As global markets struggle in the environment of higher interest rates, renewed conflict in the Middle East, and the lingering battle between Russia and Ukraine, one thing has not changed: foreign stocks are cheaper than U.S. stocks. And with the large run-up in late 2023 and first quarter of 2024, U.S. stocks are even more expensive. Consider P/E ratios. The trailing P/E ratio on the S&P 500 is 26, above the global average of 14 and well above the 6-12 average P/Es for stocks in emerging markets. A review of yields tells a similar story. The current dividend yield for the S&P 500 is 1.3%, versus the global average of 2.8% and Asian, Australian, and Latin American yields of 2%-5%. The foreign region that does not completely fit the pattern is the Middle East. The average P/E on a Saudi Arabian stock is a high 18.1 and the yield is a low 2.3%. This can be attributed to high oil prices. Taking a step back, investors generally are willing to pay a higher price for North American securities because of the transparency of the U.S. financial system as well as the liquidity of U.S. markets. What is more, global returns can be volatile across individual countries, given currency, security, political, and geopolitical risks. Indeed, U.S. stocks (ETF SPY) have outperformed EAFE (ETF EFA) over the past year as well as over the past five years. Even so, we recommend that growth investors have approximately 5%-10% of their equity allocations in international stocks to take advantage of the value, and we have been adding global stocks to our Universe of Coverage.

Markets moved higher on Wednesday morning on ISM data. Services PMI increased to 51.4% in March. Prices paid hit the lowest level since March 2020. The focus will now be on Fed Chair Powell, who will speak later today. Treasury yields are rising. The S&P 500 rose 0.4%, the Dow was up less than 0.1% and the Nasdaq gained 0.3%. Crude oil traded above $85 per barrel and gold was up $23 to $2305 per ounce.

We see what we believe are some great opportunities right now in Healthcare -- and we like the sector overall. Argus Director of Research Jim Kelleher, CFA, recently completed his quarterly sector review and raised Healthcare sector to Over-Weight from Market-Weight. The healthcare environment is undergoing rapid transitions, and we now see an unfolding period of significant promise and opportunity. Our newly-favored stance is based on resumption of deferred medical procedures and significant new quality-of-life drugs and treatments. The category is broad and has underperformed the S&P 500 over the past year. The Healthcare sector ETF (XLV) is up 15% over the past year compared to a gain of 31% for the S&P 500. We see opportunity here to pick up some steady companies, with big brands and solid financials. These companies are science-focused and enhance lives. They are innovators. In our list this week, we look across several subsectors within the Healthcare sector and pull out some leaders we like. These stocks also are included in our Focus List and Model Portfolios, as noted below.

Value stocks -- a market segment that includes high-yield stocks -- outperformed growth stocks in 2022. That's a recent rarity, as for the past decade-plus, the performance record has favored growth. But the tide turned in 2022. The rollout of COVID-19 vaccines gave a lift to some of the cyclical companies (energy and regional banks) that had lagged in recent quarters, and value stocks outpaced growth stocks that year. While growth stocks have retaken the lead since 2023, the Federal Reserve continues to keep interest rates high to fend off inflation. This could possibly cap multiple expansion for growth companies in coming quarters. In any event, the value sector is the place to achieve income.

Stocks were lower on Tuesday morning. Yesterday's tech rally reversed following a profit warning from Samsung. Juniper Networks (JNPR) shares are up on news that Hewlett Packard (HPE) was in talks to acquire Juniper. The Dow fell 0.6%, the S&P 500 0.3%, and the Nasdaq is down 0.1%. Crude oil rose to $72 per barrel, while gold traded near $2035 per ounce.

Global stocks are picking up the pace. While the S&P 500 has jumped almost 11% in the past month, the EAFA index of large- and mid-cap stocks based in countries other than the U.S. and Canada has risen 10%. Over the past six years, the performance gap has been wider, with the S&P 500 advancing 12% compared to a 7% gain for the EAFE. But the underperformance has given global stocks a valuation advantage, particularly in the area of dividends. The EAFE dividend yield of 2.4% is 80 basis points higher than the comparable S&P 500 dividend yield. We think global dividend stocks now offer opportunity, particularly given the endless speculation over the direction of interest rates in the U.S., which has created market-timing headaches for equity income investors. Those investors have endured recent wide swings in prices for rate-sensitive equity sectors such as Utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this asset class for U.S. investors, including a wide selection of companies that pay dividends, robust industry diversification, and, as we have mentioned, higher yields and lower valuations. Argus has recently boosted its global coverage, and recommends the following international dividend stocks, each of which has at least a long-term HOLD rating from an Argus analyst.

Value stocks -- a market segment that includes high-yield stocks -- outperformed growth stocks in 2022 for the first time since 2016. Indeed, for the past decade, the performance record has favored growth. But the tide turned in 2022. The rollout of COVID-19 vaccines gave a lift to some of the cyclical companies (energy companies and regional banks) that had lagged in recent quarters, and value stocks outpaced growth stocks over the past year. Meanwhile, the Federal Reserve continues to lift interest rates to fend off inflation, which could possibly cap multiple expansion for growth companies for a few more quarters. Regardless, the value sector is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 2.2%, compared to the 0.9% current yield on the iShares Russell 1000 Growth Index ETF. For our High-Yield Theme Model Portfolio, we are seeking stocks with yields of at least 3.0%. This moves us deep into the value segment of the market.

Value stocks -- a market segment that includes high-yield stocks -- outperformed growth stocks in 2022 for the first time since 2016. Indeed, for the past decade, the performance record has favored growth. But the tide turned in 2022. The rollout of COVID-19 vaccines gave a lift to some of the cyclical companies (energy companies and regional banks) that had lagged in recent quarters, and value stocks outpaced growth stocks over the past year. Meanwhile, the Federal Reserve continues to lift interest rates to fend off inflation, which could possibly cap multiple expansion for growth companies for a few more quarters. Regardless, the value sector is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 2.2%, compared to the 0.9% current yield on the iShares Russell 1000 Growth Index ETF. For our High-Yield Theme Model Portfolio, we are seeking stocks with yields of at least 3.0%. This moves us deep into the value segment of the market.

As of the close on Friday, August 18, the major indices had fallen in three consecutive weeks for the first time since December 2022, when they all fell four weeks in a row. The Nasdaq fell to its key 21-week exponential average (EMA) on that Friday and bounced, while the S&P 500 was within 10 points of its 21-week EMA before bouncing. The Nasdaq 100 (QQQ) got within four points of the average and popped. Rebounds on Friday did nothing to erase the short-term downtrends, as the 10- and 21-day EMAs for the indices are above declining price and the indices all undercut their 50-day.

Stocks fell on Wednesday morning amid hawkish comments from Fed Chair Jerome Powell at the start of two days of Capitol Hill testimony. In remarks released before his appearance, Mr. Powell said that the process of controlling inflation still had 'a long way to go,' and that nearly all FOMC members believed that further rate hikes would be appropriate by the end of the year. On the earnings front, FedEx shares fell after the company posted mixed fiscal 4Q results, including a sharp drop in daily package volume, and offered disappointing earnings guidance for FY24. The Dow fell 0.2%, the S&P 0.4%, and the Nasdaq 0.9%. Crude oil traded near $72 per barrel, while gold fell $8 to $1940 per ounce.

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.

Monday Tee Up: Banks, Inflation, GDP

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

Value stocks -- a market segment that includes high-yield stocks -- outperformed growth stocks in 2022 for the first time since 2016. Indeed, for the past decade, the performance record has favored growth. But the tide turned in 2022. The rollout of COVID-19 vaccines gave a lift to some of the cyclical companies (energy companies and regional banks) that had lagged in recent quarters, and value stocks outpaced growth stocks over the past year. Meanwhile, the Federal Reserve continues to lift interest rates to fend off inflation, which could possibly cap multiple expansion for growth companies for a few more quarters. Regardless, the value sector is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 2.2%, compared to the 0.9% current yield on the iShares Russell 1000 Growth Index ETF. For our High-Yield Theme Model Portfolio, we are seeking stocks with yields of at least 3.0%. This moves us deep into the value segment of the market.

Global stocks are on a run. While the S&P 500 has jumped almost 8% year-to-date, The EAFA Index of large- and mid-cap stocks based in countries other than the U.S. and Canada has risen 9%. Over the past six months, foreign stocks also have outperformed, climbing 11% versus a 1% decline by the U.S. market. The story is different over the past five years, as the S&P 500 has risen 50% and global stocks have fallen 1%. Even so, the long outperformance has given global stocks a valuation advantage, particularly in the area of dividends. The EAFE dividend yield of 2.7% is 100 basis points higher than the comparable S&P 500 dividend yield. We think global dividend stocks now offer opportunity, particularly given the endless speculation over the direction of interest rates in the U.S., which has created market-timing headaches for equity income investors - who have endured recent wide swings in prices for rate-sensitive equity sectors such as utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S. interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this asset class for U.S. investors, including a wide selection, robust industry diversification, and, as we have mentioned, higher yields and lower valuations. Argus recently boosted its global coverage, and recommends the following international dividend stocks, each of which has at least a long-term BUY rating from an Argus analyst. This list of approximately 25 companies offers exposure to eight of the 11 major industrial sectors. The list includes companies from 10 countries.

Eight Fundamental Forecasts for 2023

After rallying across July and most of August, the stock market fell hard on Monday, posting its worst single-day loss since June. In that month, stocks fell hard on bad inflation data. This time, there was no evident driver of the selloff, except potential profit-taking after strong gains were logged over the past six weeks.

Monday Tee-Up: Inflation, GDP, Retail Earnings, Jackson Hole

Value stocks -- a market segment that includes high-yield stocks -- are outperforming growth stocks in 2022 for the first time since 2016. Indeed, for the past decade, the performance record has favored growth. In nine of the past 10 years, growth stocks have topped value stocks. But the tide may be turning. The rollout of 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 year. Now, the Federal Reserve lifting interest rates to fend off inflation, which will likely cap multiple expansion for growth companies. Regardless, the value sector is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 2.1%, compared to the 0.8% current yield on the iShares Russell 1000 Growth Index ETF. For our High-Yield Theme Model Portfolio, we are seeking stocks with yields of at least 3.0%. This moves us deep into the value segment of the market.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based income investors have experienced a high degree of volatility in recent years, as the Federal Reserve since 2018 has embarked on two campaigns to raise interest rates, sandwiched around a desperate program that lowered the federal funds rate to zero in order to help the economy recover from the pandemic. The endless speculation over the direction of rates has created market-timing headaches for equity income investors. They have endured wide swings in prices for rate-sensitive equity sectors such as Utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this asset class for U.S. investors, including a wide selection, robust industry diversification, higher yields, and lower valuations. Argus has recently boosted its global coverage, and recommends the following international dividend stocks. Note this list of 25 companies offers exposure to eight of the 11 major sectors. The list includes companies from 10 countries.

We are lowering our intermediate-term technical outlook back to bearish and lowering our long-term technical outlook to neutral. The S&P 500 has lost the 3,800 region, which opens the door for a decline down to the 3,200-3,500 area. There is a confluence of technical support near 3,500, including the important 200-week average. It also represents a 50% retracement of the rally off the pandemic lows, as well as trendline support off the 2010 lows when projecting out into the second half of 2022. If the 3,500 region gives way, the next area of support is down at 3,200, which represents a 61.8% give back of the entire rally.

In this edition, Skyworks soars, Big Biopharma builds immunity to headwinds, and Baidu and the cloud; and Harmonic Drive Systems, Elekta, and Nabtesco.

Reading the Tea Leaves on Consumers

Tuesday was another wild day in the stock market, as investors gear up for today's CPI and Thursday's PPI. Never a dull moment in 2022! The S&P 500 was up over 75 points in the first five minutes (almost 2%) while the Nasdaq and the QQQs were up almost 3%. By 11:00, all three indices were lower, with the "500" off 35 points. By 2:00, the "500" was back up by almost 50 points, and then gave that up, finishing with a small gain.

This edition features ESG pitfalls amid mineral resources, the outflow of nurses from the healthcare industry, growth in agriculture, and Liberty Global, Sanofi, and BT Group.

Market Seeks Footing amid Interest Rate Turbulence

Value stocks -- a market segment that includes high-yield stocks -- are outperforming growth stocks in 2022. For the past decade, the performance record has favored growth, but the tide may be turning. The rollout of 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 year. Now, the Federal Reserve is poised to lift interest rates to fend off inflation, which will likely cap multiple expansion for growth companies. Regardless, the value sector 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. For our High-Yield Theme Model Portfolio, we are seeking stocks with yields of at least 3.0%. This moves us deep into the value segment of the market.

Stocks edged higher on Tuesday morning after a strong rally on Monday as investors weighed new manufacturing and employment data. The Institute for Supply Management said that its national factory index fell to 57.6 in January, down from 58.8 in December and just above the Bloomberg consensus forecast of 57.5. In its JOLTS report, the Labor Department said that job openings rose to 10.925 million at the end of December, up from 10.775 million a month earlier and well above the consensus forecast of 10.3 million. The Dow rose 0.1%, the S&P 0.1%, and the Nasdaq 0.3%. Crude oil fell below $88 per barrel, while gold rose $9 to $1806 per ounce.

The stock market moved higher last week as earnings season kicked off. Tech stocks outperformed blue chips, though both performed well. During Friday's session, the Dow Jones Industrial Average increased 382 points, or 1.09%. The S&P 500 was up 0.75%, and the Nasdaq Composite was up 0.50%. For the week, the DJIA was up 549 points, or 1.58%, the S&P 500 was up 1.82%, and the Nasdaq Composite was up 2.18%. Year-to-date, the DJIA is up 15.32%, the S&P 500 is up 19.04%, and the Nasdaq Composite is up 15.59%.

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.

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.

The July 19 trading week began with somber discussions of an overdue correction, and stocks wobbled - but investors bought the dip and shares raced to new all-time highs. Although stocks suffered a drubbing on Monday of that week, with the benchmark S&P 500 down 1.6% for the session, they clawed back on Tuesday through Thursday and then staged a big-finish Friday.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. In 2018, the Federal Reserve embarked on an aggressive campaign to raise interest rates, causing Treasury yields to swoop and dive and resulting in a wild ride for supposedly stable U.S. high-income equities. In 2019, the Fed lowered rates in order to restore a normal upward slope in the yield curve. In 2020, global investors, fearing the spread of the coronavirus, pushed rates lower still. Now, in 2021, rates might be headed higher in a few months. The endless speculation over the timing of the Fed's next moves has created market-timing headaches for equity income investors. They have endured wide swings in prices for rate-sensitive equity classes such as Utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase diversity of holdings while reducing sensitivity to the Fed's head fakes on rate policy. Investing in overseas stocks carries its own set of risks, such as currency exchange and even the potential for geopolitical turmoil. But there are also lots of positives in this asset class for U.S. investors, including a wide selection, robust industry diversification, higher yields and lower valuations. Argus has recently boosted its global coverage, adding the following BUY-rated international dividend stocks.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years as the endless speculation over the direction of rates has created market-timing headaches. Investors have endured wide swings in prices for rate-sensitive equity sectors such as utilities, REITs and MLPs. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this segment for U.S. investors.

The dollar rose to new cycle highs in early 2020 before pulling back in recent months. On a real trade-weighted basis, the dollar currently is 8% above the average valuation over the past 20 years, down from a 16% overvaluation in April 2020. The value of the U.S. currency reflects several factors, but primarily the relative strength of the U.S. economy and global investor confidence in the U.S. Federal Reserve and Department of Treasury as the world battles COVID-19. We anticipate a trading range around current levels for the greenback this year. That's because potential improving trends in the euro and pound sterling could attract currency investors. Further, rising U.S. debt levels (in the wake of the recently approved $1.9 trillion fiscal stimulus plan and ahead of another possible $2 trillion or more spending on infrastructure) may deter some global investors from investing in dollar-denominated securities. As well, the lofty valuation of the greenback implies that other currencies -- and even gold or bitcoin -- are possibly undervalued, and traders can be expected to bid up those values over time.

The stock market moved higher last week as earnings season got underway and volatility continued its downward trend. Tech stocks performed roughly in line with blue chips. During Friday's session, the Dow Jones Industrial Average increased 165 points, or 0.48%. The S&P 500 was up 0.36%, and the Nasdaq Composite was up 0.10%. For the week, the DJIA was up 400 points, or 1.18%, the S&P 500 was up 1.37%, and the Nasdaq Composite was up 1.09%. Year-to-date, the DJIA is up 11.74%, the S&P 500 is up 11.43%, and the Nasdaq Composite is up 9.03%.

Stocks fell on Friday morning as a long-awaited fiscal stimulus package remained elusive despite signs that Democrats and Republicans were moving closer to an agreement. Congress is instead likely to first pass another stopgap spending bill that will keep the government running past midnight, while also providing time for additional stimulus negotiations. The package under discussion reportedly includes one-time payments of $600 to most Americans, extended unemployment benefits, help for states in vaccine distribution, and aid for small businesses. The Dow fell 0.6%, the S&P 0.6%, and the Nasdaq 0.3%. Crude oil traded near $49 per barrel, while gold rose $1 to $1892 per ounce.

Dividends are supposed to lend stability to a portfolio. However, U.S.-based equity income investors have experienced a high degree of volatility in recent years. In our view, investing in international income stocks is one way to increase portfolio diversification while reducing sensitivity to volatile U.S interest rates. Investing in overseas stocks carries its own set of risks, including the impact of currency exchange and geopolitical turmoil. But there are also a number of positives in this segment for U.S. investors. One is a more robust selection of high-quality names. Yields also tend to be higher in overseas markets in general. And finally, valuations can be more attractive.