Small- and mid-cap stocks (SMID) have underperformed large-caps over the past 12 months, but may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from global events. As well, the prices of SMID stocks generally are lower than the prices of large-caps. As well, there are long stretches in the record books when SMID stocks have outperformed large-caps. That said, SMID stocks can be risky. The standard deviation for monthly returns was 5.7% for SMID stocks over a 2003-2021 test period, versus 4.3% for large-caps. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record.

U.S. equities inched higher on Thursday despite regional bank woes and ahead of the CPI revisions that will be released this morning. After hitting 5000 for the first time ever, the S&P 500 closed just below 5000. The Dow also closed at an all-time high. Big stock gainers include Arm Holdings PLC (ARM), up 48% and Ralph Lauren Corp. (RL), up 25%. The S&P 500 closed up less than 0.1%, the Dow was up 0.1% and the Nasdaq gained 0.2%. Crude oil rose above $76 per barrel and gold was up $1 to $2049 per ounce.

Stocks fell on Thursday, extending Wednesday's selloff, as investors weighed a wide range of earnings reports, a tentative labor agreement between Ford and the UAW, and stronger-than-expected GDP data. Shares of Meta fell 3.7%, along with Apple (down 2.5%) and Microsoft (down 3.8%). The 10-year yield pulled back to 4.84%. The Dow fell 0.8%, the S&P 0.7%, and the Nasdaq 1.8%. Crude oil fell settled at $83.63 per barrel, while gold closed near $1993 per ounce.

Small- and mid-cap stocks (SMID) have underperformed large-caps over the past 12 months, but may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine, high European inflation or other geopolitical developments. As well, the prices of SMID stocks generally are lower than the prices of large-caps. SMID stocks can be risky, but diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 12%-15% of the U.S. stock market's capitalization is comprised of SMID stocks. For our purposes, we use a threshold of $20 billion to define a SMID stock.

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.

Stocks fell in late trading on Thursday, giving up early gains, as investors weighed more 2Q earnings reports and new GDP and employment data. The Commerce Department, in its advance estimate, said that the U.S. economy expanded at a 2.4% annualized rate in 2Q23, up from a revised 2.0% in 1Q and above the Bloomberg consensus forecast of 1.8% growth. On the employment front, first-time claims for state unemployment benefits fell by 7,000 to a seasonally adjusted 221,000 for the week ended July 22, below the Bloomberg consensus of 235,000. Continuing claims fell by 59,000 to 1.69 million. The Dow fell 0.67%, the S&P 0.64%, and the Nasdaq 0.55%. Crude oil rose more than 1% to $80 per barrel, while gold fell $26 to $1944 per ounce.

Stocks rose modestly on Friday morning, extending Thursday's rally. Exxon shares rose after the company reported strong 1Q earnings that topped the consensus forecast, though sales were down from the prior year. Chevron also posted strong earnings, helped by growth in its refining business. Amazon shares fell, despite strong first-quarter results, on concerns about slowing growth in the company's cloud business. The Dow rose 0.5%, the S&P 0.5%, and the Nasdaq 0.2%. Crude oil rose more than 2% to $76.50 per barrel, while gold traded near $1999 per ounce.

Small- and mid-cap stocks (SMID) have underperformed large-caps over the past 12 months, but may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine, high European inflation or other geopolitical developments. As well, the prices of SMID stocks generally are lower than the prices of large-caps. SMID stocks can be risky, but diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 12%-15% of the U.S. stock market's capitalization is comprised of SMID stocks. For our purposes, we use a threshold of $15 billion to define a SMID stock.

Purchasing managers (representing manufacturing sectors) have delivered mostly negative outlooks for several months, due in part to rampant inflation, supply-chain woes, the Russian invasion of Ukraine, and higher interest rates. In fact, most manufacturing sectors are contracting, but we note that the several key economies may have bounced off a trough or are nearing a turnaround. A case in point is China, which had a Purchasing Managers Index reading of 49.5 in 4Q22 and is now in positive territory at 52.6% (as a reading above 50% indicates an expanding manufacturing segment). Manufacturing stalwart Germany's most-recent PMI reading was 46.3, but surveys noted that supply-chain pressures were easing and delivery times were improving. In the UK, the latest PMI reading was 49.3% versus 47.3% in the prior quarter. Japan is an outlier in this trend, having recently reported a PMI of 47.4, indicating that manufacturing is shrinking at the fastest pace in over two years. The U.S. is not much better, having reported a February PMI reading of 47.8%, up from 47.4% in the prior month. Yet other domestic industrial indicators remain mostly positive. Total manufacturing new orders rose 1.8% month-over-month in December, and are 8% higher year-over-year. Nondefense capital goods excluding aircraft were slightly lower month-over-month in December, but have risen 6% year-over-year; meanwhile durable goods orders jumped 5.5% month-over-month in December to $287 billion. Capacity utilization is running at 78.3%, above the 20-year average of 76.8%. Still, these are historical growth rates. The PMI data continues to point to a difficult environment for U.S. manufacturing.

Stocks plunged on Thursday afternoon on concerns about the February employment report on Friday morning and its implications for upcoming Fed rate hikes. The Reuters consensus calls for the addition of 205,000 payroll jobs in February, down from 517,000 in January, and a flat unemployment rate of 3.4%. The collapse in the shares of SVB Financial, prompted by the announcement of an equity offering and a loss on the sale of the company's bond portfolio, also drove a sharp selloff in bank stocks. The Financial Services sector fell more than 4%. The Dow fell 1.66%, the S&P 1.85%, and the Nasdaq 2.05%. Crude oil fell slightly to $75.50 per barrel, while gold rose $16 to $1835 per ounce.

Stocks surged on Thursday following positive inflation data, recording their strongest one-day advance since 2020. The Labor Department said that its consumer price index rose 7.7% from the prior year in October, down from 8.2% in September and below the consensus forecast of 7.9%. The core CPI, excluding food and energy, also rose at a lower-than-expected 6.3% rate. On the employment front, first-time claims for state unemployment benefits rose by 7,000 to 225,000 for the week ended November 5, slightly above the consensus forecast. Continuing claims rose to 1.493 million, also up from the prior week and above consensus. The Dow soared 3.70%, the S&P 5.54%, and the Nasdaq 7.35%. Crude oil rose slightly to $86 per barrel, while gold jumped $47 to $1760 per ounce.

Small- and mid-cap stocks (SMID stocks) have underperformed large-caps over the past 12 months, but still may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine. As well, the prices of SMID stocks generally are lower than the prices of large-caps. SMID stocks can be risky -- and large-caps outperformed SMID stocks in 11 of the 19 years in our test period. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 12%-15% of the U.S. stock market's capitalization is comprised of SMID stocks. For our purposes, we use a threshold of $20 billion to define a SMID stock.

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.

Earnings season continues today, with reports from Exxon, Procter & Gamble, and Abbvie. On Thursday, Apple and Amazon reported better-than-expected results after the bell. The major indices rose strongly despite weaker-than-expected GDP data, as the Commerce Department reported that the U.S. economy contracted at a 0.9% pace in 2Q. On the employment front, first-time claims for state unemployment benefits fell to 256,000 for the week ended July 23, down from 261,000 a week earlier. The Dow rose 1.03%, the S&P 1.21%, and the Nasdaq 1.08%. Crude oil rose slightly to $97 per barrel, while gold rose 2% to $1773 per ounce.

Stocks plunged on Thursday, more than wiping out their gains in Wednesday's rally, as investors reassessed the impact of rising interest rates and the Fed's ability to control inflation. On the employment front, first-time claims for state unemployment benefits rose to 200,000 for the week ended April 30, up from 181,000 a week earlier and above the consensus estimate. The data came ahead of the government's April employment report on Friday morning. The Reuters consensus calls for 391,000 new payroll jobs after a gain of 431,000 in March. The Dow fell 3.12%, the S&P 3.56%, and the Nasdaq 4.99%. Crude oil traded near $108 per barrel, while gold rose $9 to $1878 per ounce.

Small- and mid-cap stocks (SMID stocks) have underperformed large-caps over the past 12 months, but still may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine. As well, the prices of SMID stocks generally are lower than the prices of large-caps. That said, SMID stocks can be risky and large-caps outperformed SMID stocks in 11 of the 19 years in our test period. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 12%-15% of the U.S. stock market's capitalization is comprised of SMID stocks. For our purposes, we use a threshold of $20 billion to define a SMID stock.

Volatility, in both indices and individual stocks, remains extreme. Once a market pulls back by a decent amount (8%-10%) or correct (11%-20%), it is typical for that market to be wild from day to day, and even week to week. A new trading range for many stocks and indices is being hammered-out right now -- and the process usually takes some time (assuming a low is in) to complete a bottom.

Stocks fell sharply on Tuesday morning on more signs of accelerating inflation. The Labor Department said that its producer price index rose 9.6% in the 12 months through November, up from 8.8% in October and above the Reuters consensus forecast of 9.2%. The core PPI, excluding food and energy, rose 6.9%, up from 6.3% in October. The Dow fell 0.5%, the S&P 1.2%, and the Nasdaq 1.9%. Crude oil fell 2.5% to $69.50 per barrel, while gold fell $14 to $1774 per ounce.

Stocks rose on Thursday morning, despite a weaker-than-expected GDP report, as investors continued to focus on strong third-quarter earnings. The Commerce Department said that U.S. GDP rose at a 2.0% annualized rate in 3Q, the weakest reading since 2Q20 and below the Reuters consensus forecast of 2.7% growth. The Dow rose 0.5%, the S&P 0.8%, and the Nasdaq 1.2%. Crude oil fell to $82 per barrel, while gold traded near $1800 per ounce.

This edition features opportunities in the great outdoors; a smart but pricey water play; sustainable air travel; and notes from Align, Tesla, and Conagra.

Small- and mid-cap stocks (SMID stocks) soared in 2019. They have underperformed large-caps over the past 12 months, but still may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be poised to rebound more quickly once COVID-19 vaccines are more widely distributed and the domestic service economy recovers. As well, the prices of SMID stocks generally are lower than the prices of large-caps. That said, SMID stocks can be risky. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. Investors used to use a $2 billion market-cap threshold to define a small-cap stock and a $10 billion threshold for a mid-cap. The Russell 2000 index now includes numerous companies with market capitalizations above $15 billion. For our purposes, we use a threshold of $20 billion to define a SMID stock.

Stocks Stumble as the Economy Moves Ahead

The Labor Department's nonfarm payrolls report for June will be released on Friday, July 2. This report is always eagerly awaited by investors and Friday's version may even be more important than usual. That's because the reports from April and May both came in below consensus forecasts, raising questions about whether the recovery in the U.S. economy is stalling. Recall that the U.S. workforce added on average only 415,000 jobs in April-May, below the recent trend (650k) and below expectations (900k). On the positive side, the unemployment rate in May declined to 5.8%. At this point, the market is waiting to see if recent results are outliers in a positive trend, or the start of a slowdown. We are inclined to think the two datapoints are outliers. For one thing, another employment measure, the ADP payroll reports for April-May, indicated that employers added on average 871,000 jobs -- the most since last fall. For another, in recent weeks, unemployment claims have continued to fall, to 398,000 on a four-week rolling average from 458,000 a month ago. As the U.S. vaccination count rises (46% of U.S. adults are fully vaccinated), service workers are being called back to their jobs. Our June forecast calls for an improvement in payrolls to 650,000.

Stocks kept the momentum going in April, and are now up almost 12%, including dividends, in the year-to-date. Our analysts have been progressing through earnings season, and have come across many stocks in coverage that have approached target prices. We set target prices through our valuation framework, which includes analysis of historical multiples, peer multiples, future dividends, and cash flows. After adjusting the models for the latest earnings and dividend information -- most of which has been good -- here are some of the stocks on which we have raised target prices over the past month. All stocks are rated BUY at Argus.

The Labor Department's nonfarm payrolls report for April 2021 will be released on May 7, 2021. The headlines on the jobs front have been brightening for several months, as COVID-19 vaccines have been distributed and administered. But there is still wood to chop. Last month, employers added 916,000 jobs, including 280,000 in leisure and hospitality. We look for the jobs data to continue improving in the months ahead. In recent weeks, unemployment claims have continued to fall, to 547,000 from 781,000 a month ago; continuing claims dropped to 3.7 million from 4.1 million last month. Our forecast calls for growth of 900,000 in payrolls for April. The report will also include the latest reading on unemployment, which declined last month to 6.0% from 6.2%. Part of the challenge for the Federal Reserve and the Biden administration will be to both lower this rate down toward 4.0% and also to bring back workers who have either retired or have become discouraged and have left the workforce. The labor participation rate is a low 61.5%, versus a 10-year average of 65%. As people re-enter the labor force, we expect to see an offset against jobs growth and thus are forecasting a flat unemployment rate of 6.0%.

The stock market moved lower last week, then rallied on Friday, ultimately finishing flat-to-down. Tech stocks and blue chips performed similarly, with tech narrowly outperforming. During Friday's session, the Dow Jones Industrial Average increased 228 points, or 0.67%. The S&P 500 was up 1.09%, and the Nasdaq Composite was up 1.44%. For the week, the DJIA was down 0.46%, the S&P 500 was up 0.13%, and the Nasdaq Composite was down 0.25%. Year-to-date, the DJIA is up 11.23%, the S&P 500 is up 11.29%, and the Nasdaq Composite is up 8.76%.

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 Day Traders Strike Back: Our Monthly Survey of the Economy, Interest Rates, and Markets

Stocks seem to be climbing the current wall of worry quite nicely. The election process appears to be headed towards resolution, D.C. gridlock (supposedly favored by Wall Street) is likely, and optimism about a vaccine for COVID-19 is on the rise (along with new case counts we must add). That all left the Dow Jones Industrial Average at 29,479 as of the close of trading on November 13 (of all dates) as compared to 26,501 at the close of the trading week on 11/2/20 (a mere 11 days earlier). That all sounds pretty good. So what is the status of the proprietary insider-sentiment barometers from Vickers Stock Research?

This edition features our outlook for the future of office work; newly legal sports betting; and notes from Inter Pipeline, Harley-Davidson, and new coverage Teleflex.