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.

Last week, the stock market did what it often does in September, which is head lower. The S&P 500 fell 1.69% and the Nasdaq Composite declined 1.61%. The DJIA fared the worst, declining 2.15%, weighed down by Boeing.

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.

The Technology sector started slowly in 2021 as investors focused on value stocks. But the sector has come on strong in recent months (up 22% year-to-date) and now is outperforming the market (up 20.7%) as well as value sectors such as Consumer Staples (+8%), Utilities (+10%), Materials (+17%), and Industrials (+18%). The sector is the largest in the U.S. market and now accounts for more than 28% of the S&P 500. Over the long term, we expect the 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 analysts' Tech sector ideas in our Focus List and Model Portfolios.

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.

Value stocks are outperforming growth in 2021 (for the first time since 2016), though a recent rally in growth stocks has narrowed the performance advantage for value. But in an environment of historically low interest rates, many investors are still searching for high levels of income, which often can be found in value stocks. During recent years, the performance record has favored growth. Since 2010, the Russell 1000 Growth Index has climbed more than 450%, compared to an advance of 180% for the Russell 1000 Value Index. In eight of the past 10 years, growth stocks have topped value stocks. That hasn't always been the case. In the previous decade, including the Great Recession, value stocks were better performers than growth stocks, advancing an admittedly low 8%, but still better than growth, which declined 15% during the decade. Value investors trace their roots to the famous "Security Analysis" textbook, written by Ben Graham, an economics professor at Columbia University. Warren Buffett was one of his students. The tide may now be turning. Progress on COVID-19 vaccines has given a lift to some of the cyclical companies (energy companies and banks) that have lagged in recent quarters, and value stocks have kept pace with growth stocks in the past year. In any event, value is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 1.6%, compared to the 0.5% current yield on the iShares Russell 1000 Growth Index ETF. This is important, as the current yield on the 10-year Treasury bond is 1.30%. For our list this week, we have screened our coverage universe for stocks that are BUY-rated by Argus Research analysts, have an Argus Financial Strength rating of at least Medium, and have a yield of 3.0% or higher. New stocks in our portfolio include the following.

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.

Value stocks are outperforming growth in 2021 for the first time since 2016. While a recent rally in growth stocks has narrowed the performance advantage for value in the year to date, an environment of historically low interest rates is one in which many investors are still searching for high levels of income -- which often can be found in value stocks. When we look for attractive high-yield/deep-value stocks at Argus, we look for low valuations on metrics such as price/earnings, price/sales, price/book, yield, and price/cash flow. We also look for companies with clean balance sheets, high levels of profitability, high-quality earnings, and experienced management teams. We seek to avoid companies in industries that are in secular decline, or with dividend yields that are so high that the payout is clearly at risk. Based on numerous requests from clients, we have designed a portfolio of companies that are BUY-rated at Argus Research, have a Financial Strength rating of at least Medium, and have a yield of 3.0% or higher.

Second-quarter earnings announcements are nearly complete, with some 90% of S&P 500 companies having reported. The profit recovery from the depths of the pandemic low in 2Q20 was been swift, with earnings growth of 93% in 2Q21, according to Refinitiv. But earnings do not look good just on a relative basis -- the $53.93 projected to be earned by S&P 500 companies for the second quarter is the highest ever for the index. Investors can now turn their attention to the third quarter, when earnings are expected to rise a still-strong 30% year-over-year. 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. Here are 20 BUY-rated companies in Argus coverage for which management has raised guidance or increased its outlook during the 2Q21 EPS reporting season.

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 kept momentum going in July and August. Our analysts have been progressing through earnings season and have come across many stocks that have approached target prices. We set targets through our valuation framework, which includes analysis of historical multiples, peer multiples, and future dividends and cash flows. After adjusting for the latest information, here are some of the stocks on which we raised target prices over the past month. All of the following stocks are rated BUY at Argus.

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.

The U.S. economy added 943,000 jobs in July, better than the 875,000 consensus and a sign that economic recovery continues despite the Delta variant. Even more impressive were trends in unemployment and overall income. The unemployment rate dropped by a half percentage point, to 5.4% from 5.9%. Average hourly earnings were up 0.4%; and the average workweek rose 0.2%. The gains in hours and workweek put more money in the pockets of all workers, not just new hires. The re-opening trend continues to drive growth, as jobs gains were led by sectors such as leisure and hospitality (380k) and local government education (221k). Industries including professional and business services also added jobs. The prior two months featured strong upward revisions, with May growth at 583,000 jobs and June at 938,000. Heading into the payrolls report, the number of jobs was approximately 7 million lower than the pre-COVID level. Still, the economy added 1.9 million jobs in the past 60 days, a positive trajectory. The labor force participation rate remains low at 61.7%, edging up from 61.6% in June as more people look for work; the historical average is 65%. The number of people filing initial unemployment claims each week remains above 350K. Though trending in the right direction, the data indicates that the employment environment is still under stress. We expect the unemployment rate will remain above 5.0% -- and thus the Federal Reserve will keep interest rates low -- into 2022.

The stock market was flat to down last week as positive earnings surprises proved to be baked-in. Tech stocks modestly underperformed blue chips. During Friday's session, the Dow Jones Industrial Average fell 149 points, or 0.42%. The S&P 500 was down 0.54%, and the Nasdaq Composite was down 0.71%. For the week, the DJIA was down 126 points, or 0.36%, the S&P 500 was down 0.37%, and the Nasdaq Composite was down 1.11%. Year-to-date, the DJIA is up 14.14%, the S&P 500 is up 17.02%, and the Nasdaq Composite is up 13.85%.

This edition features electrical suppliers and the fight against greenhouse gases; more talk of tapering; Amazon's earnings; and notes from Tesla, Starbucks, and Pinterest.

Stocks fell on Friday morning amid earnings from a range of major companies and new consumer spending data. The Commerce Department said that U.S. consumer spending rose 1.0% in June, up from a 0.1% decline in May and above the Reuters consensus forecast calling for 0.7% growth. The core personal consumption expenditures price index (PCE) rose 3.5% from the prior year in June, up from 3.4% in May but below the consensus forecast of 3.7%. Amazon shares fell more than 7%, despite strong earnings, on weaker-than-expected 2Q revenue and disappointing sales guidance for the current third quarter. The Dow fell 0.4%, the S&P 0.6%, and the Nasdaq 0.8%. Crude oil traded near $74 per barrel, while gold fell $11 to $1825 per ounce.