levels, low debt, and broad international business exposure. We have an Over-Weight ranking on the Tech sector and think investors should look to allocate up to 30% of their diversified portfolios to the group. Here is how we use our analysts' Tech sector ideas in our Focus List and Model Portfolios.

The stock market rallied last week, as blue chips recouped losses that incurred during Fed commentary two weeks prior. Tech stocks performed well, but blue chips did better. During Friday's session, the Dow Jones Industrial Average increased 237 points, or 0.69%. The S&P 500 was up 0.33%, and the Nasdaq Composite was down 0.06%. For the week, the DJIA was up 1144 points, or 3.44%, the S&P 500 was up 2.74%, and the Nasdaq Composite was down 2.35%. Year-to-date, the DJIA is up 12.51%, the S&P 500 is up 13.97%, and the Nasdaq Composite is up 11.42%.

Stocks kept the momentum going in April, and are now up almost 12%, including dividends, in the year-to-date. Our analysts have been progressing through earnings season, and have come across many stocks in coverage that have approached target prices. We set target prices through our valuation framework, which includes analysis of historical multiples, peer multiples, future dividends, and cash flows. After adjusting the models for the latest earnings and dividend information -- most of which has been good -- here are some of the stocks on which we have raised target prices over the past month. All stocks are rated BUY at Argus.

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.

The S&P 500 rallied in March to finish with a 4.2% gain, but it was not straightforward. The ongoing sector shift helped keep investors in the blue chip equity market even as they were ditching last year's stalwarts. Fan-favorite Amazon, for instance, is down 3% year-to-date, while Tesla is down 6%. Long-neglected Energy and Financial Services stocks are out in front, with first-quarter sector gains of 33% and 14%, respectively. Growth-centric sectors Consumer Discretionary and Technology showed late-March strength, however, and are each up about 5% year-to-date.

President Joe Biden is preparing to announce an infrastructure-rebuilding plan that he estimates will create up to 10 million clean energy jobs. The following areas of the economy stand to benefit from the government spending, which could total as much as $4 trillion. The first element of the plan is improving the country's infrastructure, from roads and bridges to water systems and electricity grids.

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

The stock market rose last week, finishing an eventful year on a positive note. Stocks moved sideways for much of the shortened week before rallying during the final two hours of trading on Thursday. During Thursday's session, The Dow Jones Industrial Average rose 197 points, or 0.65%. The S&P 500 was up 0.64%, and the Nasdaq Composite increased 0.14%. For the week, the DJIA rose 1.35%, the S&P 500 1.43%, and the Nasdaq Composite 0.65%. For the full year, the DJIA rose 7.25%, the S&P 14.6%, and the Nasdaq 43.64%.

The Technology sector has led the market recovery from the COVID-19 depths of March 2020. Through November 20, the sector was up 31% for the year, compared to a 10% gain for the S&P 500. The Tech sector is the largest in the U.S. market and now accounts for more than 27% of the S&P 500. Over the long term, we expect the Tech sector to benefit from pervasive digitization across the economy, greater acceptance of transformative technologies, and the development of the Internet of Things (IoT): Healthy company and sector fundamentals are also positive. For individual companies, these include high cash levels, low debt, and broad international business exposure. We have an Over-Weight ranking on the Tech sector and think investors should look to allocate up to 30% of their diversified portfolios to the group. Here is how we use our Tech sector ideas from our analysts in our Focus List and Model Portfolios.

The Importance of Dividends

The Importance of Dividends

Stocks fluctuated on Tuesday morning following mixed earnings from major banks JPMorgan Chase, Citigroup, and Wells Fargo. JPM shares rose after the company posted above-consensus EPS, despite a sharp decline from last year, while Wells Fargo fell 6% after a greater-than-expected 2Q loss. Delta Air Lines shares also fell after a wider-than-projected loss and a 94% drop in second-quarter passenger revenue. The Dow rose 0.8%, the S&P rose 0.2%, and the Nasdaq fell 0.3%. Crude oil traded near $40 per barrel, while gold fell $4 to $1810 per ounce.

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

The Technology sector has led the market recovery from the COVID-19 depths of late March. Through April 30, the sector was flat for the year, compared to a 10% decline for the S&P 500. The sector is the largest in the U.S. market and now accounts for almost 26% of the S&P 500. Over the long term, we expect the Tech sector to benefit from pervasive digitization across the economy, greater acceptance of transformative technologies, and the development of the Internet of Things (IoT). Healthy company and sector fundamentals are also positive. For individual companies, these include high cash levels, low debt, and broad international business exposure. We have an Over-Weight rating on the Tech sector and think investors should look to allocate up to 30% of their diversified portfolios to the group. Here is how we use our analysts' Tech sector ideas in our Focus List and Model Portfolios.

The Technology sector has led the market recovery from the COVID-19 depths of late March. Through April 30, the sector was flat for the year, compared to a 10% decline for the S&P 500. The sector is the largest in the U.S. market and now accounts for almost 26% of the S&P 500. Over the long term, we expect the Tech sector to benefit from pervasive digitization across the economy, greater acceptance of transformative technologies, and the development of the Internet of Things (IoT). Healthy company and sector fundamentals are also positive. For individual companies, these include high cash levels, low debt, and broad international business exposure. We have an Over-Weight rating on the Tech sector and think investors should look to allocate up to 30% of their diversified portfolios to the group. Here is how we use our analysts' Tech sector ideas in our Focus List and Model Portfolios.

Growth stocks may be outperforming value, again, in 2020. But in an environment of historically low interest rates (and with the coronavirus and economic shutdown seemingly poised to keep them low for a long time), many investors are still searching for high levels of income, which can often be found in value stocks. When we look for attractive high-yield/value stocks at Argus, we look for low valuations on metrics such as price/earnings, price/sales, price/book, yield and price/cash flow. But we also look for companies with clean balance sheets, high levels of profitability, cash-flow generation, and an experienced management teams. We seek to avoid companies in industries that are in secular decline, or with dividend yields that are so high that the payout is clearly at risk. To us, right now, that level is 8%-9%-plus. That said, many value companies may face a substantial near-term industry problem. Based on numerous requests from clients, we have designed a portfolio of companies followed by Argus Research analysts that are BUY-rated on a long-term (five-year) basis, have a Financial Strength rating of at least Medium, and have a yield of 3.5% or higher.

Growth stocks may be outperforming value, again, in 2020. But in an environment of historically low interest rates (and with the coronavirus and economic shutdown seemingly poised to keep them low for a long time), many investors are still searching for high levels of income, which can often be found in value stocks. When we look for attractive high-yield/value stocks at Argus, we look for low valuations on metrics such as price/earnings, price/sales, price/book, yield and price/cash flow. But we also look for companies with clean balance sheets, high levels of profitability, cash-flow generation, and an experienced management teams. We seek to avoid companies in industries that are in secular decline, or with dividend yields that are so high that the payout is clearly at risk. To us, right now, that level is 8%-9%-plus. That said, many value companies may face a substantial near-term industry problem. Based on numerous requests from clients, we have designed a portfolio of companies followed by Argus Research analysts that are BUY-rated on a long-term (five-year) basis, have a Financial Strength rating of at least Medium, and have a yield of 3.5% or higher.

Growth stocks may be outperforming value, again, in 2020. But in an environment of historically low interest rates (and with the coronavirus and economic shutdown seemingly poised to keep them low for a long time), many investors are still searching for high levels of income, which can often be found in value stocks. When we look for attractive high-yield/value stocks at Argus, we look for low valuations on metrics such as price/earnings, price/sales, price/book, yield and price/cash flow. But we also look for companies with clean balance sheets, high levels of profitability, cash-flow generation, and an experienced management teams. We seek to avoid companies in industries that are in secular decline, or with dividend yields that are so high that the payout is clearly at risk. To us, right now, that level is 8%-9%-plus. That said, many value companies may face a substantial near-term industry problem. Based on numerous requests from clients, we have designed a portfolio of companies followed by Argus Research analysts that are BUY-rated on a long-term (five-year) basis, have a Financial Strength rating of at least Medium, and have a yield of 3.5% or higher.