Small- and mid-cap stocks (SMID stocks) soared in 2019. They have underperformed large-caps over the past 12 months, but still may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be poised to rebound more quickly once COVID-19 vaccines are more widely distributed and the domestic service economy recovers. As well, the prices of SMID stocks generally are lower than the prices of large-caps. That said, SMID stocks can be risky. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. Investors used to use a $2 billion market-cap threshold to define a small-cap stock and a $10 billion threshold for a mid-cap. The Russell 2000 index now includes numerous companies with market capitalizations above $15 billion. For our purposes, we use a threshold of $20 billion to define a SMID stock.

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.

This edition features potential healthcare policy changes; a quarterly housing outlook; Costco's pricey shares; and notes from DocuSign, Wells Fargo, and new coverage Rocket Cos.

Market breadth has improved a bit since mid-August, as the percentage of stocks in the S&P 500 above their 50-day average has increased to 68% from 56%. It certainly would be preferable if this percentage continued to rise. The percentage above their 200-day is now 82% from a recent 76%, and is a very strong reading.

This edition features our second-quarter outlook on China; California's labor ruling; COVID-19 vaccine approval; and notes from Salesforce, First Solar, and GM.

Although we've said this before, it might be time to keep an eye on interest rates. The 10-year Treasury yield broke lower in early July, and fell to 1.13% on August 4, hitting the low of 1.13% from July 20. The recent yield lows represented a 50% retracement of the move from August until March. Yields stopped right at the 50-week moving average, a bearish sign. After the 8/4 bottom, yields popped right to support from the declining 50-day average at 1.38%. Yields then pulled back to 1.22% and reversed higher back to the 1.34% region, or right where the 50-day is again.

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.

The stock market was mixed last week, as the market weighed pessimism from consumers and coronavirus news in generally quiet trading. Blue chips outperformed tech stocks. During Friday's session, the Dow Jones Industrial Average increased 16 points, or 0.04%. The S&P 500 was up 0.16%, and the Nasdaq Composite was up 0.04%. For the week, the DJIA was up 307 points, or 0.87%, the S&P 500 was up 0.71%, and the Nasdaq Composite was down 0.09%. Year-to-date, the DJIA is up 16.04%, the S&P 500 is up 18.95%, and the Nasdaq Composite is up 15.01%.

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 were largely flat on Monday morning as investors weighed positive employment data along with the impact of rising Delta variant cases. The Labor Department's JOLTS report said that U.S. job openings rose by 590,000 to 10.1 million on the last day of June, above the consensus forecast of 9.28 million. Hiring also rose to 6.7 million in June from 6.0 million in May. The data came after a strong July employment report on Friday morning. The Dow fell 0.2%, the S&P fell 0.1%, and the Nasdaq rose 0.1%. Crude oil fell more than 3% to $66 per barrel, while gold dropped $28 to $1735 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.

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 new and updated coverage of Coinbase and Bath & Body Works; Biden's executive order on electric vehicles; and notes from Beyond Meat, WPP, and Kellogg.

The overall volume of insider transactions remains light due to trading restrictions in place during earnings season, but there are some interesting trends in the current data from Vickers Stock Research. And those trends are positive.