The onset of the coronavirus in 2020 knocked the stock market into a bear market. Though stocks have recovered, the U.S. economy is about to slow down and COVID-19 cases are rising again as virus variants spread. Volatility, which has dropped from the highs of 2020, still has not returned to pre-COVID levels. Daily prices can swing wildly, as they did during two consecutive days in mid-July when the Dow Jones Industrial Average plummeted more than 1,000 points. Yet investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes. Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate and can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods.

Many sentiment indicators remain frothy, though last Monday's big decline took the steam out of some of these barometers. Still, CBOE put/call (P/C) ratios, Rydex data, small-trader option activity, hedge fund exposure, and the American Association of Individual Investors (AAII) stock allocation all remain tilted heavily toward the bullish side.

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 latest run higher in West Texas Intermediate (WTI) had reached our target with an intraday high of $77 on July 6. That was followed by a sharp reversal, with WTI closing that day at $73.37. Then WTI really got hit on Monday, falling by 7.3% to $66.35, the largest one-day decline since September 2020.

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 stock market moved lower last week as inflation concerns spread from Wall Street to Main Street. Blue chips relatively outperformed as earnings season kicked off. During Friday's session, the Dow Jones Industrial Average fell 299 points, or 0.86%. The S&P 500 was down 0.75%, and the Nasdaq Composite was down 0.80%. For the week, the DJIA was down 182 points, or 0.52%, the S&P 500 was down 0.97%, and the Nasdaq Composite was down 1.87%. Year-to-date, the DJIA is up 13.33%, the S&P 500 is up 15.20%, and the Nasdaq Composite is up 11.94%.

Stocks fell on Friday morning amid new retail sales and consumer confidence data. The Commerce Department said that U.S. retail sales rose 0.6% in June, up from a decline of 1.7% in May and above the Reuters consensus forecast, which called for a drop of 0.4%. The University of Michigan said that its consumer sentiment index fell to 80.8 in the first half of July, down from a final reading of 85.5 in June and below the consensus forecast of 86.5. The Dow, the S&P, and the Nasdaq were all down about 0.3%. Crude oil traded near $72 per barrel, while gold fell $16 to $1813 per ounce.

Stocks were mixed on Thursday as investors weighed a new round of earnings reports along with employment and manufacturing data. The Federal Reserve said that U.S. manufacturing output fell 0.1% in June, reflecting reduced automobile production due to the ongoing semiconductor shortage. The reading was down from a 0.9% increase in May and below the consensus forecast calling for 0.2% growth. On the employment front, first-time jobless claims fell to 360,000, the third straight reading below 400,000 but slightly above consensus. Continuing claims fell to 3.241 million from 3.367 million a week earlier and came in below the consensus of 3.3 million. The Dow rose 0.15%, the S&P fell 0.33%, and the Nasdaq fell 0.70%. Crude oil fell 2% to $71.50 per barrel, while gold rose $4 to $1829 per ounce.

Stocks fell on Thursday morning following earnings reports from a range of major companies and new employment data. The Labor Department said that first-time claims for state unemployment benefits fell to 360,000 for the week ended July 10, down from 386,000 a week earlier but above the Bloomberg consensus of 350,000. On Capitol Hill, Fed Chair Jerome Powell reiterated his view that the recent spike in inflation would prove temporary and indicated that the Fed would maintain its current bond-buying program in the near term. The Dow was flat, the S&P fell 0.3%, and the Nasdaq fell 0.7%. Crude oil fell more than 1% to $72 per barrel, while gold traded near $1826 per ounce.

Stocks were down on Wednesday morning. The Labor Department said that U.S. producer prices rose 1.0% in June, following a 0.8% increase in May. The reading marked the largest annual gain in more than 10 years. The Dow fell 0.1%, the S&P was down 0.1%, and the Nasdaq fell less than 0.1%. Crude oil traded near $75 per barrel, while gold rose $3 to $1824 per ounce.

When investors are souring on the stock market, they tend to sell any rallies. And when they are willing to let the good times roll, they tend to buy any dips. So far, 2021 has been a year of buying the dips. That may explain why, in the trading year to date, every month except January finished with a gain on the S&P 500. The blue-chip index advanced 5.8% in the first half, was up 14.4% as of mid-year, and is already up 1.7% in July. Granted, historically July is the best summer month, averaging a 1.1% gain on the S&P 500 since 1980.

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.

Certain market sentiment indicators remain exceedingly enthusiastic. Generally, we don't pay much attention to this data, but today we'll spend some time examining the extraordinary exuberance. The real action comes from the CBOE put/call (P/C) ratios, Rydex investor data, small-trader option activity, and the AAII asset allocation to stocks.

We recently raised our rating on the Utilities sector to Market-Weight from Under-Weight. Regulated electric and gas distribution operations are benefiting from the recovery in commercial and industrial demand as workers return to offices, plants, factories, and showrooms. Hotter summers are also pushing up demand for air conditioning across most of the U.S. The sector is underperforming the market thus far in 2021, with a gain of 1%. It underperformed in 2020, with a gain of 3.9%, and in 2019, advancing 22.2%. The sector accounts for 2.6% of the S&P 500. Over the past five years, the weighting has ranged from 2.0% to 4.0%. We think the sector should account for about 2%-3% of diversified portfolios. The sector includes the electric, gas, and water utility industries. Here is how we use our analysts' Utility sector ideas in our Focus List and Model Portfolios. All stocks are rated BUY.

This edition features the latest banking stress tests; policy effects on pharma firms; an opportunity with Prosegur; and three new-coverage notes: Naver, Deliveroo, and Stellantis.

On Wednesday, we talked about the strength of Technology sector stocks and their primary indices. We focused on the Nasdaq 100 (QQQ) and showed a very top-heavy situation. Seven stocks make up 48% of the ETF. Five of them are at/near all-time highs (ATHs) and AAPL is 6% from an ATH. TSLA is 22% from its ATH, but has been strong in the past couple of days, retaking both its 50- and 200-day averages over the past week.

In recent weeks, longer-term Treasury rates remained range-bound, albeit lower from the highs seen in March. Dovish Fed Chairman Powell and other Fed governors reiterated a commitment to low short-term rates through 2022 and to market stabilization. The economy accelerated the reopening process faster than expected as vaccines numbers increased. The curve flattened (two-year/10-year spread) by five basis points, from 149 basis points on April 30 to 144 basis points on May 28. We expect inflation to continue rising, but the increase may be temporary as compared to the low figures in the spring of 2020. We continue to believe the Fed will place greater emphasis on its employment mandate than on managing inflation to the 2% target. The rising long-term interest rates and steepening yield curve hold several implications for investors. One, higher rates raise valuations on growth equities, which has led to stock market volatility. But the steeper yield curve also signals that the U.S. economy is rebounding -- and the wider spread between short-term and long-term bonds is beneficial for most of the Financial Services sector, which we recently moved to Over-Weight.

Both the Dow Industrials (DIA) and Transports (IYT) have traced out a lower low and lower high since May 7. A Dow Theory Sell Signal (DTSS) is when both averages: (1) set a new high; (2) pull back from those highs; (3) rebound by 3% or more without making a higher high; and (4) decline below the pull-back low. This is a very old theory that was first developed in the early 1900s. Should we sell everything and run for the hills?