This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

In this edition, diving into mining in China; initiating coverage of Amer Sports; watching the waves in the cruise line industry; and Ericsson, Estee Lauder Companies, and GE HealthCare.

In this edition, diving into mining in China; initiating coverage of Amer Sports; watching the waves in the cruise line industry; and Ericsson, Estee Lauder Companies, and GE HealthCare.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

Markets are flat at midday. There's no drama. Yet. 'Not Yet' is also the theme of Federal Reserve Chairman Jerome Powell's testimony on Capitol Hill today. He is being grilled by Washington lawmakers on the state of the economy and everyone wants to know when the Fed will feel comfortable cutting interest rates. This is Powell's semiannual update. Today he testifies to the Senate and tomorrow he visits the House.

Markets are flat at midday. There's no drama. Yet. 'Not Yet' is also the theme of Federal Reserve Chairman Jerome Powell's testimony on Capitol Hill today. He is being grilled by Washington lawmakers on the state of the economy and everyone wants to know when the Fed will feel comfortable cutting interest rates. This is Powell's semiannual update. Today he testifies to the Senate and tomorrow he visits the House.

Uneasy Calm at Mid-Year As the final trading week of the 2024 first half gets underway, the stock market is in solid shape but investor sentiment seems frayed. Both business leaders and consumers are uneasy about the months ahead, given clear signs of slowing consumer spending, still-soft purchasing managers' sentiment, and the pending elections. Technically, the stock market appears overdue for a shakeout. It's not all doom and gloom. The upcoming earnings season is likely to be the best in at least two years. Accelerating earnings growth is preventing the market from stretching into deep overvaluation territory even as stocks repeatedly hit new highs. Although economic activity may have slowed from 2022-2023 levels, stabilization in global supply chains means the U.S. economy may be sending signals that are more accurate and operating at a more sustainable level of activity. And notably, recent inflation data (CPI and PPI) finally showed improvement from recently stalled levels. Mixed Signals from the Economy The biggest driver of economic activity in the U.S. remains the consumer, responsible for over two-thirds of final sales. After carrying the economy through the pandemic, the supply chain crisis, and the Fed's rate-hiking cycle, the consumer is finally showing signs of exhaustion. Retail sales in May were tepid for the second straight month. Retail sales for April, originally reported as unchanged from March levels, were revised to down 0.2% month-over-month. Economists expected a 0.3% recovery in May from weak April levels; instead, retail sales edged up just 0.1%. On a year-over-year basis, retail sales were up 2.3%; that is down from consistent mid- to high-single-digit annual growth across 2023. According to the Commerce Department, the weakness partly reflected a 2.2% decline in sales at gasoline stations due to lower gas prices. Sales of vehicle and car parts were up 8%. Sales also improved at clothing stores and for sporting goods, hobbies, books and musical instruments. Non-store retail (eCommerce) continues to outshine physical retail, rising 0.8% for May and 6.8% year over year. By contrast, industrial production showed recovery strength in May. Industrial Production rose 0.9% month over month, much better than the 0.3% consensus forecast and up from 0.0% in April. Manufacturing output rebounded to 0.9% growth after declining 0.3% in April. And May Capacity Utilization was 78.7%, still below the long-run average but up half a point from April. Offsetting weakness in Mining output, Utility output should keep overall industrial production strong through the hot summer months. Besides the GDP, the leading indicators index (LEI) is one of just a few indicators that straddle the business and consumer economy. According to the Conference Board, the May LEI index fell 0.5%, driven primarily by a decline in new orders, weak consumer sentiment, and lower building permits. The six-month trend in the LEI is down 2.0% - actually an improvement from down 3.4% over the preceding six-month period. According to the Conference Board, the six-month trend in LEI does not currently signal a recession despite its 'firmly negative' tone. As noted, an ongoing drag on LEI is the housing economy. Based on SAAR (seasonally adjusted annual rate), existing and new home sales are currently running at about 60%-65% of peak levels achieved from late 2020 through 2021-2022. Existing home sales, which reached a peak SAAR of 6.6 million in January 2021 and were still as high as 6.43 million a year later in January 2022. The most recent reading from May 2023 showed the existing homes SAAR at 4.11 million - 62% the peak level. New home sales reached a peak SAAR of 1.03 million in October 2020, as the migration of young millennial families from cities to suburbs reached its zenith. As of April 2024, new home SAAR of 634,000 was also running at 62% of peak levels. The new home SAAR actually bottomed at 519,000 in July 2022, which coincided with peak inflation readings from June 2022. With the exception of home prices, most other indicators from the housing economy are well below past peaks. Housing starts and permits peaked in the 2020-21 timeframe, with permits for all of 2021 reaching 1.74 million. The most recent permits SAAR, from May 2024, was 1.39 million. Housing starts, which peaked in the 1.60 million range in 2021, were reported at a 1.28 million SAAR for May 2024. The Housing Market Index compiled by the National Association of Homebuilders (NAHB) and Wells Fargo popped to the high-70% range in fall 2020, peaked at 90 in November 2020, and remained in the mid-80s through high-70s through early 2022. As of June 2024, the NAHB's Housing Market Index was at 43. While that is as low for 2024, this series actually hit bottom in the low 30s late in 2022. Volatility in the Housing Market Index, in our view, represents builders' premature expectations and disappointment on the timing of the Fed's first rate cut. Waiting on the Fed Like builders, consumers, investors and pretty much everyone are hanging on the timing of the Fed's first rate cut in the cycle. Argus Fixed Income Strategist Kevin Heal, assessing the Fed's notes from its June FOMC meeting, still expects two rate cuts in 2024, each a quarter point and coming at the September and December meetings. Kevin has held firm in his two-cuts forecast despite the headline change in the dot-plot from likely two cuts to likely one cut by year-end 2024. Although the Fed is supposedly above politics, politicians are not; and they are increasingly conveying the message that low-income and even moderate-income consumers are severely under pressure from high prices and high interest rates. Kevin believes that any further progress on inflation, including a favorable core PCE price index for May, would provide the Fed with sufficient confidence to start its rate-cutting cycle in September 2024. Conclusion Heading into mid-year 2024, year-to-date total return for the S&P 500 is just above 15%; the Nasdaq is up about 18%; and the DJIA is a deep laggard with a 5% gain. Our principal concern currently is further narrowing in the market advance. Exiting April 2024, as many as eight sectors were approximately tracking the S&P 500's year to date gain. As mid-year approaches, two sectors - Information Technology and Communication Services - are pulling away with 25%-29% YTD gains. While Utilities and Financial are delivering low-double-digit total return for 2024 to date, both lag the S&P 500 by over three percentage points. And every other sector is even further behind the broad market. We would like to see a broader market advance across sectors. Right now, it's Nvidia's world, and everyone else is just living in it. Until the AI spell is broken, market participation is likely to remain narrow - contributing to the unease that continues to characterize this otherwise healthy stock market advance.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

Monday Tee Up: Jobs and the Fed

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

In 2023, the S&P 500 climbed almost 24%, skewed heavily by a handful of tech and consumer stocks that recovered from the pandemic. The top-10 stocks in the Argus Universe advanced, on average, 180%, while the top-20 rose 140%. The average stock rose 17%, and the median stock advanced 7%. The average BUY-rated stock increased 20%, while the average HOLD-rated stock gained 8%. Will investors continue to favor growth in 2024? Will small-caps reverse their recent thrust as the risk of recession puts a premium on clean balance sheets? Investors seeking value are encouraged to focus on dividends and yields in the 3%-4% range. As for small-caps and international stocks, valuations remain depressed -- and these group looks to offer value into 2024 as market breadth likely widens. Below are the top-10 performers from the Argus Universe last year, with representatives in six of the 11 major sectors, as well as the bottom-five performers.

Weekly Tee Up: Happy Holidays!

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

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 Wednesday morning amid continued concerns about rising Treasury yields and 'higher for longer' interest rates. Investors also weighed the ouster of House Speaker Kevin McCarthy, which raised prospects for another potential government shutdown next month. Employment data was lower than expected. Payroll provider ADP said that U.S. companies added 89,000 payroll jobs in September, down from 180,000 in August and below the Reuters consensus forecast of 153,000. The Dow fell 0.3%, the S&P fell 0.1%, and the Nasdaq rose 0.4%. Crude oil fell more than 3% to $86 per barrel, while gold fell $9 to $1833 per ounce.

Weekly insider-sentiment data from Vickers Stock Research is almost exactly what we'd expect at the start of earnings season. Almost. Transaction volume is low, as many insiders are unable to trade while they await earnings reports. Eight-week sell/buy ratios from Vickers are of little concern, reflecting previous bullish trading activity that became more cautious as insiders came closer to the blackout period. And finally, Vickers overall Insider Index, which reflects transactions over six months, has flat-lined ahead of earnings.

Stocks started a new bull market in 2Q23, as the S&P 500 climbed 20% above bear-market lows from last October. For the quarter, the index climbed about 8%. Performance was narrow in 2Q, led by last year's laggard sectors, including Communication Services, Consumer Discretionary, and Technology. Last year's top-performing sector, Energy, and the Utility sector, were the worst performers in 2Q23. The average stock in the diversified Argus Universe of Coverage rose 4% in the quarter, and the median stock advanced 2%. The average Argus BUY-rated stock rose 5.7%, while the average HOLD-rated stock gained 1.2%. We recently raised our sector rating on Consumer Discretionary to Over-Weight, as the employment environment is strong. We also look for a pick-up in EPS growth in Communication Services and Technology, and expect these groups to pace broad market performance. Below are the top 10 performers from the Argus Universe in 2Q23, many from Technology and Communication Services. After that, we list the bottom five performers.

Historical insider-sentiment data from Vickers Stock Research indicates that when short-term (one-week) and long-term (eight-week) proprietary sell/buy ratios from Vickers align in bullish territory (below 2.00), stocks outperform over the next one to six months. Back on May 1, Vickers' data indicated the start of a bullish-sentiment trend and, indeed, that led to the needed alignment (which carried on for six weeks.) During that time, the S&P 500 gained over 4% and the Nasdaq popped almost 10%.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

The stock market has held up again (as of this writing!), despite additional bearish news about the global banking system. This time, Europe imploded (after already having booked a nasty decline). Indeed, once contagion starts, it generally does not stop on a dime -- but rather continues down an increasingly negative path.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

In this edition, our coverage of Great-West gets new life, consumers can get some good buys despite inflation, travel still tops consumer wish lists, and Albertsons, Exact Sciences, and Taiwan Semiconductor.

Since we last commented on insider-sentiment data supplied by Vickers Stock Research, a new year has begun -- and investors over the past two weeks were able to deploy strategies that first reflected end-of-year positioning and then reflected start-of-year considerations. As 2022 came to a close, weekly data from Vickers showed that insiders were optimistic. Now we want to see if corporate executives, directors and beneficial owners remain confident about the year ahead. That has us focused on the broader sentiment indicators that are less reliant on the unique events associated with a rollover in the calendar.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

Stocks fell sharply on Thursday even after paring losses in late trading. The selloff was driven in part by an upward revision in third-quarter GDP, which raised prospects for continued aggressive Fed rate hikes. Investors also weighed a weak earnings report and disappointing guidance from Micron Technology, and weekly employment data. The Labor Department said that first-time claims for state unemployment benefits rose by 2,000 to 216,000 for the week ended December 17, below the Reuters consensus of 222,000. The Dow fell 1.05%, the S&P 1.45%, and the Nasdaq 2.18%. Crude oil traded near $78 per barrel, while gold fell to $1801 per ounce.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

Stocks rallied on Monday morning on the first trading day of the fourth quarter, as investors hoped for a course correction after a dismal 3Q. Manufacturing data was weaker than expected. The Institute for Supply Management said that its purchasing managers' index fell to 50.9 in September, down from 52.8 in August and below the Reuters consensus forecast of 52.3. The reading was the lowest in more than two years. Tesla shares fell 8% after the company reported lower-than-expected vehicle deliveries in 3Q. The Dow rose 2.1%, the S&P 1.8%, and the Nasdaq 1.3%. Crude oil rose more than 4% to $83 per barrel, while gold jumped $25 to $1697 per ounce.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

Monday Tee-Up: GDP Plus Inflation

In this edition, ServiceNow well-poised, electric components on verge of a surge, Illumina's shares have fallen, and Bayer, Carnival, and Kellogg.

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 Friday morning as investors continued to assess the pace and impact of Fed rate hikes. St. Louis Fed President James Bullard said that he wanted to see a 3.0%-3.25% Fed funds rate in the second half of the year, adding to recent hawkish statements from other Fed officials. The Commerce Department reported that U.S. wholesale inventories rose 2.5% in February, up from its prior estimate of 2.1% growth and up from 1.2% in January. The Dow rose 0.7%, the S&P rose 0.2%, and the Nasdaq fell 0.7%. Crude oil fell 1% to $97 per barrel, while gold traded near $1949 per ounce.

Small- and mid-cap stocks (SMID stocks) have underperformed large-caps over the past 12 months, but still may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine. As well, the prices of SMID stocks generally are lower than the prices of large-caps. That said, SMID stocks can be risky and large-caps outperformed SMID stocks in 11 of the 19 years in our test period. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 12%-15% of the U.S. stock market's capitalization is comprised of SMID stocks. For our purposes, we use a threshold of $20 billion to define a SMID stock.

This edition features our different tune on Sirius XM, credit card company calculations, China equities, and GoodRx, Carnival, and Adobe.

Stocks rose strongly on Thursday as investors continued to assess the Fed's rate hike plans along with developments in Ukraine, where the war with Russia entered its second month. Employment data was better than expected. The Labor Department said that first-time claims for state unemployment benefits fell to 187,000 for the week ended March 19, down from 215,000 a week earlier and below the Bloomberg consensus of 210,000. Continuing claims of 1.35 million were also down from the prior week and below consensus. Core capital goods orders fell 0.3% in February after rising 1.3% in January, driven by lower orders for transportation equipment. The Dow rose 1.02%, the S&P 1.43%, and the Nasdaq 1.93%. Crude oil traded near $111 per barrel, while gold rose $25 to $1963 per ounce.

Stocks rose strongly on Thursday as investors continued to assess the Fed's rate hike plans along with developments in Ukraine, where the war with Russia entered its second month. Employment data was better than expected. The Labor Department said that first-time claims for state unemployment benefits fell to 187,000 for the week ended March 19, down from 215,000 a week earlier and below the Bloomberg consensus of 210,000. Continuing claims of 1.35 million were also down from the prior week and below consensus. Core capital goods orders fell 0.3% in February after rising 1.3% in January, driven by lower orders for transportation equipment. The Dow rose 1.02%, the S&P 1.43%, and the Nasdaq 1.93%. Crude oil traded near $111 per barrel, while gold rose $25 to $1963 per ounce.

Wednesday was just an average "Fed Day." Move on folks, there's nothing to see here! At about 10:18 a.m., the S&P 500 was up 85 points or 2%. Market breadth was very strong and it looked like we might get a very important 80%+ day. The index then flattened out and lost ground, and then actually went negative following the release of the Fed minutes. But in the blink of the eye, the index was back -- ultimately finishing 95 points higher. So we got an 80%+ breadth day.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

The entire Treasury curve has continued to move higher, with yields back to pre-pandemic levels. The 10-year yield hit an intraday high of 1.97% on Tuesday, the highest level since November 2019. The 10-year recently broke above key chart support in the 1.70% area and, in the process, completed a large cup-with-handle that started two years ago. The next area of chart support is between 1.95% and 2.07%. Despite the pop toward 2% by the 10-year, stocks did just fine -- with the S&P 500 rising 0.8% and the Nasdaq adding 1.3%. Obviously, the stock market knows higher rates are coming and likely has discounted the event by now.

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.