In this edition, MSCI could benefit from international markets; we are confident about EVs accelerating in China; Scotts Miracle-Gro will bloom again; and Hong Kong Exchanges and Clearing, Estée Lauder, and Tencent Holdings.

Peter Lynch famously noted that "insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise." Up until recently, 2024 was a very good year for equity investors, with all-time highs booked on a regular basis. So as insiders grew increasingly cautious over the past few months, it was easy to assume they were simply taking a little off the top. But about four weeks ago, the caution became pronounced, and last week, analysts at Vickers Stock Research noted that sell/buy ratios based on insider transactions were at their highest (most-bearish) levels since February of 2023. Indeed, Vickers' Total Eight-Week Sell/Buy Ratio has worsened to 5.15 from 3.59 in late June, this on a scale where anything above 2.50 is considered to be bearish. More important (and keeping in mind the words of Peter Lynch) is the following: Are insiders starting to think that prices are again attractive? Not yet. Current insider-sentiment readings from Vickers remain very bearish for a third week, with the action on the NYSE especially bleak: the index sports a one-week sell/buy reading of 11:00, up from 3.97 four weeks ago. Meanwhile, the Insider Index from Vickers (which looks at six months of insider activity) now sits at its most-bearish reading since August of 2021. This will all turn eventually -- but for now, playing defense remains the order of the day it seems. On a sector basis, selling by insiders last week was greatest in Information Technology, with shares valued at $114 million sold versus roughly $19 million bought. Buying outpaced selling in Communication Services.

The Federal Reserve wrapped up its Open Market Committee meeting and, as expected, held the current federal funds rate steady at 5.25%-5.50%. The rate remains at its highest level since 2000 and above the long-term average of 4.4%. This is the Fed's plan: keep rates high to push inflation lower. In the meantime, inflation has been on a downward trek. The latest CPI reading was 3.0%, down from 9.1% in July 2022. The latest core PCE Price Index reading -- the Fed's favorite metric -- was 2.5%. Yet despite progress, both measures remain above the Fed's target of 2.0% and the slope of the downward trajectory has flattened a bit. Those are potential problems for a central bank that watched while pricing pressures got out of hand in 2020-2021 and wants to rebuild its reputation as an effective inflation fighter. However, the Fed has a dual mandate -- inflation and employment -- and also must be mindful of the trend in the unemployment rate, which is up 70 basis points from its cycle low to a current rate of 4.1%. Here are our key takeaways from the Fed meeting and the follow-up press conference featuring Chairman Powell. The first rate cut could be "on the table" at the central bank's next meeting, which begins on September 18. As well, the Fed appears to be tilting its focus away from inflation and toward the labor market, as the post-meeting statement this time proclaimed "the committee is attentive to the risks to both sides of its dual mandate." That replaces the previous language that said the Fed was "highly attentive to risks." We still think that two cuts is the right number for the Federal Reserve in 2024, with two more in 2025.

Stocks closed mixed on Thursday. The Dow edged higher, while the S&P 500 and the Nasdaq fell following a better-than-expected GDP report. Ahead of the Friday's June reading of the PCE and the Michigan sentiment survey, stocks are volatile and likely to end the week with losses.

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 is in a rough patch for the first time since the July to October period of last year. After the major indices hit their secondary highs on April 11 (the Nasdaq hit its all-time high that day), is has pretty much been 'down periscope.' Out of those trading six days, the S&P 500 (SPX), Nasdaq, and Nasdaq 100 (QQQ) have fallen between 0.9% and 2.1% on three (SPX) or four of those days. Despite the very steep downside slope of the Big 3, NYSE breadth actually bottomed on April 12 and 15, illustrating that the selling has been concentrated in Big Tech and the many stocks that were overly extended on a momentum basis.

The Fed wrapped up its Open Market Committee meeting on Wednesday and held the federal funds rate steady at 5.25%-5.50%. This was the fourth pause following a hike in July, which was the eleventh increase by the central bank over 16 months. The fed funds rate remains at its highest level since 2000 and is above the long-term average of 4.4%. The hikes have been reducing inflation. The latest core CPI reading was 3.9%, down from 9.1% in July 2022, and the latest core PCE Price Index reading was 2.9%. Despite the downtrends, both are well above the Fed's target of 2.0%. And that's the problem. While the central bank disclosed at its previous meeting that it may lower interest rates three times in 2024, Wall Street jumped the gun a bit and was expecting five or six. When Fed Chairman Powell commented on Wednesday that the March meeting is probably not the appropriate time for a rate cut, stocks started to tumble. By the end of the session, the DJIA had given back 250 points and the Nasdaq had dropped 2.0%. At Argus, our forecast has been that the Fed will start to cut rates in July, and will likely keep to its word of fewer cuts, rather than more cuts. That forecast stands. We believe the most important sentence from the Fed's statement was the following. "The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent." The Fed is indeed ahead of the inflation curve, and the current real fed funds rate of 2.4% is above the historical average of 1.6%. At the recent pace of decline, core PCE could be closer to 2.5% by mid-year, at which point the Fed might feel a move is more appropriate.

The 'Energizer Bunny' stock market seems to have a lot of juice left, as the major indices powered to new all-time highs on Monday, January 29, while smaller-cap stocks also joined in. The S&P 500 (SPX) and the S&P 100 rose 0.8%, the Nasdaq and Nasdaq 100 rallied a bit more than 1%, the S&P 400 tacked on 0.9%, and the Russell 2000 led the day, popping 1.7%. Ten of the 11 SPX sectors rose, with Consumer Discretionary, Technology, Communication Services, Real Estate, Healthcare, Industrials, Utilities, and Staples all rising 0.6% to 1.5%.

The Argus Research Fundamental Universe of Coverage includes approximately 500 leading U.S. and international companies. We cover the waterfront -- from Technology to Utilities from Energy to Healthcare. Generally, we follow the top 200 most widely held stocks, a list we source from our sister company Vickers Stock Research, which collects institutional ownership data from the U.S. Securities and Exchange Commission. From there, we look to identify the next 200-300 emerging U.S. and international companies to add to our list. Our Universe of Coverage is dynamic and growing. We are continually adding stocks to coverage and often get great ideas from our clients. Here are some of our most recent additions.

Equities have sent confusing and contradictory signals throughout a back-and-forth 2023. Since setting year-highs at the end of July, the S&P 500 has mainly moved lower. During various attempted recovery spurts, the one thing that has been consistently lacking has been breadth. A handful of AI superhero stocks cannot carry the market, and narrow recovery tries are doomed to fail, in our view.

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 labor and materials costs are lower. Yet the U.S. economy, even during the pandemic and the current period of high inflation, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as vaccines) and services (such as Zoom calls) and moving into new markets and applications, the domestic economy would not be growing, and capital would not be flooding into the country. The current high level of the U.S. dollar relative to currencies around the world attests to the confidence that global investors have in the durable and innovative U.S. economy.

Regarding insider sentiment, our premise for the past two weeks has been that insiders have parked themselves on the sidelines and are awaiting a meaningful catalyst before they make any decisions about buying or selling shares. And indeed, the data from Vickers Stock Research this week continues to reflect corporate executives, directors, and beneficial owners who are simply not engaged at the moment -- and the weekly barometers from Vickers could not be more neutral.