As stocks keep trending higher, insiders continue to exercise restraint. While their defensive posture has stabilized (and indeed lessened a tad) over the past few weeks, it seems that corporate executives, directors and beneficial owners view overall stock valuations as likely extended. That attitude appears to be mirrored in the broader market. Investors are clearly willing to push share prices higher, but the selling days (when they do occur) tend to involve noticeable drops -- suggesting a readiness to withdraw quickly if (if) any bad news has legs. So far, though, that just hasn't been the case, with big down days turning out to be one-day wonders.

Small- and mid-cap stocks (SMID) have underperformed large-caps over the past 12 months, but may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from global events. As well, the prices of SMID stocks generally are lower than the prices of large-caps. As well, there are long stretches in the record books when SMID stocks have outperformed large-caps. That said, SMID stocks can be risky. The standard deviation for monthly returns was 5.7% for SMID stocks over a 2003-2021 test period, versus 4.3% for large-caps. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record.

The FOMC maintained the target range for the fed funds rate at 5.25 to 5.50%. The FOMC does not expect it will be appropriate to reduce the range until it has gained greater confidence that inflation is moving sustainably toward 2%. The FOMC will continue reducing its holdings of Treasury securities and agency debt and agency MBS, but said that the central bank will begin to slow its balance sheet runoff soon. Recent indicators suggest that the economy has been expanding solidly. Job gains have remained strong and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated.

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 fell on Thursday on hotter-than-expected inflation readings. In February, headline PPI rose 0.6%, up from 0.2% in January and ahead of the expected 0.3% increase -- with nearly two-thirds of the increase attributed to a rise in prices for final-demand goods. A 4.4% rise in energy prices during the month was the main factor in the increase in final-demand goods, contributing over one-third of the increase. PPI rose 0.4% in February, down from 0.6% last month but ahead of the expected 0.2% increase. U.S. retail sales in February were up 0.6%, following the 0.8% decline in January. The Dow fell 0.2%, the S&P 500 was down 0.3%, and the Nasdaq lost 0.1%. Crude oil traded above $81 per barrel, while gold fell $18 to $2162 per ounce.

West Texas Intermediate (WTI) crude oil closed at $79.60/barrel on Wednesday, as attempts to break to new rally highs above the $79/$80 region continue to be thwarted. However, the price action has been very tight over the past couple of weeks and crude looks like it is percolating under the surface. Oil is still working on a few higher highs and higher lows, but the rally since December 12 has been labored and, to our eye, does not look like an impulsive rally (which would imply a large move higher). This is the same type of action WTI saw back in May and June of 2023 before it took off, rallying from below $70 in early July to $95 by late September. To be confident in a big rally, any move over $80 should be somewhat steep and not just a slow crawl higher.

'Green Shoots' from the Fed

We are raising our long-term technical outlook to Bullish and most likely will raise the intermediate-term outlook to bullish if we ever get a pullback. With the benefit of hindsight, both timeframes should have been changed to bullish either in the middle of 2023 or late 2023. Yet for the most part, the daily commentary in parts of 2023 and 2024 conveyed bull-market action in market breadth, as well as breadth and price thrusts typically seen in early bull markets. Things got tricky in October 2023, when the S&P 500 broke many key averages as well as its bull-market trendline off the October 2022 lows. In addition, market breadth fell back to bear-market territory. At the same time, the entire yield curve was in a strong uptrend, hitting and exceeding 5%.

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.