The major market indices are sharply lower and momentum is downward at midday. The Nasdaq is taking the hardest hit. This follows the much-anticipated August Jobs report out this morning. Nonfarm payrolls came in at 142,000 for August, below expectations of 165,000. The unemployment rate edged back down to 4.2% after the surprise jump to 4.3% last month. The markets will continue to spend the day interpreting what this report signals for the health of the U.S. labor market, and how the Fed might interpret the bigger picture of the health of the economy. We at Argus forecast a 25 bps rate cut this month, followed by equal size cuts in November and December, so three cuts in total this year. We believe recent data reinforces our forecast.

Monday Tee Up: Inflation and GDP There are no summer doldrums on Wall Street this week. Key inflation data is pending as is the latest GDP data. The Dow Jones Industrial Average ended last week higher by 1.5%, the S&P 500 gained 0.6%, and the Nasdaq was flat. For the year, the Dow is higher by 4%, the S&P is up 15%, and the Nasdaq has popped 18%. On the economic calendar, Tuesday features the Case-Shiller Home Price Index and Consumer Confidence. On Wednesday, New Home Sales come out. On Thursday, GDP and Durable Goods Orders will be reported. But the big day is Friday when PCE, the Fed's favorite inflation indicator, comes out. In April, PCE printed at 2.7% and core PCE was 2.8%. For May, we forecast both PCE and core PCE will dropped down to 2.6%. Friday also beings updates on Personal Income, Personal Spending, and Consumer Sentiment. At least seven Fed officials have public speaking engagements this week. On the earnings calendar, Fedex and Carnival reported on Tuesday. On Wednesday, Micron Technology, General Mills, Paychex, Jefferies, and Levi Strauss. And on Thursday, Nike, Walgreens Boots Alliance, and McCormick step up to the plate. Overall earnings for 1Q came in 8% higher than in the same quarter last year. That's better than was expected before reporting season started. For 2024 in total, we forecast a 9.5% gain in earnings. Second-quarter earnings season kicks off on Friday, July 12, with the big banks. Last week, mortgage rates dipped further below the 7% mark, dropping to 6.87% for the average 30-year fixed-rate mortgage. Gas prices are still at $3.43 per gallon for the average price of regular gas. The Atlanta Fed GDPNow indicator is forecasting for 2Q and calls for expansion of 3.0%. The Cleveland Fed CPINow indicator is at 3.13% for June. Looking ahead, the next Fed rate decision is at the very end of July, with odds for a cut at 10%. In mid-September, the odds pop to 66%; by November 7, they hit 78%; and by December 18, the odds ring in at 95%. Of note, the Fed's most-recent dot plot implies just one rate cut this year. Despite this, we still believe the Fed will cut twice this year and two more times in 2025.

When it comes to focusing on sectors of the S&P 500, we think it makes sense to focus primarily on a few key sectors that can actually make a difference in terms of earnings and portfolio performance. As an example, the Real Estate sector, which accounts for about 2% of S&P 500 capitalization, is expected to contribute only 1% of S&P 500 EPS during the during the upcoming 2Q24 EPS period (which will kick into gear next month). The Materials sector is another 2% market weight that generates a thin 3% of total earnings. We don't think clients should be spending a lot of time on deep dives trying to get these sectors right. The groups that really make a difference are going to be Information Technology, which is expected to account for 21% of the earnings; and Financial and Healthcare, which are expected to account for 20% and 14%, respectively. Perhaps not surprisingly, these are three sectors in which the United States enjoys competitive advantages versus other nations. At the next tier, the Industrial, Consumer Discretionary and Communication Services sectors all appear in line, with market cap weights and earnings contributions in the 9%-10% range. We note that the Energy sector punches above its weight, accounting for less than 4% of total market capitalization but generating 7% of S&P 500 profits.

Argus has published its latest Portfolio Selector, which features its popular Focus List. Each month, Director of Research Jim Kelleher, CFA, surveys the team of Argus Research industry analysts for their timeliest recommendations out of the company's fundamental universe of approximately 500 stocks. The Focus List typically includes 30 stocks: turnover is high, as Jim typically adds three or four new stocks per month. Below are the latest additions, all of which are rated BUY at Argus.

The Portfolio Selector features the Argus Focus List, a group of 30 "best idea" stocks generated and regularly updated by Argus' analysts and investment policy committee. It also includes the director of research’s monthly investment strategy column, stock recommendations and sector picks, economic forecasts, and an asset allocation model. This month, the Focus List additions are Merck & Co Inc (MRK); Crowdstrike Holdings Inc (CRWD); Mondelez International Inc. (MDLZ); Hewlett Packard Enterprise Co (HPE) and the Focus List deletions are CIENA Corp. (CIEN); General Mills, Inc. (GIS); ServiceNow Inc (NOW); Vertex Pharmaceuticals, Inc. (VRTX).

The Portfolio Selector features the Argus Focus List, a group of 30 "best idea" stocks generated and regularly updated by Argus' analysts and investment policy committee. It also includes the director of research’s monthly investment strategy column, stock recommendations and sector picks, economic forecasts, and an asset allocation model. This month, the Focus List additions are Merck & Co Inc (MRK); Crowdstrike Holdings Inc (CRWD); Mondelez International Inc. (MDLZ); Hewlett Packard Enterprise Co (HPE) and the Focus List deletions are CIENA Corp. (CIEN); General Mills, Inc. (GIS); ServiceNow Inc (NOW); Vertex Pharmaceuticals, Inc. (VRTX).

This is an important week for the financial markets, as the economic calendar is loaded with key inflation data. The May CPI is out on Wednesday, the May PPI on Thursday, and the May Import Price Index on Friday. We also have an FOMC interest-rate decision (nothing expected) and Chairman Powell's press conference. According to the CME FedWatch Tool, the next real chance for Fed action is at the September 18 meeting, where the probability of a 25-basis-point (bps) cut is 45% versus 51% for no action. Both of the last two meetings in 2024 (11/7 and 12/18) show a higher probability that the fed funds rate will be cut by 25 bps, targeting the 5%-5.25% range.

Stocks closed nearly flat on Thursday ahead of the May monthly jobs report on Friday. The Dow is modestly higher, with the Nasdaq Composite, the S&P 500 and Russell 2000 off slightly. The yield on the 10-year Treasury note fell to 4.28%. Gold and oil are trading higher today.

Stocks were higher on Wednesday, recovering from Tuesday's losses. Fed Chair Powell said that interest rate cuts are likely at some point in 2024. He noted that he does not expect the U.S. to fall into a recession. Economic data released today included ADP's National Employment Report, which showed private employment grew by 140,000 in February, up from 107,000 in January but below estimates of 150,000. The Bureau of Labor Statistics reported that there were 8.86 million job openings in January, down from 8.89 million in December but above expectations for 8.85 million. The Dow rose 0.6%, the S&P 0.8%, and the Nasdaq 0.8%. Crude oil traded above $80 per barrel, while gold rose $13 to $21535 per ounce.

A New Year Ahead: Our Monthly Survey of the Economy, Interest Rates, and Stocks

Monday Tee Up: Jobs Friday

Stocks rose on Friday morning, following recent interviews and statements by Fed officials that signaled that they may pause interest rate hikes. In other news, Apple shares have started to rise following the past two-day plunge. The S&P 500 rose 0.4%, the Nasdaq was up 0.5%, and the Dow gained 0.3%. Crude oil traded near $88 per barrel and gold rose $3 to $1945.

Vickers Stock Research, a subsidiary of Argus Research Group, tracks and analyzes insider trading and institutional stock ownership trends. Institutions must file a Form 13F to report their holdings, and it is due 45 days after the end of calendar quarters. So these forms have now come in from 2Q23. We like to review the 13Fs of major activist investors, including Carl Icahn, Trian Fund Management, Jana Partners, and ValueAct Holdings, among others, in order to determine their core holdings and new purchases. 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. Activists have made progress in the past year with high-profile investments into companies such as Fedex and Union Pacific. According to Vickers, here are some recent new purchases and key holdings of activist investors, as well as other high-profile money managers such as Warren Buffet of Berkshire Hathaway and Ken Griffin of Citadel Advisors LLC.

AI in the Stock Market: Mania or Paradigm Shift?

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.

Monday Tee Up: Jobs Friday and Powell Testimony

Stocks fell on Thursday morning, a day after Wednesday's strong Fed-driven rally. Inflation data was cooler than expected. The core PCE price index, excluding food and energy, rose 0.2% from the prior month in October, down from a 0.5% gain in September and below the Bloomberg consensus forecast. The year-over-year increase in the core PCE also slowed to 5.0% from 5.2% a month earlier. The Dow fell 0.9%, the S&P fell 0.2%, and the Nasdaq was flat. Crude oil fell $2 to $82.50 per barrel, while gold jumped more than 3% to $1813 per ounce.

Stocks bounced back from earlier losses. The Dow ended up, driven by positive news from Johnson & Johnson and Amgen. NVIDIA Corporation (NVDA) is down more than 7% after the U.S. imposed a new license in order to do business in China and Russia, forcing the company to halt shipments to China. Other tech stocks fell as well. The Dow rose 0.5%, the S&P 0.3%, while the Nasdaq fell 1.2%. Crude oil fell 4% to $86 per barrel, while gold fell $17 to $1708 per ounce.

Reading the Tea Leaves on Inflation: CPI Friday

Stocks rose strongly on Wednesday morning, recouping some of their recent losses. The rally was led by the Financial, Industrial, and Energy sectors. In testimony before Congress, Fed Chair Jerome Powell said that the Fed was prepared to raise interest rates by 25 basis points at its upcoming meeting despite the uncertain impact of the war in Ukraine. The Dow rose 1.7%, the S&P 1.6%, and the Nasdaq 1.0%. Crude oil continued to soar, rising to $108 per barrel, while gold fell $23 to $1921 per ounce.

Stocks rose strongly on Wednesday morning, recovering from Tuesday's selloff as investors continued to weigh prospects for accelerated tapering from the Fed and the uncertain impact of the Omicron variant. Employment data was better than expected. Payroll provider ADP said that U.S. companies added 534,000 payroll jobs in November, down from 570,000 in October but above the Bloomberg consensus forecast of 525,000. The Dow rose 1.2%, the S&P 1.6%, and the Nasdaq 1.5%. Crude oil traded near $68 per barrel, while gold rose $10 to $1787 per ounce.

Stocks fell on Tuesday morning on continued concerns about slowing growth and the impact of the Delta variant. The selloff also followed a weaker-than-expected August employment report on Friday morning. Boeing shares dropped more than 2% after Ryanair ended talks for a major purchase of Boeing 737 MAX jets due to a pricing disagreement. The Dow fell 0.8%, the S&P 0.4%, and the Nasdaq 0.1%. Crude oil traded near $68 per barrel, while gold fell $38 to $1796 per ounce.

Inflation Fears Shadow Reopening: Our Monthly Survey of the Economy, Interest Rates, and Markets

The April nonfarm payrolls report on Friday badly missed consensus expectations and signaled that the economic recovery is far from automatic, or even assured. Stocks rose, suggesting that the fundamental event of a major data report can have far-reaching technical impact in the market.

Just when anxiety over the market's direction started to intensify, the S&P 500 said, "I got this," and ended the week at a new all-time closing high (ATH). Note that the closing price was less than a half-point above the prior ATH set on 3/17/21, which in market terms seems like a lifetime ago.

This edition features the future of networking; European food delivery; online education; and notes from GE, Costco, and Snowflake.

Vaccine Optimism: Our Monthly Survey of the Economy, Interest Rates, and Markets

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.

Into the Home Stretch: Our Monthly Survey of the Economy, Interest Rates, and Markets

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.