Monday Tee Up: Here Comes Big Tech

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 rose on Thursday, as a very encouraging advance estimate of fourth quarter U.S. GDP was more than enough to offset initial gloom brought on when Tesla disappointed investors with earnings news. The Dow Jones Industrial Average was up 0.6%, the S&P 500 was higher by 0.5%, and the Nasdaq inched up by 0.2%. So far this week, the S&P 500 is up 1.1%, the Dow is up 0.5%, and the Nasdaq is higher by 1.3%. Personal Consumption Expenditures for December will be reported this morning, offering new clues as to likely action (or non-action) from the Fed at the next policy meeting. In the most-recent report, through November, PCE inflation was reported at 2.6% (the latest CPI report, through December, had inflation at 3.4%). Core PCE, which removes volatile food and energy prices, was 3.2% in the latest month, down from 3.4% in the prior month. Our forecasts call for 2.7% for the headline number and 3.0% for the core.

Monday Tee Up: Here Comes Big Tech

Last week, we noted that weekly insider-sentiment data from Vickers Stock Research was 'almost' exactly what we'd expect at the start of earnings season, with insiders cautiously positioning themselves for weeks in which they would be on the sidelines because of trading restrictions. But our 'almost' was the result of a significantly bearish one-week sell/buy ratio from insiders at companies that trade on the Nasdaq. That ratio was 13.20 on a scale where anything over 2.50 is bearish, and we wondered if insiders were concerned about a 'buy the rumor, sell the fact' response from investors once earnings reports started to flow in. Now, we can comment on what was indeed a volatile week for the Nasdaq - one that did not overly impact the broader index itself, but did feature headline-grabbing drops for some high-profile stocks.

The volume of weekly insider transactions processed by Vickers Stock Research remains exceedingly low, this as the volume of earnings reports remains exceedingly high. Indeed, corporate executives, directors, and beneficial owners currently are broadly restricted from trading as the companies they represent are releasing material nonpublic information. This week, some 560 transactions meet the criteria for inclusion in Vickers' Weekly Insider Report, compared to around 1800 fillings before the current restrictions kicked in several weeks ago. The last time weekly transaction volume was this low was in the very early days of 2023, just ahead of the 4Q22 earnings season.

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.

In this edition, global oil inventories face future; feeling the internet's backbone; and initiating coverage of Qualys; and Lithium Americas, Bausch & Lomb and Macy's.

In this edition, railroads may be in for a bumpy ride; ESG has some opportunities; biotechs innovate; and Constellation Brands, Autodesk, and Tencent.

In this edition, railroads may be in for a bumpy ride; ESG has some opportunities; biotechs innovate; and Constellation Brands, Autodesk, and Tencent.

Monday Tee Up: Data Hat Trick Includes the Fed, Jobs, and Earnings

Monday Tee Up: Earnings, Inflation Data, and GDP

The S&P 500 made its all-time closing high at 4,796.56 on January 3, 2022, and its cycle low at 3,666.77 on June 16, 2022. The midpoint between those two metrics is in the 4,230 area, and that is where the market found itself at the close of the last trading week (as the "500" finished at 4,228.48).

Earnings from major companies will continue on Friday, with 2Q reports from Twitter, Verizon, and Schlumberger. On Thursday, stocks extended their winning streak, with strong gains in the Consumer Discretionary and Healthcare sectors. Tesla shares rose nearly 10% following strong 2Q results, while AT&T fell more than 7%, despite above-consensus earnings, after management lowered its free cash flow guidance. On the employment front, first-time claims for state unemployment benefits rose to 251,000 for the week ended July 16, up from 244,000 a week earlier and above the Bloomberg consensus estimate. The Dow rose 0.51%, the S&P 0.99%, and the Nasdaq 1.36%. Crude oil fell more than 3% to $96.50 per barrel, while gold rose 1% to $1718 per ounce.

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 have now come in from 1Q22. We like to 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 in recent years 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 the data from Vickers.

Stocks have struggled this year, with the S&P 500 now down over 12% (excluding dividends) so far in 2022. But not every stock has tumbled. Our analysts have been working through earnings season and have come across several stocks in Argus coverage that have approached target prices. We set target prices through our valuation framework, which includes analysis of historical multiples, peer multiples, and future dividends and cash flows. After adjusting the models for the latest earnings and dividend information -- most of which has been good -- here are some of the stocks for which we have raised target prices over the past month. All of the following stocks are rated BUY at Argus.

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.

While stocks continue to trade downward, insider sentiment remains generally benign. Indeed, the overall Insider Index from Vickers Stock Research is resting at its most-attractive level since November 2020. Broadly speaking, insiders have maintained a sense of calm during the selloff, with data from Vickers suggesting no panic. Still, despite the unthreatening sentiment and the reduction in stock multiples, there is also no evidence that insiders have started to 'buy the bottom.' We'll watch carefully for any signs that insiders are ready to jump in -- but also note that many of these investors are currently sidelined by trading restrictions that are in place during earnings season.

Over the weekend, the House of Representatives approved the largest public works bill since the 1950s. The bipartisan trillion-dollar bill, which was passed by the Senate in August, now goes to President Biden's desk for signing. The plan focuses on improving the country's infrastructure, from roads and bridges to water systems and electricity grids. It also targets the auto industry, with a focus on electric vehicles and charging stations. In the power sector, Biden's goal is to achieve a carbon-free power industry by 2035. To improve energy efficiency in buildings, he is looking to retrofit four million buildings in the four years. Elsewhere, business Services companies also stand to benefit; bond issuance should pick up given that the infrastructure spending plan will be financed at least in part by bonds; and payroll companies could get a boost processing more paychecks as the infrastructure plan creates "millions of good paying jobs." All-in-all, some of the companies that we think may benefit include the following.

The S&P 500 forged higher for a sixth straight day on Thursday. The index, which posted its first-ever close above 4,600 on 10/29/21, is already within striking distance of 4,700. Momentum in the market has escalated meaningfully.

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 finished mostly higher on Thursday as investors weighed earnings reports from a range of major companies along with new employment data. First-time unemployment claims fell to 290,000, down from the prior week and below consensus. Continuing claims dropped to 2.481 million from 2.603 million a week earlier, and were also below the consensus forecast. Housing data was strong. The National Association of Realtors said that sales of existing homes rose 7% in September to a seasonally adjusted annual rate of 6.29 million, up from a decline of 2% in August and above the consensus estimate calling for 3.7% growth. The Dow fell 0.02%, the S&P rose 0.30%, and the Nasdaq rose 0.62%. Crude oil fell 1% to $82.50 per barrel, while gold fell slightly to $1784 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.

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 stock market moved higher last week as the market digested a busy earnings week. Tech stocks outperformed blue chips as earnings came in very strong in portions of the tech sector. During Friday's session, the Dow Jones Industrial Average increased 238 points, or 0.68%. The S&P 500 was up 1.01%, and the Nasdaq Composite was up 1.04%. For the week, the DJIA was up 374 points, or 1.08%, the S&P 500 was up 1.96%, and the Nasdaq Composite was up 2.84%. Year-to-date, the DJIA is up 14.56%, the S&P 500 is up 17.46%, and the Nasdaq Composite is up 15.12%.

The stock market moved higher last week as the market digested a busy earnings week. Tech stocks outperformed blue chips as earnings came in very strong in portions of the tech sector. During Friday's session, the Dow Jones Industrial Average increased 238 points, or 0.68%. The S&P 500 was up 1.01%, and the Nasdaq Composite was up 1.04%. For the week, the DJIA was up 374 points, or 1.08%, the S&P 500 was up 1.96%, and the Nasdaq Composite was up 2.84%. Year-to-date, the DJIA is up 14.56%, the S&P 500 is up 17.46%, and the Nasdaq Composite is up 15.12%.

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 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 little changed on Thursday morning following new employment and housing market data. The Labor Department said that first-time claims for state unemployment benefits fell to 547,000 for the week ended April 17, down from 586,000 a week earlier and below the Bloomberg consensus forecast of 610,000. The National Association of Realtors said that existing home sales fell 3.7% to an annualized 6.01 million in March. The reading was the weakest since August 2020 and below the consensus forecast of 6.19 million. The Dow fell 0.2%, the S&P was flat, and the Nasdaq rose 0.2%. Crude oil fell slightly to $61 per barrel, while gold traded near $1787 per ounce.

President Joe Biden is preparing to announce an infrastructure-rebuilding plan that he estimates will create up to 10 million clean energy jobs. The following areas of the economy stand to benefit from the government spending, which could total as much as $4 trillion. The first element of the plan is improving the country's infrastructure, from roads and bridges to water systems and electricity grids.

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 stock market moved higher during the shortened week, as investors appeared to embrace the Biden administration's early actions. Large-cap tech stocks outperformed blue chips as investors embraced risk. During Friday's session, the Dow Jones Industrial Average fell 179 points, or 0.57%. The S&P 500 was down 0.30%, and the Nasdaq Composite was up 0.09%. For the week, the DJIA increased 183 points, or 0.59%, the S&P 500 rose 1.94%, and the Nasdaq Composite rallied 4.19%.