This edition features digital adversiting and regulatory risk; our quarterly telecom outlook; new coverage of backup power leader Generac; and notes from Continental, Goldman Sachs, and Boston Beer.

Market breadth improved in the second half of August as the small- and mid-cap stocks joined large-cap stocks to the upside. However, the small- and mid-caps did not see any follow through, have backed off since September 2, and have weakened breadth once again.

Back on August 26, we said it might be time to keep an eye on interest rates. So far, we're not wrong. But we aren't right either. Since late August, the 10-year hasn't done much, rising from 1.34% to 1.37%. The intraday high on Tuesday was 1.385%, just slightly above the peaks on August 12 and 26. Needless to say, a push above yesterday's high could get yields moving to the upside.

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.

West Texas Intermediate (WTI) broke key chart support at $65 last Thursday and fell to a corrective low of $62 on Friday, one of our targets and the lowest level since May. It's possible that oil was in a three-wave ABC decline with the A and B waves completed. If wave C equals wave A, the pattern would target the $62 region. This week, WTI has been very strong, popping to $67.75 on Tuesday or 9% in two days. It looks like crude has completed a false breakdown, which makes it very likely that the correction is over.

The VIX Volatility Index had been averaging in the mid-teens for five straight years before spiking to an average of 29 in 2020. And, of course, that average masked the worst readings of last year – as high as 85 in March as the U.S. economy shut down at the onset of the pandemic. The VIX has been slowly pushing back toward those mid-teens readings, enduring speed bumps such as a recession, a divisive presidential election, inflation fears, a series of pandemic waves, and the spread of new coronavirus variants. Indeed, last week, the VIX index jumped 20% on inflation and Delta variant concerns, and the DJIA dropped almost 400 points. While stocks are almost 20% higher for the year, investors are cautioned to remain alert: Since 1920, the S&P 500 has recorded a 5% pullback three times a year on average and a 10% correction once every year and a half. On our S&P 500 valuation model, stocks are currently priced for perfection. In this environment, we continue to recommend that investors focus on high-quality stocks with strong balance sheets and experienced management teams.

This edition features new and updated coverage of First Republic Bank and Morgan Stanley; the runway for Australia/New Zealand airlines; and notes from Pilgrims Pride, Aviva, and Disney.

The 10-year Treasury yield broke lower in early July, and fell to 1.13% on August 4. The move lower represents a 50% retracement of the move from August 2020 until March 2021. Yet yields could not take out resistance from the 50-week moving average, which is a bearish sign. Over the past four days, yields have popped up to 1.34% and completed a small double-bottom in the process.

Numerous sentiment indicators continue to reflect extreme optimism, and the investors represented in those indicators have been rewarded for their correct assessment of market direction. As always happens, there will come day when the bullish views will have been held too long and some of the robust gains will be recalled. But for now, the bulls remain firmly in charge.

Stocks kept momentum going in July and August. Our analysts have been progressing through earnings season and have come across many stocks that have approached target prices. We set targets through our valuation framework, which includes analysis of historical multiples, peer multiples, and future dividends and cash flows. After adjusting for the latest information, here are some of the stocks on which we raised target prices over the past month. All of the following stocks are rated BUY at Argus.

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.

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 edition features electrical suppliers and the fight against greenhouse gases; more talk of tapering; Amazon's earnings; and notes from Tesla, Starbucks, and Pinterest.