The Federal Reserve's favorite inflation indicator, the PCE Price Index, will be released by the BEA today. The index differs from the better-known Consumer Price Index in that its composition is changed more frequently and is quicker to reflect the impact of real-time pricing fluctuations. In the most-recent report, from March, PCE inflation was reported at 4.2% (the latest CPI report, from April, had inflation at 4.9%). At Argus, we forecast a rate of 4.0% for April PCE. Core PCE, which removes volatile food and energy prices, was 4.6% in the latest month. We expect the Core PCE to dip to 4.5% this month. Inflation appears to have peaked last summer and is continuing to decline, though the rate of decline may slow in the months ahead. We track 21 inflation measures on a monthly basis. On average, they indicate that prices are rising at a 2.5% rate year-over-year, down from 2.8% a month ago and 8.7% nine months ago. The numbers are distorted a bit by a sharp decline in Producer Price Intermediate Goods, which are falling at a 19% rate. Focusing on core inflation (which we obtain by averaging Core CPI, market-based PCE Ex-Food & Energy, the core GDP PCE Price Index, the five-year forward inflation expectation rate and the 10-year TIPs Break-even Interest Rate), our reading is 4.0%, flat month-over-month. That's largely because, sticky prices at the other end of the spectrum, like shelter and transportation remain high (The Sticky Price Core CPI Index reading is currently 6.3%.) Looking ahead, investors are expecting that the Federal Reserve's series of rate hikes ultimately will tame inflation, with the three-year forward expectation rate now down to 2.9% and the five-year forward expectation rate at 2.35%.

Stocks were mostly higher on Thursday, though sector performance was mixed. Tech stocks soared, driven by the rally in Nvidia, and Communication Services, Industrials, and Real Estate rose modestly. However, these gains were tempered by declines in other sectors. Investors weighed reports of a possible debt ceiling agreement, along with new GDP and employment data. The Commerce Department, in its second estimate, said that the U.S. economy expanded at a 1.3% annualized rate in 1Q, up from its initial estimate of 1.1%, though down from 2.6% in 4Q. On the employment front, first-time claims for state unemployment benefits rose by 4,000 to a seasonally adjusted 229,000 for the week ended May 20, below the consensus forecast of 245,000. The Dow fell 0.11%, the S&P rose 0.88%, and the Nasdaq rose 1.71%. Crude oil traded near $72 per barrel, while gold fell to $1941 per ounce.

New Market Highs in 2023

Market sentiment remains tepid, at best, which is no surprise based on the yearlong neutral price action. There are hundreds of sentiment indicators, with more and more coming out each year. And there are big differences between these indicators -- making some more valuable than others. As we see it, market-type polls are the most numerous but certainly not the most valuable, as they reflect investor attitudes toward the overall market but not necessarily about actual positionings. Indicators that show what investors are doing with their money (positionings) are the most valuable, in our opinion.

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 (SPX) is struggling to break resistance in the 4,200 region (in hopes of getting back to the August 2022 highs and the key 61.8% retracement of the bear market just above 4,300). We keep coming back to the potential pattern off the October lows. Remember that developing patterns and formations mean absolutely nothing until they are completed and confirmed. So the grizzled chartist must never jump the gun, as failed patterns are just as important -- if not more important -- than completed chart formations.

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.

Earnings, Employment, Economy: Three Es Keeping Recession at Bay

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 Alcon Inc. (ALC); Ulta Beauty Inc (ULTA); Comcast Corp (CMCSA); ProLogis (PLD) and the Focus List deletions are AstraZeneca PLC (AZN); Omnicom Group, Inc. (OMC); Target Corp (TGT); Equinix Inc (EQIX).

We don't often see stock-market polls from fellow technicians, but invitees at an event celebrating the 50th anniversary of the Chartered Market Technicians Association in NYC were asked to forecast how the S&P 500 (SPX) would end the year. With the index drifting sideways for the past year, it's not surprising that a majority (55%) expected the index to remain range bound between 3,750 and 4,250 -- which is where we have been for most months going back to 2022. This is one of the basic tenets of technical analysis: the trend is your friend, until it isn't. It also is known as recency bias: what recently happened is expected to continue, as it is the freshest in the mind of most investors. The poll did tilt toward the bullish side, with 31% looking for a move on the SPX to above 4,500, while 11% were bearish.

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.

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.

Some of the strangest market-cap scenarios going back to 2018 come from the small-cap Russell 2000 (IWM) and the S&P 600 (SML) charts. Their performances have tracked each other since 2001. Data for the SML started at the end of 1994, while the IWM data started in May 2000.

Stocks fell sharply on Tuesday morning, led by declines in regional bank stocks. Treasury Secretary Janet Yellen warned that the U.S. government could run out of funding by June 1, earlier than previously expected, if Congress fails to raise the debt ceiling. Employment data pointed to a cooling labor market. In its monthly JOLTS survey, the Labor Department said that U.S. job openings dropped to 9.59 million on the last day of March, below the Reuters consensus forecast of 9.78 million and the third straight monthly decline. The Dow fell 1.6%, the S&P 1.6%, and the Nasdaq 1.4%. Crude oil traded near $72 per barrel, while gold jumped $26 to $2018 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.

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.

In our commentary on Wednesday, we noted that if the S&P 500 (SPX) lost initial support in the 4,070 area (which it subsequently did by a minor amount), the next cluster of support was down at 4,030. That is where the flat 50-day moving average sits, and is a minor 38.2% retracement of the rally off the March low.

The major indices were little changed on Friday morning, as gains in the Consumer Discretionary and Staples sectors were offset by declines in Financials, Energy, and Materials. On the earnings front, Procter & Gamble shares rose more than 3% after the company posted better-than-expected fiscal 3Q earnings, helped by price increases and strong sales of new products, and raised its full-year sales forecast. Hospital operator HCA Healthcare also rose 5% after reporting strong 1Q results and raising its sales and earnings guidance. The Dow fell 0.1%, the S&P fell 0.1% and the Nasdaq was flat. Crude oil rose to $78 per barrel, while gold dropped $31 to $1988 per ounce.