Stocks could be in another holding period after eight straight days of gains for the major indices. In addition, the FOMC minutes from the July 30/31 meeting drop today at 2:00 pm, Jackson Hole and Chairman Powell take center stage on Friday, and a critical EPS report from NVDA comes next Wednesday. The major indices saw modest losses on Tuesday (between 0.2% and 0.3%). Once again, the small-caps took the brunt of the selling, with the Russell 2000 and S&P 600 both falling slightly more than 1%, and the S&P MidCap 400 dropping 0.9%. It was the weakest NYSE breadth day since the panic on August 5. Sector leadership (if you can call it that) was provided by defensive Staples (+0.5%) and Healthcare (+0.4%). Seven sectors saw losses of less than 0.4%. Energy was the big loser, giving up 2.6% as WTI fell back to the $73 region and close to the lows seen in early August. The Nasdaq 100 (QQQ) McClellan Oscillator (market breadth indicator) has traced out a breadth thrust as the oscillator jumped to +90 from -76 in 10 trading days. The indicator also went from below its lower Bollinger Band to above its upper band. We saw a similar combination of moves back in October/November 2023, just when the QQQ started a big move higher. We also have seen similar moves by the oscillator for the S&P 500, with a nice rebound from the S&P 100 as the oscillator rose to +86 from -69. Seasonality is tricky this time of year due to low liquidity. However, there is a weak period just ahead, namely the second half of September. And that is true whether we look at the past 30 years or the past 50 years. (Mark Arbeter, CMT)

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Summer Shakeout amid Positive EPS Season The stock market in mid- to late-July experienced its worst stretch of the year, including its worst week since 2022. The strong start to the month sent the S&P 500 and the other major indices to all-time highs. Even following the late-month selloff, stocks entered the final partial trading week of July barely changed for the month. The stasis in the market is consistent with ongoing uncertainty. The nature of the presidential election changed dramatically over the past month. The Fed appears to be teeing up 50 basis points (bps) or possibly even 75 bps of rate cuts by the end of the year. However, no cuts appear likely until mid-September, leaving investors dangling. Consumers too are waiting for rate cuts, whether they know it or not, because a lower fed funds rate is the linchpin to getting the overall interest rate environment down from its multi-year peak. Amid the uncertainty, the second-quarter earnings season mostly has been a bright spot. While good past-quarter earnings are always important, investors hold their breaths regarding current-quarter outlooks. Companies have generally reaffirmed the moderately positive outlook for the full year, which is still trending toward high single-digit to low double-digit EPS growth for 2024. Up and Down in July The S&P 500, which came into mid-year up 14.5% for 2024, piled on an additional 3.8% in the first half of July. The index was up 18.8% for the year at its all-time closing peak of 5,667 on 7/16/24. By 7/19/24, the S&P 500 had shed over 100 points. And by 7/25/24, the index had lost more than 260 points from its all-time high, to close at 5,399. Given the strong start to the month, followed by equally strong selling, the S&P 500 entered the final partial trading week of July up 14.4% for the year - barely budged from where it stood at mid-year. The Trump assassination attempt and the switch in Democratic presidential contenders occurred in the space of two weekends. However, rather than point to political upheaval, most investors attributed the July selling to a much-needed correction in extremely overbought names in the Information Technology and Communication Services sectors. While some wealth flowed out of all equities in the late-July period, much of the proceeds from tech stock redemptions flowed into other sectors. With three trading days remaining in the month as of 7/26/24, Information Technology (IYW) was down 4% for the month of July; and Communication Services (XLC) was down just under 2%. Where did the money go? Lots flowed into the Financial sector (IYF), which was up 7% for the month. Upcoming cuts in the fed funds rate will pinch banks' net interest margins. However, the 2Q earnings season for the sector has been highly positive, featuring significant recovery in fee-based businesses such as investment banking. Those upcoming lower interest rates can also be expected to rekindle loan and mortgage growth, which have been an ongoing negative amid generally positive bank earnings results. Other winning sectors in July include Industrials (IYJ), up 4.5%; Utilities (IDU), up 3.3%; Healthcare, up 2.9%; Consumer Staples, up 2.5%; and Materials, up 2.4%. Most of these sectors rose with the market early in the month and then were able to hold onto their gains on generally positive second-quarter earnings results. As we prepared this report, the market on 7/29/24 was oscillating, rising in the morning on earnings optimism toward traditional growth leaders and then selling off by midday on fears those companies would disappoint. The market response to upcoming earnings and other major non-technology companies could determine not just the July outcome, but also the market's performance in August and into summer-end. Second-Quarter Earnings Season The above-cited July 29-through-August 2 period will be the biggest week in 2Q24 EPS season, with about one-third of S&P 500 components companies reporting results. We will be sure to weigh in on the biggest earnings week, which culminates with equally big economic news, the nonfarm payrolls for July on 8/2/24. In the interim, and based on 2Q24 EPS data through 7/26/24, the second-quarter earnings season has been a success so far. With just over 180 companies (36%) of S&P 500 component companies reporting, second-quarter 2024 earnings from continuing operations are up 9.1% on a share-weighted basis compared with 2Q23 EPS. According to Bloomberg, 2Q24 earnings are up 14.8% on a market-cap-weighted basis. This premium of market-cap-weighted to share-weighted EPS growth is consistent with recent quarters and is reflective of the earnings outperformance of the largest capitalization companies compared with small and mid-caps. According to the other earnings compiling agencies, FactSet reports 9.8% earnings growth for 2Q24 as of 7/26/24; and Refinitiv is reporting 12% earnings growth. Variation in performance measurements among FactSet, Refinitiv and Bloomberg reflect minor differences in calculating continuing operations earnings as well as different prior-year baselines. For the remainder of our 2Q earnings report card, we will mainly source Bloomberg data unless otherwise noted. An unusually high percentage of companies (31%) have reported negative earnings for 2Q24. The average EPS decline for the negative-earnings group, which is heavily weighted in Energy, Materials, and Real Estate, is 16%. For the 69% of companies reporting positive EPS, average earnings growth is a robust 22%. A key reason investors are optimistic about second-half 2024 earnings growth is that the negative drag from Energy, Materials, and Real Estate is expected to diminish in 3Q24 and particularly in 4Q24. About 79% of companies have reported positive EPS surprises in 2Q24, compared with (again) a high 14% of companies reporting negative surprises. According to FactSet, 78% of companies have reported positive EPS surprises. These percentage are above the 10-year average of 74%. For these companies, the median beat against consensus estimates is 5.2% (FactSet has it at 4.4%). For the first time in several quarters, the median beat against expectations is below the 10-year average of 6.8%. At the sector level, the strongest earnings growth is coming from Financial, Information Technology, and Utilities - all up in the 16%-17% range year over year. Communication Services 2Q24 earnings are up 15%. Other sectors reporting positive EPS growth include Healthcare, Consumer Discretionary, Consumer Staples, and Industrials, in descending order; all are up in the 2%-4% range. As noted, Energy, Materials, and Real Estate are all down; Materials is off in high single-digits, while Energy and Real Estate earnings are down 20%-21% from a year earlier. From a statistical standpoint, 36% would be considered a fairly reliable and predictive sample size. Timing of the remainder of 2Q24 earnings season, however, may introduce some variability. Over 61% of Financial companies have already reported, in what has been a better-than-anticipated season for the sector. Only 23% of Energy companies have reported; given similar sensitivity off all component companies to key commodities (oil and natural gas), the contribution from this sector will likely continue to pull down overall results. The swing sector is likely to be Information Technology. Fewer than 30% of tech companies have reported. Further, 2Q earnings from the heavy hitters (Apple, Microsoft, etc.) are not reflected in the data discussed above. Earnings from the big Healthcare, Industrial, and Consumer Discretionary (AMZN) companies could also play an outsized role. For 2Q24, Argus continues to model high-single-digit continuing-operations EPS growth for S&P 500 component companies. We see a higher likelihood that our forecast misses on the upside than on the downside. In other words, once all the component companies are tallied, we are more likely to see low-double-digit EPS growth for 2Q24 than we are to see mid-single-digit EPS growth. Conclusion Investors will veer away from earnings analysis for a few hours on the morning of 8/2/24 to assess the state of the labor economy. Argus Chief Economist Chris Graja, CFA, forecasts 185,000 new nonfarm payroll jobs for July, approximately in line with the 188,000 consensus forecast. The bigger focus will be on the unemployment rate, which was 4.1% in June. If July unemployment hits 4.2%, that would trigger the Sahm indicator. When unemployment rises 50 bps within a cycle, the Sahm rule posits, recession follows or has already begun. In this scenario, deteriorating labor markets become 'a self-reinforcing feedback loop,' according to former New York Fed president William Dudley. Secular and demographic factors may argue for structurally lower unemployment rates over the long term. This includes ongoing retirements from within the huge Baby Boomer cohort, and a smaller pool of workers from the generational cohorts that follow available to fill vacant boomer positions. Triggering the Sahm rule, nonetheless, would be a warning sign and presumably a wake-up call for the Fed to focus on the fight in front of it (preventing recession) and not the nearly won war against inflation.

It had to happen. The S&P 500 finally fell 2% for the day -- for the first time since February 2023. With a 2.3% decline, the index had its worst day since December 2022. Both the Nasdaq Composite and the Nasdaq 100 (QQQ) plummeted 3.6%, their worst decline since October 2022. Both the Nasdaq and the QQQ lost their 50-day for the first time since mid-April 2024. Once again, the former Information Technology leader, the semiconductors group (XLK -4%), led the market lower, with the SOXX and SMH ETFs down over 5%. By market cap, results came in at NVDA -6.8%, TSM -6%, AVGO -7.6%, ASML -6.4%, AMD -6%, QCOM -6.4%, AMAT -6%, and ARM -8.2%. For those looking to add/start a position in NVDA ($114.25), there is an unfilled gap at $106.50, the 21-week exponential is at $104.50, and another unfilled gap as well as the last breakout area is at $96. Consumer Discretionary fell 4% as TSLA dropped 12%. The S&P 500 (5,427) closed right at its rising 50-day average on Wednesday. Chart support lies between 5,225 and 5,320. These two levels also are associated with 50% and 61.8% retracements of the rally since mid-April. The more-worrisome condition exists with the high-beta indices like the QQQ. It has broken its uptrend off the lows since early May and its 50-day average, the 21-day rate of change is in negative territory, there have been multiple distribution days, the 5/13 exponential crossover is bearish, and price has traced out a lower low. In addition, the biggest QQQ issues either are close to breaking or have already broken below their 50-day averages. (Mark Arbeter, CMT)

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

The major indices have put recent stock weakness into hibernation, as the S&P 500 (SPX), Nasdaq, and Nasdaq 100 (QQQ) have jumped to all-time highs (ATHs). The false breakout by the SPX was nothing more than a back test of the 50-day average, while pullbacks by the Nasdaq and QQQs represented back tests of breakout zones from mid-May. On Wednesday, the SPX rose 1.2%, and the Nasdaq and QQQs gained 2%. It was clearly a risk-on day, with Technology up 2.3%, Communication Services gaining 1.2%, Industrials adding 1%, and Materials rising 0.7%. Weakness was seen in defensive Utilities, off 0.6%, and Staples, down 0.2%.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

The technical scorecard for stocks remains bullish, as indices at new all-time highs (and others missing by only a few points) are actually lagging advance/decline lines that have led price to new highs. Historically, when market breadth leads price, it has been bullish when looking out six to 12 months.

Stocks rose convincingly on Thursday as hopes are growing that the Fed will cut interest rates sooner than later. The DJIA had its seventh consecutive day in the green (up 0.85%), the Nasdaq Composite was higher by 0.27%, and the S&P 500 popped by 0.51%. Stocks have now reclaimed losses booked in April.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

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.

In this edition, European interest-rate cuts on the horizon; firm opportunities among drug and biopharma firms; and reports Tesla's affordable vehicle will be canceled; and Lazard, PVH, and Genmab.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Was that a case of quarter-end buying by institutions? Over the last 50 minutes of the trading session on Wednesday, the S&P 500 (SPX) took off like a rocket, surging 30 points and finishing 0.9% higher on the day and at another all-time high. But the biggest winners on the day were small-caps, with the Russell 2000 (IWM) surging 2.2% and the S&P 600 (SML) spiking 2.4%. The IWM is breaking out of a more-than two-year base and closed at its highest level since December 2021.

Stocks rallied on Thursday, extending yesterday's gains on rate-cut optimism. Turning to stocks, shares of Apple (AAPL) are down after the U.S. Department of Justice filed a lawsuit accusing the company of engineering a monopoly in the smartphone market. Bank stocks are up today as investors are optimistic that the anticipated rate cuts this year will drive more transactions. The S&P 500 is up 0.3%, the Dow is up 0.7%, the Nasdaq is up 0.2%, and the Russell 2000 is up 1.16%.

As if the stock market needed more help, now we have declining Treasury yields across the entire yield curve. Treasury yields fell consistently from October 19, 2023, until their most-recent bottom on December 27. That move certainly helped stocks rally off their October 27 low. Yields popped from 12/27/23 until 2/22/24 and stocks ignored the increase. Since their closing peaks of 4.33% a few weeks ago, both the 5- and 10-year yields have dropped to 4.1% while the 2-year has declined to 4.56% from 4.7%.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Value stocks -- a market segment that includes high-yield stocks -- outperformed growth stocks in 2022. That's a recent rarity, as for the past decade-plus, the performance record has favored growth. But the tide turned in 2022. The rollout of COVID-19 vaccines gave a lift to some of the cyclical companies (energy and regional banks) that had lagged in recent quarters, and value stocks outpaced growth stocks that year. While growth stocks have retaken the lead since 2023, the Federal Reserve continues to keep interest rates high to fend off inflation. This could possibly cap multiple expansion for growth companies in coming quarters. In any event, the value sector is the place to achieve income.

Value stocks -- a market segment that includes high-yield stocks -- outperformed growth stocks in 2022. That's a recent rarity, as for more than a decade, the performance record favored growth. Since 2010, the Russell 1000 Growth Index has climbed more than 575%, compared to an advance of almost 200% for the Russell 1000 Value Index. In 10 of the past 13 years, growth stocks have topped value stocks. That hasn't always been the case. In the 2000-2010 decade, including the Great Recession, value stocks were better performers than growth stocks, advancing an admittedly low 8% (but still better than growth, which declined 15% during the decade). Value investors trace their roots to the famous "Security Analysis" textbook, written by Ben Graham, an economics professor at Columbia University. Warren Buffett was one of his students. Why the recent deviation in performance? Several reasons, including changes in the make-up of the economy, growth in intangible assets, and the current level of interest rates. But the tide turned back in 2022, at least for a while, as the rollout of COVID-19 vaccines gave a lift to some of the cyclical companies (energy and regional banks) that had lagged in recent years. While growth stocks have recaptured the lead since 2023, the Federal Reserve continues to keep interest rates high to fend off inflation. This could possibly cap multiple expansion for growth companies in coming quarters. In any event, the value sector is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 2.0%, compared to the 0.7% current yield on the iShares Russell 1000 Growth Index ETF. For our list this week, we have screened our coverage universe for stocks that are BUY-rated by Argus Research analysts, have an Argus Financial Strength Rating of at least Medium, and have a yield of 3.0% or higher. Here's a baker's dozen that meet the criteria. These stocks are also featured in our High-Yield theme model portfolio.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

With many of the elite stocks technically overbought after huge moves in late 2023 and early 2024, we've done a search for stocks that might provide some 'alpha' if the red-hot AI stocks finally take a break. We examined how much the actual return of an investment might exceed its expected return based on its risk level. We asked our Certified Market Technician Mark Arbeter to study charts for technical signals that favor individual stocks and predict their alpha. Mark reported that it is difficult to find strong technical setups at this time. Still, he looked for stocks that have been beaten down but show evidence that the worst is over. Technical characteristics for these stocks include an existing intermediate- to long-term downtrend, capitulatory volume during weakness followed by an upside reversal, bullish daily and weekly momentum divergences, and (most importantly) signs that the stock is at least attempting to trace out a bottoming pattern. Mark looks for these bottom formations in certain trading patterns. Here's a list of Argus Research BUY-rated stocks that fit Mark's technical model, signally possibly upside ahead.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Many investors are getting a nice holiday present this December, as 2023 is closing out with a burst higher for stocks. The gains have been swift in the last month or so and are spread across sectors and market caps. Yet some companies have not joined in the party - and we think they may present opportunities. We used the Argus screening tool to generate a list of companies that have clean balance sheets and a proven track record for profits. We also like the management teams and strategies at these companies. For our list, we identified 11 BUY-rated large- or mega-cap companies across numerous industries that are selling at more than 25% below their 52-week highs. The list includes stocks in multiple sectors.

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.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Recession Fears Fade away as Earnings, Economy Deliver

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

We're sorry to sound like a broken record, but Monday was yet another day with poor market breadth. The major indices masked the weakness under the hood, with the S&P 500 (SPX) finishing the first trading day of October flat, the Nasdaq gaining 0.7%, and the Nasdaq 100 popping 0.8%. The two SPX sectors that rose on the day were Technology (XLK +0.8%) and Communication Services (XLC +0.6%).

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Value stocks -- a market segment that includes high-yield stocks -- outperformed growth stocks in 2022 for the first time since 2016. Indeed, for the past decade, the performance record has favored growth. But the tide turned in 2022. The rollout of COVID-19 vaccines gave a lift to some of the cyclical companies (energy companies and regional banks) that had lagged in recent quarters, and value stocks outpaced growth stocks over the past year. Meanwhile, the Federal Reserve continues to lift interest rates to fend off inflation, which could possibly cap multiple expansion for growth companies for a few more quarters. Regardless, the value sector is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 2.2%, compared to the 0.9% current yield on the iShares Russell 1000 Growth Index ETF. For our High-Yield Theme Model Portfolio, we are seeking stocks with yields of at least 3.0%. This moves us deep into the value segment of the market.

Value stocks -- a market segment that includes high-yield stocks -- outperformed growth stocks in 2022 for the first time since 2016. Indeed, for the past decade, the performance record has favored growth. But the tide turned in 2022. The rollout of COVID-19 vaccines gave a lift to some of the cyclical companies (energy companies and regional banks) that had lagged in recent quarters, and value stocks outpaced growth stocks over the past year. Meanwhile, the Federal Reserve continues to lift interest rates to fend off inflation, which could possibly cap multiple expansion for growth companies for a few more quarters. Regardless, the value sector is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 2.2%, compared to the 0.9% current yield on the iShares Russell 1000 Growth Index ETF. For our High-Yield Theme Model Portfolio, we are seeking stocks with yields of at least 3.0%. This moves us deep into the value segment of the market.

August has been rough for stocks. The markets are down from their highs, although the year overall has been upbeat for stocks -- especially compared to a dismal 2022. The continued stress on the economy from higher interest rates, and questions about whether the Federal Reserve is done raising them, have weighed on valuations. Most economists are not convinced that the recession question has been answered. While there are strengths in the economy -- like the labor market and consumer spending -- inflation indicators inched up last month. The uncertain environment has impacted small-caps, mid-caps, large-caps, and even mega-caps. There is a wide range in data that shows how sectors are weathering this climate, with Communication Services up nearly 40% year-to-date but Consumer Staples down 2% for the same time period. In our opinion, some solid companies with strong financials have been oversold. For our list this week, we identified 10 BUY-rated large- or mega-cap companies across numerous industries that are selling at attractive valuations (more than 20% below their 52-week highs). They are listed according to company size, with the largest first.

Market breadth has deteriorated quickly, which is surprising after the recent strong advance. Every recent rally attempt has been stepped on by sellers. Seasonals are playing out and historically don't get better until October. Not much is working, as stocks, bonds, commodities, and crypto are being dumped.

Monday Tee Up: Walmart's Turn

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Rapidly rising inflation in 2022 knocked stocks into a bear market. While growth strategies suffered the most, value strategies also declined. Even bond prices were lower last year. Stocks have recovered thus far in 2023, but gains have been largely driven by only a handful of high-tech companies. Inflation remains high and the Fed continues to raise rates. Is a recession in the offing? With all the uncertainty, is it time for investors to cash in their chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes, such as fixed income and cash. Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate. Academic literature and, more to the point, returns history, indicate that Min Vol can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods.

This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Stocks rose on Wednesday morning as investors awaited new developments in the debt ceiling negotiations in Washington. Housing market data was mixed, with growth in both single- and multi-family housing starts, but a decline in total building permits. Overall housing starts rose 2.2% to an annualized 1.401 million units, slightly above the Reuters consensus forecast. The Dow rose 0.4%, the S&P 0.4%, and the Nasdaq 0.6%. Crude oil traded near $72 per barrel, while gold fell $7 to $1986 per ounce.

In this edition, global oil inventories face future; feeling the internet's backbone; and initiating coverage of Qualys; and Lithium Americas, Bausch & Lomb and Macy's.

In this edition, railroads may be in for a bumpy ride; ESG has some opportunities; biotechs innovate; and Constellation Brands, Autodesk, and Tencent.

In this edition, railroads may be in for a bumpy ride; ESG has some opportunities; biotechs innovate; and Constellation Brands, Autodesk, and Tencent.

For our list this week, we are focusing on the Healthcare Sector, which we rank as one of our favorites with an Over-Weight rating. Healthcare was an outperformer in 2022, falling only 4% while the S&P 500 dropped 19%, but has lagged in the early weeks of 2023. We think the recent relative weakness may offer a buying opportunity. Post-COVID, consumers are more willing to spend on lifestyle enhancements along with necessary spending on life-saving treatments. In addition, the survival of the Affordable Care Act has kept the ranks of insured U.S. citizens above the historical average, further increasing consumer spending on healthcare services and products. Meanwhile, companies with experience in diagnostic testing, vaccines, and antiviral medicines, as well as suppliers of protective equipment and other hospital products, have benefited from efforts to contain the pandemic. The sector accounts for 14.7% of the S&P 500, and includes companies in the pharmaceuticals, medical devices, healthcare services, and insurance industries. Here's our list of Argus BUY-rated Healthcare stocks that are large-cap and have solid books. We sorted by the largest percentage from the 52-week high.

Value stocks -- a market segment that includes high-yield stocks -- outperformed growth stocks in 2022 for the first time since 2016. Indeed, for the past decade, the performance record has favored growth. But the tide turned in 2022. The rollout of COVID-19 vaccines gave a lift to some of the cyclical companies (energy companies and regional banks) that had lagged in recent quarters, and value stocks outpaced growth stocks over the past year. Meanwhile, the Federal Reserve continues to lift interest rates to fend off inflation, which could possibly cap multiple expansion for growth companies for a few more quarters. Regardless, the value sector is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 2.2%, compared to the 0.9% current yield on the iShares Russell 1000 Growth Index ETF. For our High-Yield Theme Model Portfolio, we are seeking stocks with yields of at least 3.0%. This moves us deep into the value segment of the market.

Monday Tee Up: Heavy on Earnings, Light on the Economy

Rapidly rising inflation 2022 knocked stocks into a bear market. While growth strategies suffered the most, value strategies also declined. Even bond prices were lower last year. Volatility, which has dropped from the highs of 2020, still has not returned to pre-COVID levels. Is it time for investors to cash in their chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes, such as fixed income and cash. As well, those fixed-income returns are from eras when the 10-year Treasury bond yield was much higher than the current 3.5% level. So what's a potential equity strategy for investors amid all the uncertainty? Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate.

Stocks rose on Tuesday morning as investors awaited the results of the midterm elections, with late polls pointing to a Republican victory in the House and a tight race in the Senate. On the earnings front, Lyft shares fell more than 20% after the ride-hailing firm posted weaker-than-expected 3Q revenue and earnings. The Dow rose 1.3%, the S&P 1.1%, and the Nasdaq 1.3%. Crude oil fell slightly to $91.50 per barrel, while gold rose $36 to $1717 per ounce.

Both the potential onset of recession (if the economy is not in one already) and the sharp move higher in interest rates have pulled the foundation out from under the equity market in 2022. Few sectors have been spared, with only the Energy industry in the green on a year-to-date basis. The broad retrenchment has dragged down small-caps, mid-caps, large-caps, and even the mega-caps that had previously pushed stocks to new heights as the economy recovered from the pandemic. In our opinion, some of these world-class companies have been oversold. For our list this week, we have identified 11 BUY-rated large- or mega-cap companies across numerous industries that are selling at attractive valuations and are more than 20% below their 52-week highs.

Healthcare is a sector that includes many categories and investing disciplines. It is innovative, can be either growth or value, and can involve start-ups or mature companies. A healthcare company can be built around one product that is leveraged in broad and creative ways, or a company with depth, breadth and products that have many touchpoints. Many of the companies are truly science-based, some with managers who are stronger as scientists than as executives running a company; others have scientists focus on science while practiced managers mind the books. The Healthcare sector accounts for 15% of the S&P 500, with an overall market cap of $1.4 trillion dollars. Subsectors include Biotechnology, Healthcare Distributors, Healthcare Equipment, Healthcare Supplies, Life Sciences Tools and Services, Managed Healthcare, and Pharmaceuticals. We think investors should Over-Weight the sector and consider allocating about 15% of their diversified portfolios to stocks in the sector. Healthcare is slightly outperforming the S&P 500 thus far in 2022, with a loss of 14% compared to the 25% loss for the S&P 500. The following are some Argus BUY-rated Healthcare companies. The stocks were selected using the Argus screening tool and the following criteria: BUY-rated; large-cap (greater than $8 billion market capitalization); a Financial Strength rating of Medium-High or High; and paying a dividend. We feel these companies currently are best in class for the sector. Some are also part of our model portfolios (Growth & Income, Equity Income, Growth, and Institutional).

Value stocks -- a market segment that includes high-yield stocks -- are outperforming growth stocks in 2022 for the first time since 2016. Indeed, for the past decade, the performance record has favored growth. In nine of the past 10 years, growth stocks have topped value stocks. But the tide may be turning. The rollout of COVID-19 vaccines has given a lift to some of the cyclical companies (energy companies and regional banks) that have lagged in recent quarters, and value stocks have kept up the pace with growth stocks in the past year. Now, the Federal Reserve lifting interest rates to fend off inflation, which will likely cap multiple expansion for growth companies. Regardless, the value sector is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 2.1%, compared to the 0.8% current yield on the iShares Russell 1000 Growth Index ETF. For our High-Yield Theme Model Portfolio, we are seeking stocks with yields of at least 3.0%. This moves us deep into the value segment of the market.

Stocks were mostly higher on Thursday morning amid more signs of moderating inflation. The Labor Department said that its producer price index for final demand fell 0.5% in July, down from a 1.0% increase in June. The reading was the first negative number since April 2020 and below the Reuters consensus forecast, which called for an increase of 0.2%. The Dow rose 0.5%, the S&P rose 0.4%, and the Nasdaq was flat. Crude oil rose 1.5% to $93.50 per barrel, while gold rose $8 to $1806 per ounce.

Rapidly rising inflation in 2022 has knocked the stock market into a bear market. While growth strategies have suffered the most, value strategies also have declined. Even year-to-date bond prices are lower. Volatility, which has dropped from the highs of 2020, still has not returned to pre-COVID levels. Is it time for investors to cash in their chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes, such as fixed income and cash. As well, those returns are from eras when the 10-year Treasury bond yield was much higher than the current 3.0% level. So what's a potential equity strategy for investors amid all the uncertainty? Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate. Academic literature and, more to the point, returns history, indicate that Min Vol can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods.

Monday provided a much-needed rest for the stock market after a very large rebound last week. Following that strong week (and we've seen this before during the current decline), the "bottom-callers" are out, but not in big numbers. That's probably a good thing, as others are calling this another bear-market rally. From a technical perspective and using our own interpretation, it is far too early to call the bottom as there is just not enough of the needed evidence.

We are raising our intermediate-term technical outlook to neutral from bearish. This reverses our April 22 intermediate-term downgrade from neutral to bearish. This action is not a green light and we are not saying the bottom is in and it's up, up, and away from here. But we do think the major indices are attempting to hammer out (via a candlestick pattern) a bottom because we have seen a few "sticks" in recent trading sessions. Simply put, we are seeing days where stocks trade significantly lower but then finish strong.

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.