Back on August 25, with West Texas Intermediate (WTI) near $68/barrel, we said it looked like crude had completed a false breakdown, which made it very likely that the correction was over. WTI had hit one of our targets based on a three-wave ABC decline which targeted $62, and that was basically the bottom. Since then, WTI rallied up to the $70 region, paused for about a week, and looks to be breaking out.

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.

Pricing pressures are hot, primarily at the producer level. After months of below-target inflation readings, mainstream measures of inflation are ticking higher as well, compared to the deflationary lows of the early months of the pandemic. Even so, we don't think the U.S. Federal Reserve is planning to change its approach to low interest rates, and Chairman Powell has said that the central bank is willing to let inflation rise above its 2% target in exchange for a continued decline in unemployment. We track 18 inflation measures on a monthly basis. On average, they indicate that prices are rising at a 7.9% rate, ahead of last month's 7.6% reading. But drilling down to core inflation, our reading is 2.9%, with the all-important five-year inflation target at 2.2%. The big increases in recent months have come at the producer level, as the PPI for intermediate unprocessed goods, for example, is now 50% and the PPI for intermediate processed goods is 23%. Much of this price activity is driven by the recent recovery in commodity prices, including oil, which has more than tripled year-over year. The Federal Reserve's inflation forecasts now call for a core inflation reading of 3.4% in 2021 and 2.1% in 2022.

Although we've said this before, it might be time to keep an eye on interest rates. The 10-year Treasury yield broke lower in early July, and fell to 1.13% on August 4, hitting the low of 1.13% from July 20. The recent yield lows represented a 50% retracement of the move from August until March. Yields stopped right at the 50-week moving average, a bearish sign. After the 8/4 bottom, yields popped right to support from the declining 50-day average at 1.38%. Yields then pulled back to 1.22% and reversed higher back to the 1.34% region, or right where the 50-day is again.

Vickers Stock Research, a subsidiary of Argus Research Group, tracks insider trading and institutional ownership. Form 13-Fs have now come in from 2Q21. We review the 13Fs of major activist investors, including Carl Icahn, Trian Fund Management, Jana Partners, and ValueAct Holdings, among others. Activist investing has evolved in 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.

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.

Market breadth for indices and sectors remains mixed. The percentage of stocks in the S&P 500 above their 50-day average has improved to 68% from 37% in mid-July. It would certainly be positive if this percentage continues to improve. The percentage above their 200-day average has risen to 87% from a recent 83%. That is a very strong reading.

Stocks were mixed on Wednesday morning as investors weighed new consumer price data. The Labor Department said that its consumer price index rose 0.5% in July, down from 0.9% in June and in line with the Reuters consensus forecast. Consumer prices also rose 5.4% from the prior year, slightly above the consensus forecast of 5.3%. The Dow rose 0.5%, the S&P was flat, and the Nasdaq fell 0.6%. Crude oil traded near $67.50 per barrel, while gold rose $20 to $1752 per ounce.

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.

Stocks were mixed on Tuesday morning as the Senate voted to approve the new $1 trillion infrastructure bill. The Labor Department said that U.S. worker productivity rose at a 2.3% annualized rate in 2Q, down from 4.3% in 1Q and below the Reuters consensus forecast of 3.5% growth. The Dow rose 0.4%, the S&P rose 0.1%, and the Nasdaq fell 0.5%. Crude oil traded near $69 per barrel, while gold rose $2 to $1728 per ounce.

Stocks were largely flat on Monday morning as investors weighed positive employment data along with the impact of rising Delta variant cases. The Labor Department's JOLTS report said that U.S. job openings rose by 590,000 to 10.1 million on the last day of June, above the consensus forecast of 9.28 million. Hiring also rose to 6.7 million in June from 6.0 million in May. The data came after a strong July employment report on Friday morning. The Dow fell 0.2%, the S&P fell 0.1%, and the Nasdaq rose 0.1%. Crude oil fell more than 3% to $66 per barrel, while gold dropped $28 to $1735 per ounce.

The stock market was up slightly last week, owing its success to a positive jobs Friday report and solid earnings throughout. Tech stocks modestly outperformed blue chips. During Friday's session, the Dow Jones Industrial Average increased 144 points, or 0.41%. The S&P 500 was up 0.17%, and the Nasdaq Composite was down 0.40%. For the week, the DJIA was up 273 points, or 0.78%, the S&P 500 was up 0.94%, and the Nasdaq Composite was up 1.11%. Year-to-date, the DJIA is up 15.04%, the S&P 500 is up 18.12%, and the Nasdaq Composite is up 15.11%.

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 fell on Wednesday morning as investors weighed a new round of earnings reports and weaker-than-expected employment data. Payroll provider ADP said that U.S. companies added 330,000 jobs in July, down from 680,000 in June and well below the Reuters consensus forecast of 695,000. Services sector data was positive. The Institute for Supply Management said that its nonmanufacturing index rose to a record 64.1 in July, up from 60.1 in June and above the consensus forecast. The Dow fell 0.6%, the S&P 0.4%, and the Nasdaq 0.1%. Crude oil traded near $69 per barrel, while gold fell slightly to $1813 per ounce.

Stocks were mixed on Tuesday morning amid uncertainty about the economic impact of the Delta variant. Factory order data showed slower growth but still topped the consensus forecast. The Commerce Department said that U.S. factory orders rose 1.5% in June, above the Reuters consensus of 1.0% but down from 2.3% growth in May. The Dow rose 0.2%, the S&P fell 0.1%, and the Nasdaq fell 0.6%. Crude oil traded near $70 per barrel, while gold fell $8 to $1814 per ounce.

Stocks rose on Monday morning as investors weighed more 2Q earnings reports, M&A news, and prospects for an infrastructure deal in Washington. Payments firm Square Inc. rose nearly 9% after announcing that it would purchase Australia's Afterpay Ltd. for $29 billion. Manufacturing data showed continued expansion, but came in slightly below consensus. The Institute for Supply Management said that its index of national factory activity fell to 59.5 in July, down from 60.6 in June and below the Reuters consensus of 60.9. The Dow, the S&P, and the Nasdaq were all up about 0.4%. Crude oil traded near $72.50 per barrel, while gold rose slightly to $1818 per ounce.

Stocks edged higher on Monday morning amid a new round of earnings reports and housing market data. Investors also looked ahead to the Federal Reserve's meeting on Tuesday and Wednesday. The Commerce Department said that U.S. new home sales fell 6.6% in June to a seasonally adjusted annual rate of 676,000 units, below the Reuters consensus forecast of 800,000. The Dow rose 0.1%, the S&P 0.2%, and the Nasdaq 0.1%. Crude oil traded near $72 per barrel, while gold fell $3 to $1799 per ounce.