In this edition, Berkshire's cash hoard an issue for firm; senior housing industry sees silver lining; and hailing Boston Beer; and Datadog, Host Hotels and Resorts, and Magna International

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 first-quarter earnings season is wrapping up, with blended earnings (actual results and the consensus for those still to report) showing a 0.6% year-over-year decline, according to Refinitiv. That is considerably better than the 5.0% decline expected at the start of the earnings period, though still not enough to avoid a technical earnings recession following 4Q's 3.4% decline. Propelling the 1Q outperformance was a 74% beat rate (versus the long-term average of 62%), with strong gains in Consumer Discretionary (+55%) and Industrials (+26%), but drags from Basic Materials and Utilities (both -22%). Our analysts are always on the lookout for companies that boost their outlooks during earnings season. Management's ability to "raise guidance" can often be a catalyst for market-beating returns in the quarters ahead. Here is an initial list of BUY-rated companies in Argus Coverage for which management has raised guidance or increased its outlook during the 1Q23 EPS reporting season.

The major indices were mixed on Thursday morning amid continued debt ceiling uncertainty, though a stellar report from Nvidia lifted the Tech sector, which was up nearly 4%. Nvidia shares jumped 27% after the chipmaker reported strong fiscal 1Q results and issued much higher-than-expected sales guidance for the second quarter. The Dow fell 0.4%, the S&P rose 0.7%, and the Nasdaq rose 1.6%. Crude oil fell $2 to $72 per barrel while gold fell $18 to $1946 per ounce.

Stocks edged lower on Tuesday morning as investors awaited new developments in the debt ceiling standoff. Business activity data was better than expected. S&P Global reported that its flash U.S. composite PMI index, which includes both manufacturing and services, rose to 54.5 in May, up from a final reading of 53.4 in April and above the consensus forecast of 53.0. On the earnings front, home improvement retailer Lowe's reported mixed first-quarter results, but lowered its full-year sales and EPS forecasts. The Dow fell 0.2%, the S&P 0.2%, and the Nasdaq 0.3%. Crude oil traded near $73 per barrel, while gold fell $5 to $1972 per ounce.

Monday Tee Up: Inflation, GDP, Costco

We recently read two statements that pretty much say it all. The first was this. 'Positive earnings surprises of this magnitude are rarely seen when you enter a recession.' That compared to this. 'Forecasted probability of recession at levels only seen during recessions.' Yes, these are confusing times.

Argus has published its latest Portfolio Selector, which features its popular Focus List. Each month, Argus' 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 Jim typically adds three or four new stocks per month. Below are the latest additions, all of which are rated BUY at Argus.

According to the Consumer Price Index report released Wednesday, top-level inflation pressures eased again last month in the U.S., continuing a downward trend that began last summer. Core prices ticked lower as well. The CPI numbers generally were in line with consensus expectations and Argus forecasts. The Bureau of Labor Statistics reported a 4.9% increase in overall inflation year-over-year through April, compared to a 5.9% rate through March and a 9.1% rate back in June 2022. The core rate, excluding the impact of food and energy prices, fell as well (to 5.5% in April, versus 5.6% in the prior month). Segments of the economy with stable/easing prices year-over-year included Gasoline, Used Cars & Trucks, and Medical Care Services. The overall rate was propped up by Transportation Services, Shelter, and Food, which tend to have stickier prices that are less likely to fall sharply. Looking ahead, we continue to think that the June 2022 CPI rate of 9.1% will prove to be the peak reading for the index in this cycle, as the housing market cools, supplies of new vehicles are replenished, and the price of oil stays below $90 per barrel. The Federal Reserve has lifted the feds fund rate from 0.0% to above 5.0% over the past 15 months, and the rate hikes appear to be reducing inflationary pressures. The next question is whether the rapid rate increase will tip the economy into a recession as inflation continues to head toward 2.0%.

Earnings, Employment, Economy: Three Es Keeping Recession at Bay

Stocks were seesawing but mostly higher on Wednesday morning following cooler inflation data. The Labor Department said that its consumer price index rose 4.9% from the prior year in April, below the consensus estimate of 5.0% and down from 5.0% in March. The core CPI, excluding volatile food and energy costs, rose a higher 5.5%, in line with consensus and down slightly from the prior month. On the earnings front, Airbnb shares fell sharply, despite solid 1Q results, after the company issued disappointing revenue guidance.