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.

Last week was a wild affair, as major stock indices saw multiple reversals. After Friday's surge, the S&P 500 actually made a very marginal (less than 1 point) all-time high, though many other indices are still in short-term downtrends.

Stocks erased morning losses to close higher on Thursday. The energy sector was the worst performer and tech shares also lagged. On the employment front, the Labor Department said that first-time claims for state unemployment benefits fell to 684,000 for the week ended March 20, down from 781,000 a week earlier and below the Bloomberg consensus forecast of 730,000. This was the lowest number since before the pandemic. The GDP increased at an annual rate of 4.3% according to the third estimate, up from the second estimate of 4.1%. Fed Chair Jerome Powell reiterated that the Fed is committed to targeting 2% average inflation rate. The Dow rose 0.6%, the S&P 0.5%, and the Nasdaq 0.1%. Crude oil settled at $58 per barrel, while gold fell nearly $8 to $1725 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, 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.

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.

Earnings Help Support a Stretched Market

The Day Traders Strike Back: Our Monthly Survey of the Economy, Interest Rates, and Markets

This edition features the year ahead for the coronavirus vaccine; spinal cord stimulation innovation; the Democratic wins in Georgia and the impact on our coverage; and notes from Molson Coors, Intel, and new coverage Exact Sciences.

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.

Growth stocks may be outperforming value, again, in 2020. But in an environment of historically low interest rates (and with the coronavirus and economic shutdown seemingly poised to keep them low for a long time), many investors are still searching for high levels of income, which can often be found in value stocks. Progress on COVID-19 vaccines has given a lift to some of the cyclical companies (energy companies and regional banks) that have lagged in recent quarters, and value stocks have kept up the pace with growth stocks in the past quarter. The current yield on the iShares Russell 1000 Value Index ETF is 2.5%, compared to the 1.0% current yield on the iShares Russell 1000 Growth Index ETF. This is not unimportant, as the current yield on the 10-year Treasury bond is 0.95%.