The Nasdaq is down more than 1%. Other major indices are flat. Earnings reports are driving action for individual stocks. Many retailers are still reporting with mixed stories on last quarter. In case you haven't heard, AI behemoth Nvidia reports after-the-bell.

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.

U.S. stocks were mixed intraday on Friday as investors digested new economic data. In February, total nonfarm payrolls rose 275,000 according to the latest Bureau of Labor Statistics report. This was higher than the expected 198,000, and higher than last month's 229,000 (revised down from 353,000). While a hotter-than-expected jobs reading initially sparked a sell-off, the rise in unemployment on the next line of the report led stocks to bounce back. The unemployment rate ticked up to 3.9% in February, rising 0.2% from the month prior. In February, total nonfarm payrolls rose 275,000 according to the latest Bureau of Labor Statistics report. This was higher than the expected 198,000, and higher than last month's 229,000 (revised down from 353,000). The unemployment rate ticked up to 3.9% in February, rising 0.2% from the month prior.

Monday Tee Up: Jobs Friday

Stocks rallied on Thursday on rising retail sales boosted by higher fuel prices. In other news, Arm Holdings began trading on the Nasdaq in an IPO that was valued at $54 billion. The shares opened above $56 and closed at $63.59. The success of this IPO has given a boost to the tech sector and optimism that the IPO market will recover. The S&P 500 closed up 0.8%, the Dow was up 0.96% and the Nasdaq rose 0.8%. Crude oil passed $90 per barrel, while gold fell almost $1 to $1931 per ounce.

Stocks were mixed on Wednesday morning amid more signs of cooling inflation as investors awaited the Federal Reserve's policy statement this afternoon. While the Fed is expected to leave rates unchanged, investors will be focusing on the central bank's economic commentary and prospects for rate hikes at subsequent meetings. The Labor Department said that U.S. producer prices rose 1.1% from the prior year in May, down from 2.3% in April. The reading was the lowest since December 2020 and below the Reuters consensus forecast of 1.5% growth. The Dow fell 0.4%, the S&P rose 0.3%, and the Nasdaq rose 0.4%. Crude oil traded near $70 per barrel, while gold rose $12 to $1971 per ounce.

Stocks rose strongly on Thursday morning, a day after the Fed raised its benchmark interest rate, as expected, by 25 basis points. The rally reversed sharp losses on Wednesday. In his post-announcement news conference, Fed Chair Powell again stressed the Fed's commitment to bringing down inflation to its 2% target. He noted that tighter credit conditions would likely allow the Fed to scale back future rate hikes, but dismissed suggestions that it would cut rates later this year. The Dow rose 1.3%, the S&P 1.6%, and the Nasdaq 2.3%. Crude oil rose to $71 per barrel, while gold rose $34 to $1983 per ounce.

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.

A Hard 2022, an Uncertain 2023: Our Monthly Survey of the Economy, Interest Rates, and Stocks

Monday Tee Up: Inflation, Inflation, Inflation

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 were mixed in volatile trading on Friday morning as investors continued to focus on inflation, rate hikes, and prospects for recession. Manufacturing data was weaker than expected. The Federal Reserve said that production at U.S. factories fell 0.1% in May after rising 0.8% in April. The consensus called for modest growth of 0.3%. Including mines and utilities, overall industrial production rose 0.2%, down from 1.4% growth a month earlier. The Dow fell 0.2%, the S&P was flat, and the Nasdaq rose 0.9%. Crude oil fell sharply to $111 per barrel, while gold traded near $1841 per ounce.

The overall Insider Index from Vickers Stock Research continues to benefit from a long-term trend of benign/bullish sentiment among corporate executives, directors, and beneficial owners. The Index (at -11.70 compared to -11.96 last week) continues to improve within the neutral zone that runs from +5.00 to -14.00. Despite insider-transaction volume that is at the lowest level since January (with insiders broadly prohibited from trading now that earnings season is fully underway), the Insider Index (reflecting six months of transaction data) is at its most-positive level since September 2020.

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

Stocks fell sharply on Tuesday morning amid rising Treasury yields. The selloff was led by the Financial, Communication Services, and Technology sectors, with only Energy in positive territory. Goldman Sachs shares fell more than 8% after the company posted lower 4Q earnings and missed the consensus EPS estimate. The Dow fell 1.6%, the S&P 1.7%, and the Nasdaq 2.2%. Crude oil rose more than 1% to $85 per barrel, while gold fell $4 to $1813 ounce.

This edition features European banks; California utilities; traditional payment firms; and notes from Johnson & Johnson, Green Thumb Industries, and new coverage Lithium Americas.

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 were mostly lower on Friday morning following a weaker-than-expected August employment report. The Labor Department said that the U.S. added just 235,000 payroll jobs in August, down from a revised 1.053 million in July and well below the Reuters consensus forecast of 728,000. The official unemployment rate fell to 5.2%, down from 5.4% in July. The Dow fell 0.2%, the S&P fell 0.1%, and the Nasdaq rose 0.1%. Crude oil traded near $70 per barrel, while gold rose $22 to $1833 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.

Stocks rose on Monday morning recovering some of last week's losses. Tomorrow, May existing home sales will be released. They are expected to remain close to the 5.80 million SAAR reported in April. The S&P was up 1.2% and the Nasdaq 0.6% and the Dow was up 1.6%. Crude oil traded near $73 per barrel, while gold traded near $1782 per ounce.