Stocks rose modestly on Wednesday morning, recovering some of their losses after Tuesday's selloff. On the employment front, payroll provider ADP said that U.S. private employers added 742,000 jobs in April, up from 565,000 in March. The reading was the strongest since last September but missed the Reuters consensus, which called for an increase of 800,000 jobs. The Institute for Supply Management said that its services index fell to 62.7 in April, down from 63.7 in March and below the consensus forecast of 64.3. The Dow rose 0.2%, the S&P 0.3%, and the Nasdaq 0.5%. Crude oil traded near $66 per barrel, while gold rose $7 to $1783 per ounce.

The stock market moved lower last week, then rallied on Friday, ultimately finishing flat-to-down. Tech stocks and blue chips performed similarly, with tech narrowly outperforming. During Friday's session, the Dow Jones Industrial Average increased 228 points, or 0.67%. The S&P 500 was up 1.09%, and the Nasdaq Composite was up 1.44%. For the week, the DJIA was down 0.46%, the S&P 500 was up 0.13%, and the Nasdaq Composite was down 0.25%. Year-to-date, the DJIA is up 11.23%, the S&P 500 is up 11.29%, and the Nasdaq Composite is up 8.76%.

Stocks fell on Thursday afternoon after Bloomberg reported that President Biden would propose raising the capital gains tax rate for people earning at least $1 million. Prior to the tax news, stocks were mixed as investors weighed new 1Q earnings reports, a decline in existing home sales, and weekly employment data. First-time jobless claims fell to 547,000, a new post-pandemic low and below the consensus forecast of 610,000. Continuing claims fell to 3.674 million, down from 3.708 million a week earlier but slightly above the consensus forecast. The Dow fell 0.94%, the S&P 0.92%, and the Nasdaq 0.94%. Crude oil traded near $62 per barrel, while gold fell $9 to $1784 per ounce.

Stocks were generally higher on Wednesday morning, led by the Technology and Consumer Discretionary sectors, as investors awaited more details about the Biden administration's $2 trillion infrastructure improvement plan. On the employment front, payroll provider ADP said that U.S. private employers added 517,000 jobs in March, up strongly from a revised 176,000 in February. The reading missed the Bloomberg consensus forecast of 550,000, though it was still the strongest gain since September. The Dow was flat, the S&P rose 0.6%, and the Nasdaq rose 1.6%. Crude oil traded near $61 per barrel, while gold rose $19 to $1703 per ounce.

We recently raised our rating on the Communication Services sector to Over-Weight. In this barbell sector, media and entertainment companies should benefit from robust online activity and the reopening of theme parks and movie theaters. Providers of telecom services should benefit from ARPU gains as the 5G rollout gains traction. The style mix of the sector is approximately one-third value and two-thirds growth. The adjusted pro-forma beta is approximately 1.1 (like the old telecoms), while the yield is 0.9% (reflecting the impact of Google and Facebook). The smoothed growth rate is 7% and the P/E ratio is 21x. The sector accounts for 11% of the S&P 500. We think investors should consider allocating 12%-14% of diversified portfolios to the sector. Here are some of our top picks.

Everyone is talking about the new $1.9 trillion fiscal stimulus plan instead. Meanwhile, U.S. debt levels have quietly and quickly grown over the past 10 years. Total U.S. debt is now more than 120% of GDP, according to the Office of Management & the Budget. That is the highest level since World War II. In the 1980s, the debt/GDP ratio was solidly in the 40% range, and moved up toward 60% by 2000. The debt level soared around 2010, as the government spent aggressively to brake the recession and rekindle growth. (According to Keynes, that's what the government is supposed to do.) Still, despite more than 10 years of economic growth prior to the pandemic, the debt level has only grown as a percentage of GDP. Now, in light of the fiscal spending to fight the impact of COVID-19, debt levels have surged. This is not a problem that has to be fixed today. After all, interest rates are low on an historical basis and policies to change the trajectory (less spending, more taxes) could push the economy into decline. But politicians should start to establish a plan to address the issue in the next 10-15 years. If not, the situation could result in hyperinflation or an inability for the government to address long-term problems such as rebuilding infrastructure or addressing climate change.

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 Lazard Ltd. (LAZ); KLA Corp. (KLAC); Silk Road Medical Inc (SILK); Pinterest Inc (PINS) and the Focus List deletions are Citizens Financial Group Inc (CFG); Moderna Inc (MRNA); Verizon Communications Inc (VZ); Western Digital Corp. (WDC).

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 stock market dropped last week, as surging bond yields signaled tighter lending conditions may lie ahead. Tech stocks were the hardest hit and the Nasdaq recorded its worst week since October-though blue chips certainly weren't spared. During Friday's session, the Dow Jones Industrial Average fell 470 points, or 1.50%. The S&P 500 was down 0.48%, and the Nasdaq Composite increased 0.56%. For the week, the DJIA dropped 562 points, or 1.78%, the S&P 500 was down 2.45%, and the Nasdaq Composite was down 4.92%. For the year-to-date, the DJIA is up 1.06%, the S&P 500 is up 1.47%, and the Nasdaq Composite is up 2.36%.

Vickers Stock Research, a subsidiary of Argus Research Group, tracks and analyzes insider trading and institutional ownership trends. Form 13-Fs are due 45 days after the end of calendar quarters, and are now coming in from 4Q20. We review the 13Fs of the major activist investors, including Carl Icahn, Trian Fund Management, Jana Partners, and ValueAct Holdings, among others. Activist investing has evolved and is now less about generating a short-term return on an underpriced stock and more about achieving long-term returns through an active management/investor partnership. Here are some recent new purchases and key holdings of activist investors, according to Vickers.

Stocks sold off last week, due in part to frenzied trading in certain corners of the market, along with FOMC commentary that highlighted a slowing recovery. The general public took special note of this week's equity market drama, with Google search interest for 'stock market' at its highest levels since March 2020. Blue-chips fared slightly better than tech stocks during the slide. On Friday, The Dow Jones Industrial Average fell 621 points, or 2.03%. The S&P 500 was down 1.93% and the Nasdaq Composite was down 2.00%. For the week, the DJIA fell 3.27%, the S&P 500 dropped 3.31%, and the Nasdaq Composite sunk 3.49%.

Stocks fell on Wednesday morning as investors weighed a new round of earnings reports and awaited the Federal Reserve's afternoon policy statement and comments from Fed Chair Jerome Powell. On the earnings front, Microsoft shares rose more than 2% after the company posted better-than-expected fiscal 2Q results and issued strong 3Q guidance. Boeing reported a wider-than-expected fourth-quarter loss, hurt by weak demand for aircraft due to the pandemic and a $6.5 billion charge on its new 777X jet. The Dow fell 1.1%, the S&P 1.1%, and the Nasdaq 0.8%. Crude oil traded near $53 per barrel, while gold fell $7 to $1844 per ounce.

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%.

Everyone is justifiably talking about the latest wave of the coronavirus. As such, little attention is being paid to U.S. debt levels that have quietly and quickly grown over the past 10 years. Total U.S. debt is now more than 120% of GDP -- the highest level since World War II. In the 1980s, the debt/GDP ratio was solidly in the 40% range, and moved up toward the 60% level by 2000. The debt level soared around 2010, as the government spent aggressively to brake the recession and rekindle growth (which is what the government is supposed to do). However, despite more than 10 years of economic growth prior to the pandemic, the debt level has only grown as a percentage of GDP. Now, in light of the fiscal spending in 2020, debt levels have surged further. This is not a problem that has to be fixed today. After all, interest rates are low and policies to change the trajectory (less spending, more taxes) could push the economy deeper into recession. But politicians should start to establish a plan to address the issue in the next 10-15 years. If the problem is not solved, the situation could result in hyper-inflation or an inability for the government to address long-term problems such as rebuilding the infrastructure or climate change.

The onset of the coronavirus earlier this year knocked the stock market into a bear market. Though stocks have recovered, the U.S. economy is still in recession and COVID-19 cases are spiking as the weather turns colder and people head indoors. Volatility, which was low in early 2020 after a robust year for equities in 2019, has spiked higher, and has remained elevated. Is it time to cash in the chips? We note that 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 such as fixed income and cash. As well, those returns are from eras when the 10-year Treasury bond yield was not sub-1.0%. So what's a potential equity strategy for investors amid all the uncertainty? Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate. Academic literature and, more to the point returns history, indicate that Min Vol can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods. Stocks included in our Min Vol model portfolio and typically industry leaders and have received a high score from our A6 Quant Model on Financial Strength and a low score on Risk. Stocks in the portfolio include the following.

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.