If one were to ask the average investor to name the leading S&P 500 sector this year, Information Technology might very well be the most-common answer, even after the recent tough few months. But that answer would be wrong, as the Utilities (XLU) sector is leading the pack so far in 2024, with an incredible 26% return as of this writing (which doesn't include dividends). Should the masses say that semiconductor stocks represent the leading industry, they would be correct. For 2024, XLU has soared 26%; Communication Services 20%; Financial 19%; Consumer Staples 18%; Healthcare, Industrials, Information Technology, and Real Estate about 15%; Materials 9%; Consumer Discretionary 8%; and Energy 4%. So there are very broad gains, unlike in recent years. One could try to make the case that the leadership leans defensive, but many stocks in Utilities have surged due to the coming increased power demand from the buildout in data centers and AI. Meanwhile, Healthcare, also considered defensive, has been boosted by weight-loss drugs, which reflects R&D as well as innovation. Strength in Utilities has been led by conventional electricity stocks the often have large capitalization, such as NEE (+44%), SO (+31%), CEG (+69%), AEP (+30%), and VST (+123%). Communication Services also is led by large-cap 'utility type' issues such as VZ (+24%) and T (+35%). Unfortunately, Utilities make up a mere 2.5% of the S&P 500, Consumer Staples 6%, and Real Estate 2.4%. The monster in the room remains Information Technology, with a 32% weighting. That is almost equal to the next three largest sectors (Financial, Healthcare, and Consumer Discretionary) combined.

Can AI Still Drive the Market?

Nearly two months into 2024, stocks continue to perform well, yet insiders remain very cautious (as they have been for the past month). Insiders have unique views into their respective corners of the market, and their overt caution begs a question. Shouldn't stocks be pulling back if insiders are correct?

In this edition, Singapore Exchange still undervalued; shares cheap for Ramsay Healthcare; multitude of issues faces multifamily construction in U.S.; and Singapore Exchange, Baxter International, and Etsy.

Stocks rose strongly on Friday morning after lower-than-expected employment growth raised the likelihood of an end to the Fed's rate hike campaign. The Labor Department said that the U.S. economy added 150,000 payroll jobs in October, down from a revised 297,000 in September and below the Reuters consensus forecast of 180,000. In other signs of a cooling labor market, the unemployment rate edged up to 3.9% from 3.8% a month earlier and annual growth in average hourly earnings slowed to 4.1% from 4.3%. The Dow rose 0.7%, the S&P 0.9%, and the Nasdaq 1.2%. Crude oil traded near $82 per barrel, while gold rose $8 to $2002 per ounce.

Monday Tee Up: Walmart's Turn

Stocks rose on Thursday morning amid new weekly employment data, disappointing results from GameStop, and favorable guidance from used car retailer Carvana. GameStop shares fell 18% after the former meme stock favorite posted lower-than-expected 1Q revenue, canceled its earnings call, and fired its CEO. Carvana shares jumped 23% after the company issued strong second-quarter guidance. The Dow rose 0.3%, the S&P 0.3%, and the Nasdaq 0.9%. Crude oil fell to $72 per barrel while gold rose $24 to $1983 per ounce.

In recent commentary, we talked about one of the things missing from this potential new bull market -- namely, a lockout rally. Persistent strength is a common theme after 'the' low is in. In 1982, the 13-week rate-of-change (ROC) after the bottom was 37% and the S&P 500 (SPX) rose in 10 of those 13 weeks. Off the secondary low in early 1991, the 14W ROC was 22% with 10 of 14 weeks positive. In 1998, the 13W gain was 30% and the '500' rose in 10 of 13 weeks. After the technology meltdown, the 13W bounce off the 2003 low was 20%, with 10 of 13 weeks on the upside. After the financial crises, we witnessed a 38% rally in 2009, with the index rising in 11 of 13 weeks. Following the 2011 secondary low, the 16W rate-of-change was 22%, with advances in 13 of 16 weeks.

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.

Last week, we noted a burst of insider transactions coming out of the now-concluded earnings season. Insiders typically sell stock more often than they buy stock -- but as is the case with most measurements, increased volume brings with it increased significance. The sentiment exposed by the data last week was more-cautious than normal. But, as we wrote, it was 'nowhere near a level that is cause for us to sound an alarm.'

Stocks were mostly higher on Thursday morning following new weekly employment data and mixed results from major retailers. Kohl's shares fell more than 5%, despite above-consensus 2Q EPS, after the company cut its full-year sales and earnings forecasts. On the positive side, BJ's Wholesale Club reported better-than-expected results and raised its full-year guidance, sending the shares up 8%. The Dow fell 0.1%, the S&P rose 0.2%, and the Nasdaq rose 0.4%. Crude oil rose 2% to $90 per barrel, while gold fell $4 to $1773 per ounce.

Stocks rallied on Thursday morning, helped by strong earnings reports from major retailers. Macy's shares rose 16% after the company posted stronger-than-expected first-quarter sales and earnings and raised its full-year guidance. Dollar General also rose strongly following above-consensus first-quarter results. The Dow rose 1.5%, the S&P 1.8%, and the Nasdaq 2.3%. Crude oil rose $4 to $114 per barrel, while gold fell $2 to $1847 per ounce.

Last week, as markets reacted to developments in Ukraine and the S&P 500 fell briefly to levels last seen in May 2021, many corporate insiders were in a bullish mood, scooping up shares at seemingly discounted prices. The overall Insider Index from Vickers Stock Research (which looks at six months of trading activity) has improved to -14.76, its best reading since November 2020. The index is drawing ever closer to -14.00, which marks the move from bearish to neutral sentiment for this long-term barometer. Bullish sentiment kicks in over +5.00.

This edition features Broadridge's potential, trends in utility companies, new coverage of Datadog, and Eastman, Atlassian, and Comcast.

The Federal Reserve wrapped up its latest Open Market Committee meeting on Wednesday and, as expected, decided that it will accelerate its asset-purchase tapering program in an attempt to bring inflation under control. What was unexpected was the news that the majority of the central bank now think that the federal funds rate will be increased three times next year. Prior to the meeting, the Fed's consensus was for only one fed funds rate hike in 2022. Fed Chairman Jerome Powell announced that the central bank will begin in January to reduce the monthly amount of its net asset purchases by $30 billion, up from its previous rate of $15 billion. At this pace, the asset-purchasing program will be wound down in the spring. And that's when the fed funds rate hikes may begin. In the Fed's Summary of Economic Projections report, also released Wednesday, the Fed pointed toward a year-end federal funds rate of 0.9%, compared to the current 0.15%. That's three 25-basis-point increases. In 2023, the central bank is anticipating another three increases, with the federal funds rate reaching 2.1% in 2024. PCE inflation is expected by the Fed to run at a 5.3%-5.4% rate in 2021, before cooling to 2.2%-3.0% in 2022. Equity investors cheered the news, and stock indices closed at highs for the day.

Just like that, Christmas is here and the end of the year is nigh. And just like the bathrobe-clad kid in 'The Polar Express,' investors want to believe -- if not in Santa, than at least in his rally.

Stocks rebounded on Tuesday morning following Monday's selloff, led by strong gains in the Technology and Financial sectors. Services industry data was positive. The Institute for Supply Management said that its nonmanufacturing index rose to 61.9 in September, up from 61.7 in August and above the Reuters consensus forecast of 60. The Commerce Department reported that the U.S. trade deficit jumped 4.2% to a record $73.3 billion in August as imports rose more than exports. The Dow rose 1.2%, the S&P 1.3%, and the Nasdaq 1.4%. Crude oil traded near $79 per barrel, while gold fell $13 to $1755 per ounce.

The stock market was slammed by not one, but two concerning inflation data points in the trading week ending May 14. The consumer price index for April jumped by 0.8% month-over-month and by 4.2% year-over-year. The producer price index was even more concerning, rising a lesser 0.6% month-over-month but a higher 6.2% year-over-year.

In 1849, Jean-Baptiste Alphonse Karr wrote, 'The more things change, the more they stay the same.' Now, over 170 years later, his prophetic statement aligns perfectly with stock-market sentiment.

Stocks rebounded on Friday, finishing off a week that saw the major indexes close mixed. Technology stocks performed better than blue chips, breaking a three-week string of FAANG sell-offs. On Friday, the Dow Jones Industrial Average climbed 359 points, or 1.3%. The S&P 500 increased 1.6% and the Nasdaq Composite increased 2.3% on the day. For the full week, the Dow was down 1.8%, the S&P 500 was down 0.6%, and the Nasdaq was up 1.1%. With last week's drop in the S&P 500, the broader market has declined four weeks in a row. For the year-to-date, the DJIA is down 4.8%, the S&P is up 2.1%, and the Nasdaq is up 21.6%. Over the past 52 weeks, the Dow is up 1.3%, the S&P 500 is up 11.4%, and the Nasdaq is up 37.5%.

Stocks rebounded on Friday, finishing off a week that saw the major indexes close mixed. Technology stocks performed better than blue chips, breaking a three-week string of FAANG sell-offs. On Friday, the Dow Jones Industrial Average climbed 359 points, or 1.3%. The S&P 500 increased 1.6% and the Nasdaq Composite increased 2.3% on the day. For the full week, the Dow was down 1.8%, the S&P 500 was down 0.6%, and the Nasdaq was up 1.1%. With last week's drop in the S&P 500, the broader market has declined four weeks in a row. For the year-to-date, the DJIA is down 4.8%, the S&P is up 2.1%, and the Nasdaq is up 21.6%. Over the past 52 weeks, the Dow is up 1.3%, the S&P 500 is up 11.4%, and the Nasdaq is up 37.5%.

Stocks plunged on Thursday as investors weighed reports of rising coronavirus infections and the Federal Reserve's weak economic outlook. On Wednesday, the Fed projected a 6.5% decline in U.S. GDP this year and a year-end unemployment rate of 9.3%. Fed Chair Jerome Powell said that it would be a 'long road' to put millions of unemployed Americans back to work and again called for more fiscal support from the White House and Congress. The Dow fell 6.90%, the S&P 5.89%, and the Nasdaq 5.27%. Crude oil fell more than 9% to $36 per barrel, while gold rose $14 to $1734 per ounce.

Stocks plunged on Thursday as investors weighed reports of rising coronavirus infections and the Federal Reserve's weak economic outlook. On Wednesday, the Fed projected a 6.5% decline in U.S. GDP this year and a year-end unemployment rate of 9.3%. Fed Chair Jerome Powell said that it would be a 'long road' to put millions of unemployed Americans back to work and again called for more fiscal support from the White House and Congress. The Dow fell 6.90%, the S&P 5.89%, and the Nasdaq 5.27%. Crude oil fell more than 9% to $36 per barrel, while gold rose $14 to $1734 per ounce.