According to data from Vickers Stock Research, corporate insiders have reacted with increasing optimism in recent weeks as stocks have found new lows. Vickers' most-recent Total One-Week Sell/Buy Ratio, which looks at insider transactions across the NYSE, Nasdaq, and ASE, is 0.96 and marks a very rare time when there are actually more insider-purchase transactions than sales transactions (resulting in a sell/buy ratio below 1.00). This last happened at the depths of the initial pandemic correction, when the sell/buy ratio was below 1.00 from March 16, 2020, through March 30, 2020. The DJIA had dropped to 18,591 back then -- but a mere three months later (by June 2020), the index was back above 27,000. Vickers' broader data is also resoundingly positive. For the first time since May 2020, Vickers' Total Eight-Week Sell/Buy Ratio has entered bullish territory, coming in this week at 1.87 on a scale where any reading below 2.00 is bullish, readings between 2.00 and 2.50 are neutral, and readings above 2.50 are bearish.

April Deluge: Our Monthly Survey of the Economy, Interest Rates, and Markets

Yikes. It looked like it could be a very bad start to May, but a mid-afternoon rally on Monday (led by Communication Services, Energy, and Technology) saved the stock market. Talk about a great save -- and just as time was running out, with the major indices below their corrective and bear-market lows. Let's take a step back.

Stocks were mixed on Monday morning following Friday's massive selloff, as investors awaited the Fed's policy statement on Wednesday and a likely 50-basis-point rate hike. Manufacturing data disappointed. The Institute for Supply Management said that its U.S. factory index fell to 55.4 in April, down from 57.1 in March and below the Reuters consensus forecast of 57.6. The reading was the lowest since July 2020. The Dow fell 0.3%, the S&P fell 0.3%, and the Nasdaq rose 0.2%. Crude oil fell slightly to $104 per barrel, while gold traded near $1868 per ounce.

The stock market opens Monday looking for a fresh start in May and any crumbs of positive news. The big event of the week is on Wednesday when the Federal Reserve announces its next monetary policy move. Most economists see that move as a 50-basis-point rate hike. Over the weekend, Berkshire Hathaway reported earnings and hosted its annual meeting with famed CEO Warren Buffett. More big earnings and economic reports are coming this week, including the jobs report for April. More than 1,600 public companies will report on their last quarter. The range and number of companies will give more data points on how different sectors are weathering the many external factors out there pressuring valuations, including - the war in Ukraine, inflation, and rising interest rates. The stock market carnage in April was swift, decisive, and severe. The Nasdaq now has lost all gains since 2008. The Dow and S&P are at their lowest levels since March 2020. In April, the Dow Jones Industrial average dropped -4.9%, the S&P 500 fell -8.8%, with the Nasdaq Composite again hit hardest losing -13%. Year-to-date the Dow is down -9.3%, the S&P 500 is further in correction territory, off -13.3%, and the Nasdaq is in bear territory, down -21.2%. Breaking down the sectors, only two of the eleven broad S&P categories are in the green for 2022. Here are the results so far year-to-date: Basic Materials -6%, Energy +35%, Healthcare -8%, Industrials -10%, Consumer Staples +0.7%, Utilities -0.5%, Financials -12%, Communication Services -26%, Information Technology -19%, Real Estate -10%, Consumer Discretionary -21%. It's been a rough start to 2022.

Innovation may be hard to define. But to borrow from former U.S. Supreme Court Justice Potter Stewart, you know it when you see it. The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where costs are lower. Yet the U.S. economy, even during the pandemic, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as vaccines) and services and moving into new markets and applications, the domestic economy would not be growing, and capital would not be flooding into the country. Consider that U.S. GDP was approximately $1 trillion in 1930 but was more than $24 trillion at the end of 2021. That's growth of 24-times. Meanwhile, the U.S. population has grown less than three-times during that time span, to 320 million from 120 million. The delta between GDP growth and population growth has been driven, in large part, by innovation.

Simply put, the end of last week was just ugly, with a two-day S&P 500 collapse of 4.2% (the largest two-day slide since September 2020). The Nasdaq and the Nasdaq 100 (QQQ) gave up 4.6%. Chart support for the "500" sits between 4,115 and 4,410 and is from the lows of a few months ago.

Innovation may be hard to define, but (to borrow from former U.S. Supreme Court Justice Potter Stewart) you know it when you see it. The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago -- textiles, televisions, even automobiles, to a large degree -- have moved overseas, where costs are lower. Yet the U.S. economy is at its largest point in history and still growing. If U.S. corporations were not innovating, creating new products and services, and moving into new markets and applications, the domestic economy would be contracting, not expanding. As well, capital would not be flooding into the country. Particularly at this juncture of the market and economic cycles, when uncertainty is high due to the pandemic and upcoming changes to interest rates by the Federal Reserve, we look to innovative companies to navigate the challenges successfully. At Argus, an 88-year-old independent research firm that has innovated a time or two in its long history, we have focused on four types of innovative companies: Industry Disruptors; First to Market; New Product Specialists; and Product & Process Perfectors. Here are some examples of companies that are featured in our Innovation Theme Model Portfolio.

Stocks fell sharply on Thursday afternoon, giving up early gains after Fed officials raised prospects for more aggressive 50-basis-point rate hikes beginning next month. On the earnings front, automaker Tesla and American Airlines posted stronger-than-expected results. Weekly employment data was generally positive. The Labor Department said that first-time claims for state unemployment benefits fell to 184,000 for the week ended April 16, down from 186,000 a week earlier but above the Bloomberg consensus of 180,000. Continuing claims fell to 1.417 million from 1.475 million a week earlier and were below the consensus estimate. The Dow fell 1.05%, the S&P 1.48%, and the Nasdaq 2.07%. Crude oil traded near $104 per barrel, while gold fell $2 to $1954 per ounce.

Economy Faces Inflation, War in Ukraine

For yet another week, the song remains the same. Commodities are still king while stocks, especially higher-beta issues, remain in the dumpster. This shouldn't be a surprise, at least based on technical analysis. Indeed, intermediate- to longer-term trends and price momentum tend to go hand-in-hand for longer than most expect.

The stock market opens Monday with corporate earnings season ramping up. On the docket, more banks and financial companies will report, including some national giants, like Bank of America and American Express, as well as many regional banks. Other key companies reporting this week include IBM, Halliburton, Lockheed Martin, Johnson & Johnson, Tesla, Alcoa, Procter & Gamble, AT&T, Verizon, Netflix, American Airlines, and United Airlines. The wide range of reporting companies will help give economists a sense of how different sectors are weathering inflation, rising interest rates, and the impact of the war in Ukraine and economic sanctions on Russia. Last week, the Dow Jones Industrial average fell 0.4%, the S&P 500 2.4%, and the Nasdaq Composite 3.9%. Year-to-date, the Dow is down 5.2%, the S&P 7.8%, and the Nasdaq 14.7%. On Friday, the Dow fell 0.3%, the S&P 1.2%, and the Nasdaq 2.1%.

This edition features our oil market update, Sea's challenges in shoring up profitability, the rhythm of media entertainment's pulse, and BASF, Alibaba, and BlackRock.

The stock market opens Monday to a shortened trading week ending with the Good Friday holiday. The mood feels tentative, with some predicting recession amid the Federal Reserve's aggressive pivot toward faster, higher rate hikes. There is also counter-talk of a resilient economy, with rising corporate earnings and steady consumer spending. Last week, the Dow Jones Industrial average fell 0.3%, the S&P 500 1.3%, and the Nasdaq Composite 3.9%. Year-to-date, the numbers continue to show red, with the Dow down 4.4%, the S&P 500 off 5.8%, and the Nasdaq back in correction territory, down 12.4%. On Friday, the Dow gained 0.4%, the S&P 500 lost 0.3%, and the Nasdaq fell 1.3%.