We saw some strange trading days in late 2020, and the majority of them had to do with the massive rotation that was happening at the time. But maybe we should start calling days like Thursday, January 14 more the norm than wacky. As we said recently, 2021 is starting out as the polar opposite of 2020 -- at least as far as the markets are concerned.

Argus has published its latest Portfolio Selector, which features its popular Focus List. Each month, Director of Research Jim Kelleher, CFA, surveys the team of Argus Research industry analysts for their timeliest recommendations out of the company's fundamental universe of approximately 500 stocks. The Focus List typically includes 30 stocks: turnover is high, as Director of Research Kelleher typically adds three or four new stocks per month. Below are the latest additions, all of which are rated BUY at Argus.

The housing market -- a major pillar of U.S. economic growth pre-pandemic -- is rebounding. Existing home sales, which were down 32% in May from January, have been rising consistently since late spring and are closing in on a 100% increase from May lows. Building permits, which are a leading indicator for the industry, peaked in January at 1.55 million units and are now back above that level (data through November). They too have lifted more than 50% from April's lows. Prices have held up as well. The S&P/Case-Shiller National Home Price Index is one of the most closely watched barometers of the housing market. Data for October 2020 showed that prices gained 7.9% year-over-year -- the highest rate in six years. Meanwhile, inventory levels are tight: currently there is a low 4.1-month supply of existing homes for sale (the average range is 4.5-7.5 months), according to the U.S. Census Bureau. On the other side of the pandemic, we expect demand for homes -- with yards between neighbors and no elevator buttons to press -- will remain strong.

Stocks rallied through the final nine months of 2020 despite the raging pandemic, a summer of unprecedented wildfires, and an increasingly partisan political climate. Stocks have done so, at least partly, because the worst economic effects of the pandemic have hit those living toward the lower end of the economic scale, while leaving others largely unscathed.

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 Anthem Inc (ANTM); Activision Blizzard Inc (ATVI); Coca-Cola Co (KO); International Business Machine (IBM) and the Focus List deletions are Procter & Gamble Co. (PG); Electronic Arts, Inc. (EA); CIENA Corp. (CIEN); Vertex Pharmaceuticals, Inc. (VRTX).

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.

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%.

Stocks rose modestly on Thursday morning amid new employment and services sector data. The Labor Department reported that first-time claims for state unemployment benefits fell to 712,000 for the week ended November 28, down from 787,000 a week earlier and below the Bloomberg consensus forecast of 775,000. Services sector data slowed for a second straight month. The Institute for Supply Management said that its nonmanufacturing index fell to 55.9 in November, down from 56.6 in October and below the consensus forecast of 56.0. The Dow rose 0.5%, the S&P 0.2%, and the Nasdaq 0.3%. Crude oil rose slightly to $45 per barrel, while gold traded near $1829 per ounce.

Into the Home Stretch: Our Monthly Survey of the Economy, Interest Rates, and Markets

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 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.

The Technology sector has led the market recovery from the COVID-19 depths of March 2020. Through November 20, the sector was up 31% for the year, compared to a 10% gain for the S&P 500. The Tech sector is the largest in the U.S. market and now accounts for more than 27% of the S&P 500. Over the long term, we expect the Tech sector to benefit from pervasive digitization across the economy, greater acceptance of transformative technologies, and the development of the Internet of Things (IoT): Healthy company and sector fundamentals are also positive. For individual companies, these include high cash levels, low debt, and broad international business exposure. We have an Over-Weight ranking on the Tech sector and think investors should look to allocate up to 30% of their diversified portfolios to the group. Here is how we use our Tech sector ideas from our analysts in our Focus List and Model Portfolios.

Stocks were mixed on Wednesday morning after reaching record levels on Tuesday. On the employment front, first-time claims for state unemployment benefits rose to 778,000 for the week ended November 21, up from 748,000 a week earlier and above the Bloomberg consensus forecast of 730,000. Core capital goods orders excluding aircraft rose 0.7% in October, down from 1.9% in September but above the consensus forecast of 0.5% growth. The Dow fell 0.6%, the S&P fell 0.3%, and the Nasdaq rose 0.1%. Crude oil traded near $45 per barrel, while gold rose $5 to $1809 per ounce.

The 3Q20 EPS season is mostly in the record books, with retailers the last group to report. The results were not pretty, but were better than 2Q20. Through mid-November, Refinitiv reported that S&P 500 earnings declined in 3Q at a 7.4% rate -- a vast improvement from the prior quarter's 30.5% decline. Excluding the Energy sector, earnings declined at a 3.2% rate. Of the 462 companies in the S&P 500 that have reported earnings to date for 20Q3, 84% have reported earnings above analyst expectations. This compares to a long-term average of 65% and prior four-quarter average of 73%. Our analysts are always looking for companies that raise their outlooks during earnings season. Management's ability to "raise guidance" can often be a catalyst to strong returns in the quarters ahead. There were not many in this most-recent period. Here are 12 BUY-rated companies in Argus Coverage for which management has raised guidance or increased its outlook during the recent EPS reporting season.

Sustainable Impact Investing is gaining traction not only with Argus Research clients, but also with the global investment community. In January, BlackRock CEO Lawrence Fink, who oversees approximately $7 trillion in assets, announced that his firm would be investing in companies that are making progress on sustainability. Mr. Fink's new focus follows rapid growth in sustainable assets in recent years. According to Opimas, a management consultancy focused on global capital markets, global assets under management in ESG strategies had grown to $40.5 trillion in 2020, doubling in four years and tripling in eight years. There were almost 400 ESG strategies launched in the Morningstar investment universe in 2019, compared with around 160 launches in 2016. The UN Principles for Responsible Investing -- to which Argus Research is a signatory -- now represents more than 1,750 signatories with assets of US $80 trillion, according to Barron's. As assets have flowed in, SRI investing has evolved over the past 40 years. Now, instead of merely identifying industries to avoid, the discipline promotes "sustainable" business practices across all businesses that can have an "impact" on global issues such as workers' rights, poverty, hunger and the climate. Based on numerous requests from clients, we have compiled a list of companies followed by Argus Research that are in position to have this type of "sustainable impact" on the environment, workplace and community. These firms have exemplary records not only in delivering on the bottom line, but also in improving the environment, contributing to community relations, and showing respect for their employees. We derived our list by identifying companies that are either BUY-rated or HOLD-rated by Argus analysts, and also score highly on ESG (Environmental, Social and Governance) criteria established by the JUST Capital Foundation. JUST Capital utilizes a combination of polling, data-driven research, and strategic engagement to shift behaviors and activities in corporate America and the financial markets. JUST Capital's mission is to drive measurable corporate change to create a stakeholder-centric, inclusive form of capitalism that reflects the priorities of the American public. JUST ranks the Russell 1000 on these criteria against a scale of 1-100. Here are the companies in the Argus Universe that score highest on the scale. All 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.

Stocks rose on Tuesday morning amid hopes for a resolution of the fiscal stimulus stalemate, as House Speaker Nancy Pelosi set Tuesday as the deadline for any pre-election deal with Senate Republicans. Meanwhile, the Justice Department filed a major antitrust lawsuit against Google, and the Commerce Department reported new housing market data. Housing starts for single-family homes rose a strong 8.5% in September, to an annualized 1.108 million units, while starts for multi-family housing fell 16.3% to an annualized 307,000 units. The Dow rose 0.4%, the S&P 0.4%, and the Nasdaq 0.1%. Crude oil traded near $40.50 per barrel, while gold rose $2 to $1913 per ounce.

Stocks rose on Thursday morning following new employment data and reports that the White House and Congressional Democrats had resumed fiscal stimulus negotiations. The Labor Department said that initial claims for state unemployment benefits totaled 840,000 for the week ended October 3, down from 849,000 a week earlier but above the Bloomberg consensus forecast of 820,000. First-time claims have now held below 1 million for six straight weeks, but have not fallen below 800,000 since the start of the pandemic. The Dow rose 0.4%, the S&P 0.6%, and the Nasdaq 0.5%. Crude oil traded near $41 per barrel, while gold rose slightly $1891 per ounce.

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.

September, a historically tough month, lived up to its billing in 2020. Major indices all lost ground, with the leaders for 2020 getting hit the hardest. Energy and Financials, two consistent themes, were weak once again. Results could have been worse, as late-month strength cut some of the losses.

The 2Q20 EPS season is in the record books, and the results were not pretty. Through late August, Refinitiv reported that S&P 500 earnings declined at a 30.5% rate. The Industrial and Energy groups were the weakest performers, while the defensive Utilities and Healthcare sectors were the strongest, up in the mid-single digits. The Tech sector's earnings increased 3%. Our analysts are always on the lookout for companies that raise their outlooks during earnings season. Management's ability to "raise guidance" can often be a catalyst to strong returns in the quarters ahead. There were not many in this most-recent period. Here are 12 BUY-rated companies in Argus Coverage for which management has raised guidance or increased its outlook during the recent EPS reporting season.

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.