Stocks rose on Thursday, as a very encouraging advance estimate of fourth quarter U.S. GDP was more than enough to offset initial gloom brought on when Tesla disappointed investors with earnings news. The Dow Jones Industrial Average was up 0.6%, the S&P 500 was higher by 0.5%, and the Nasdaq inched up by 0.2%. So far this week, the S&P 500 is up 1.1%, the Dow is up 0.5%, and the Nasdaq is higher by 1.3%. Personal Consumption Expenditures for December will be reported this morning, offering new clues as to likely action (or non-action) from the Fed at the next policy meeting. In the most-recent report, through November, PCE inflation was reported at 2.6% (the latest CPI report, through December, had inflation at 3.4%). Core PCE, which removes volatile food and energy prices, was 3.2% in the latest month, down from 3.4% in the prior month. Our forecasts call for 2.7% for the headline number and 3.0% for the core.

Dividend income is often overlooked amid gyrations in the stock market. But dividends are an important element of return. Dividend income accounted for 42% of the total return of the S&P 500 between 1930 and 2012, according to Hartford Funds. And that's just the average. In some of those decades, dividends accounted for more than 50% of total returns and even 100% of returns. More recently, dividends have accounted for a smaller portion of returns, at around 15%-20%. Not all dividends are created equal, though, and it is important to understand the difference between the two main categories: high-yield stocks and dividend-growth stocks. High-yield stocks typically have dividends that pay out in the 5%-8% range. Though the income appears attractive, the share prices of high-yield stocks may be at risk. Dividend-growth stocks typically have lower yields, often in the 1.0%-2.5% range. But the lower-yielding dividends are not likely to be a huge component of cash flow, leaving management teams with other value-additive options for deploying cash. Further, while the yields are not as high, management teams may be more likely to boost the payouts over time, as earnings grow.

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.

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.

Stocks were mostly lower on Wednesday morning amid mixed earnings reports from major companies and new housing market data. The Commerce Department said that U.S. new home sales rose 12.3% to a seasonally adjusted annualized rate of 759,000 units in September, well above the Reuters consensus forecast of 680,000. On the earnings front, Alphabet posted above-consensus 3Q results, though the shares dropped 9% on concerns about weakness in the company's cloud business. On the positive side, Microsoft shares rose 3% after the company reported strong fiscal 1Q sales and earnings, helped by growth in cloud computing. The Dow rose 0.2%, the S&P fell 0.8%, and the Nasdaq dropped 1.5%. Crude oil fell slightly to $83.50 per barrel, while gold traded near $1987 per ounce.

The country's biggest banks kick off earnings season this week. For sure, this sector has suffered this year following the failure of Silicon Valley Bank and the downward spiral that followed. The KRE (S&P Regional Bank Index) is down 29% year-to-date versus a rise of 12% for the S&P 500. We see opportunity here and have an Over-Weight rating on the sector. We believe the worst is over after the March/April bank failures and that the risk associated with these failures has been factored into share-price valuations. In the earnings reports that start flowing on Friday, we'll be focused on updates in the following areas: loan growth, where we expect growth to have slowed to low single-digits as higher interest rates weigh on consumers and businesses; loan loss provisions, where we see the gauge moving higher as net charge-offs trend toward normal; commercial real estate, where higher interest rates and new post-pandemic social, work, and shopping behaviors magnify the exposure of banks to commercial real estate, and; investment banking, where we are starting to see recovery in M&A and IPO activity. Yes, banks have challenges. Overall, we feel the banks are on solid footing and that valuations at current levels are attractive. Here's a list of our favored banks, broken down by niche.

A review of the charts for the 500 stocks in the S&P 500 (SPX) may well leave one feeling a tad queasy. It is not a universally pretty sight -- which is a bit disconcerting as the major indices are holding near recovery highs. The small-cap stocks remain in a stagnant pool -- and if it weren't for the fact that the indices are market-cap weighted, the overall stock market outlook might be very different.

Since the S&P 500's (SPX) closing recovery peak on July 31, and the closing peaks for the Nasdaq and Nasdaq 100 on July 18 and 19, respectively, every attempted rally has been met with selling. For the month of August, the indices consistently have failed at either the declining 10-day exponential average (EMA) or 21-day EMA. This week, all three rallied to the underside of their 50-day averages -- and the sellers emerged. The lesson? Support during an uptrend becomes resistance in a downtrend.

Economy and Earnings Send Mixed Signals

The U.S. Dollar Index has traced out a false breakdown and put an end to the rally in silver. Meanwhile, crude oil (WTI) is quietly rallying, popping 2.4% on Monday and finishing at $78.90/barrel. That is the highest close for WTI since April 19. More importantly, at least for a day, crude has busted a downward-sloping channel that has been in place since last October. Is this the end of WTI's bear market? It's probably a bit early to make that call, as we would like to see a higher high (above the April high of $83.26) to be more confident. WTI also closed above its 200-day average for the first time since August.

Dividend income is often overlooked amid gyrations in the stock market. Thus far in 2023, market bulls are boasting about first-half S&P 500 returns that may top 15%. No one is very focused on the broad market index's 1.6% current yield. But dividends are an important element of return. Dividend income accounted for 42% of the total return of the S&P 500 between 1930 and 2012, according to Hartford Funds. And that's just the average. In some of those decades, dividends accounted for more than 50% of total returns and even 100% of returns. More recently, dividends have accounted for a smaller portion of returns, at around 15%-20%. In 2018, dividend payments softened the blow when most market indices declined as the Fed hiked rates. The pattern was repeated in 2022. Not all dividends are created equal, though, and it is important to understand the difference between the two main categories: high-yield stocks and dividend-growth stocks.

Dividend growth is among our most important themes for 2023, and stretches across industries. We think companies that raise their dividends consistently at a double-digit rate are sending off three important signals amid the recent market volatility: 1) the company's balance sheet is strong enough to pay a dividend; 2) management is clearly focused on providing shareholder returns; and 3) management is confident enough in the near-term outlook to raise the payout aggressively. This third factor is especially important during periods of economic weakness and an outright earnings recession. Here are stocks that meet our double-digit dividend test and are on the Argus BUY List. They are also holdings in our Dividend Growth Separately Managed Account and in the Dividend Growers Total Return Trust, sponsored by SmartTrust.

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.

Our list this week identifies companies that received an Argus target-price increase in April. As the stock prices of these companies approached their target prices, Argus analysts saw those prices going even higher. We are in the thick of earnings season and our analysts are scouring quarterly reports to evaluate how the companies they follow are doing. With economists busy analyzing economic data to determine whether the economy might slip into recession, companies have been attending to their businesses. Some are weathering current economic conditions better than others. The economic pressures are real - including rising interest rates, inflation, the strong dollar, and wavering consumer spending patterns. These stressors are on top of normal competitive pressures, as companies fight to sell their products and services, outmaneuver peers, and make profits. Looking back at April, our analysts found companies where the business outlook is solid - and went through the mechanics of our valuation framework to adjust target prices upwards. Our framework includes analysis of historical multiples, peer multiples, and future dividends and cash flows. Here are the stocks on which we raised target prices in April. All are rated BUY at Argus.

As of this writing, a massive week for tech stocks and the overall market is underway, with earnings reports from GOOGL, MSFT, META, AMZN, TXN, KLAC, NOW, SPOT, KO, PEP, MCD, WHR, UPS, MRK, CAT, CMG, BA,V, MA, FSLR, XOM, and GE. It likely will be the largest market-cap week of the EPS season.

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 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.

Stocks wavered on Friday morning following new inflation data and earnings reports from Intel and American Express, but have turned positive as of this writing. The Commerce Department said that its personal consumption expenditures price index - the Fed's preferred measure of inflation - rose 5.0% from the prior year in December, slowing from 5.5% growth in November and continuing a recent downward trend. Excluding volatile food and energy costs, the core PCE rose 4.4% from the prior year, down from 4.7% in November and in line with the consensus estimate. Intel shares fell about 8% after the chipmaker posted disappointing 4Q results and offered weak guidance for the current first quarter. American Express jumped 12% despite below-consensus earnings, as investors focused on management's strong full-year guidance.

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.

Stocks rallied on Friday morning as investors looked past weak 3Q results and disappointing guidance from Amazon. Energy shares rose, as both Exxon and Chevron reported much stronger-than-expected earnings. On the housing front, the National Association of Realtors said that its pending home sales index fell 10.2% to 79.5 in September. The Reuters consensus forecast had called for a smaller decline of 5.0%. The Dow rose 1.6%, the S&P 1.3%, and the Nasdaq 1.4%. Crude oil fell 1% to $88 per barrel, while gold traded near $1645 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 innovative U.S. economy.

As of the close on July 25, the major indices were sitting at key short-term spots -- either at recent breakout areas or just above. The S&P 500 fell back to its breakout area near 3,950 and was just above its 50-day average. The Nasdaq was slightly above its breakout at 11,700 and a few hundred points above its 50-day. The QQQs were above the breakout point at 297; the S&P MidCap 400 was very close to breakout; and the Russell 2000 had pulled right back to key short-term chart support.

Market Slumps as Earnings Roll On

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, even during the pandemic, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as vaccines) and services and moving into new markets and applications, the domestic economy would not be growing, and capital would not be flooding into the country. Consider that U.S. GDP was approximately $1 trillion in 1930 but was more than $24 trillion at the end of 2021. That's growth of 24-times. Meanwhile, the U.S. population has grown less than three-times during that time span, to 320 million from 120 million. The delta between GDP growth and population growth has been driven, in large part, by innovation.

Stocks rose strongly on Friday morning, led by the Technology and Communication Services sectors, after recovering from sharp early losses. But there were more signs of accelerating inflation. The Commerce Department said that its personal consumption expenditures index rose 5.8% from the prior year in December, up from 5.7% growth in November and in line with the Bloomberg consensus forecast. The Dow rose 0.5%, the S&P 1.2%, and the Nasdaq 2.0%. Crude oil rose more than 1% to $88 per barrel, while gold traded near $1786 per ounce.

This edition features European banks; California utilities; traditional payment firms; and notes from Johnson & Johnson, Green Thumb Industries, and new coverage Lithium Americas.

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.

Stocks rose strongly on Thursday as investors weighed new GDP and employment data along with 3Q earnings reports from a range of major companies. The Commerce Department said that 3Q GDP rose just 2.0%, down from 6.7% in 2Q and below the Reuters consensus of 2.7%. First-time unemployment claims fell to a new pandemic-era low of 281,000, down from 291,000 a week earlier and below the consensus forecast of 288,000. Continuing claims dropped to 2.243 million from 2.480 million a week earlier, and were also below consensus. The Dow rose 0.68%, the S&P 0.98%, and the Nasdaq 1.39%. Crude oil rose to $83 per barrel, while gold rose slightly to $1800 per ounce.

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, even during the pandemic, has expanded to record levels. If U.S. corporations weren't innovating, the domestic economy would not be growing and capital would not be flooding into the country. Consider that U.S. GDP was approximately $1 trillion in 1930 but nearly $23 trillion at the end of 1H21. That's growth of 23-times. Meanwhile, the U.S. population has grown less than three-times during that time span, to 320 million from 120 million. The delta between GDP growth and population growth has been driven, in large part, by innovation. In addition, the value of listed corporations on U.S. stock exchanges at the end of 2020 was approximately $41 trillion, according to SIFMA, representing 38% of global equity market capitalization, while U.S. GDP represented only 26% of global GDP. The current low level of interest rates and the relatively high level of the dollar both attest to the confidence that global investors have in the innovative U.S. economy.

Cash is no longer king for point-of-sale transactions, with only 12% market share compared to 38% for credit cards, 29% for debit cards, and 10% for the fast-growing digital wallet sector. We see a long secular road for growth, as digital payments are in the early stages of transition. Factors driving this trend include U.S. banks and the Federal Reserve encouraging digital over paper money; the pandemic, which has accelerated contactless payments as a safety step; and greater merchant acceptance for small dollar amounts. Importantly, the emerging generations (Millennials and Gen Z) embrace both mobile banking and digital payments. Forecasts call for digital-payment transaction value to grow at an 11% compound annual rate for the next five years and to reach $11 trillion from the 2020 level of $5.4 trillion. Several companies in the Argus Research fundamental universe of coverage are in position to take advantage of this opportunity. Each of the following stocks is rated BUY at Argus.

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.

Stocks rose on Thursday morning, a day after the Federal Reserve signaled that it would wait for further economic recovery before paring back its $120 billion per month bond-buying program. The Commerce Department reported that the U.S. economy expanded at a 6.5% annualized rate in 2Q, up from 6.3% in 1Q, but well below the Bloomberg consensus forecast of 8.4%. The Dow rose 0.5%, the S&P 0.5%, and the Nasdaq 0.4%. Crude oil rose 1% to $73 per barrel, while gold traded near $1829 per ounce.

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.

First-Quarter Review and Full-Year 2021 Outlook

The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles, to a large degree - have moved overseas, where costs are lower. Yet the U.S. economy, prior to the pandemic, had expanded to record levels. And now, the U.S. Healthcare industry is mobilizing to improve COVID-19 testing, treatments and vaccines. Consider that U.S. GDP was approximately $1 trillion in 1930 but nearly $22 trillion at the end of 2019. That's growth of 22-times. Meanwhile, the U.S. population has grown less than 3-times during that time span, to 320 million from 120 million. The delta between GDP growth and population growth has been driven in large part by innovation. In addition, the value of listed corporations on U.S. stock exchanges at the end of 2020 was approximately $32 trillion, representing 41% of global equity market capitalization, while U.S. GDP represented only 25% of global GDP. The current low level of interest rates (the benchmark 10-year Treasury bond yield is 1.1%) and the relatively high level of the dollar both attest to the confidence that global investors have in the innovative U.S. economy.

A few weeks ago, we talked about the potential for a major U.S. Dollar Index (USD) bottom based on a number of technical factors. The greenback was close to major long-term chart support, the COT data (absolute and adjusted for open interest) was very favorable for the dollar, and the COT data for the euro (58% of the USD) was very unfavorable. Sentiment toward the dollar was also very poor while sentiment toward the euro was very bullish. Since then, the USD has bounced 2.3% -- so we have a start.

January ended with a fizzle, as stocks recorded their worst month since October and the S&P 500 registered a loss for the month. In a month that featured the incursion at the Capitol Building and a heavily policed inauguration, few predicted that the key market driver would be a retail chain that a few hedge funds (to their misfortune) perceived to be on its last legs.