Management's ability to "raise guidance" can often be a catalyst for market-beating returns in the quarters ahead. The fourth-quarter earnings season has crossed the 95% mark and is wrapping up, with blended earnings (actual results and the consensus for those still to report) showing a year-over-year gain of almost 10%, according to Refinitiv. That is considerably better than the 4%-7% advance expected at the start of the earnings period. Leading the outperformance were strong gains in Communication Services earnings, up 53%. On the flipside, Energy (like last quarter) is performing the worst, down 22%. Our analysts are always on the lookout for companies that boost their outlooks during earnings season. Here is an initial list of BUY-rated companies in Argus' Fundamental Universe of Coverage at which management raised guidance or increased its outlook during the 4Q23 EPS reporting season.

Over the past two weeks, insider-transaction data from Vickers Stock Research generated worrisome sentiment indicators for Nasdaq-listed companies. This week, the cautionary signals are off the charts. Let's dig deeper.

Management's ability to "raise guidance" can often be a catalyst for market-beating returns in the quarters ahead. The third-quarter earnings season is wrapping up, with blended earnings (actual results and the consensus for those still to report) showing a 6.3% gain, year-over-year, according to Refinitiv. That is considerably better than the 1.0% expected at the start of the earnings period, and should be enough to end the "earnings recession" that investors have endured over the past three quarters. Propelling the 3Q outperformance were strong gains in Communication Services, up 46%, while Energy again (like last quarter) is performing the worst, down 33%. Our analysts are always on the lookout for companies that boost their outlooks during earnings season. Here is an initial list of BUY-rated companies in Argus Coverage at which management raised guidance or increased its outlook during the 3Q23 EPS reporting season.

Monday Tee Up: Here Comes Big Tech

Stocks rose on Monday morning as investors awaited earnings from major Tech companies and the Fed's interest rate decision later this week. Business activity data was mixed. S&P Global said that its flash Services PMI fell to 52.4 in July, down from 54.4 in June and below the Reuters consensus forecast of 54.0. At the same time, the Manufacturing PMI rose to 49.0 from 46.3 in June and came in above the consensus estimate. The Dow rose 0.5%, the S&P 0.4%, and the Nasdaq 0.3%. Crude oil rose more than 1% to $78 per barrel while gold fell $5 to $1962 per ounce.

Stocks rose on Monday morning as investors awaited earnings from major Tech companies and the Fed's interest rate decision later this week. Business activity data was mixed. S&P Global said that its flash Services PMI fell to 52.4 in July, down from 54.4 in June and below the Reuters consensus forecast of 54.0. At the same time, the Manufacturing PMI rose to 49.0 from 46.3 in June and came in above the consensus estimate. The Dow rose 0.5%, the S&P 0.4%, and the Nasdaq 0.3%. Crude oil rose more than 1% to $78 per barrel while gold fell $5 to $1962 per ounce.

Our list this week identifies companies that received an Argus target-price increase in April. As the stock prices of these companies approached their target prices, Argus analysts saw those prices going even higher. We are in the thick of earnings season and our analysts are scouring quarterly reports to evaluate how the companies they follow are doing. With economists busy analyzing economic data to determine whether the economy might slip into recession, companies have been attending to their businesses. Some are weathering current economic conditions better than others. The economic pressures are real - including rising interest rates, inflation, the strong dollar, and wavering consumer spending patterns. These stressors are on top of normal competitive pressures, as companies fight to sell their products and services, outmaneuver peers, and make profits. Looking back at April, our analysts found companies where the business outlook is solid - and went through the mechanics of our valuation framework to adjust target prices upwards. Our framework includes analysis of historical multiples, peer multiples, and future dividends and cash flows. Here are the stocks on which we raised target prices in April. All are rated BUY at Argus.

Stocks fell on Monday morning as investors awaited results later this week from a range of major companies, including Alphabet, Microsoft, and Amazon. Coca-Cola shares rose modestly after the company reported stronger-than-expected first-quarter sales and earnings, helped by price increases. Bed Bath & Beyond plunged 35% following its bankruptcy filing. The Dow fell 0.2%, the S&P 0.3%, and the Nasdaq 0.9%. Crude oil rose 1% to $79 per barrel while gold rose $3 to $1994 per ounce.

Monday Tee Up: Inflation and Earnings

Stocks rose on Monday morning as investors weighed more third-quarter earnings reports and new manufacturing and services data. S&P Global said that its U.S. composite purchasing managers' index fell to 47.3 in October from a final reading of 49.5 in September, the fourth straight monthly decline. In China, the National Bureau of Statistics reported that GDP rose at a 3.9% rate in the third quarter, up from just 0.4% in 2Q and above the Reuters consensus forecast of 3.4%. The release was delayed from its originally scheduled date of October 18. The Dow rose 1.2%, the S&P 1.0%, and the Nasdaq 0.4%. Crude oil traded near $85 per barrel, while gold fell slightly to $1656 per ounce.

Stocks were mixed on Monday morning at the start of another busy week for earnings, which will include reports from Alphabet, Microsoft, Pfizer, and Exxon. Investors will also see another Fed interest rate hike along with economic commentary on Wednesday. A 75-basis-point increase is widely expected. As of midday on Monday, the Dow rose 0.3%, the S&P was flat, and the Nasdaq fell 0.4%. Crude oil rose slightly to $95 per barrel, while gold fell $11 to $1716 per ounce.

As we start the second half of 2022, we remain disciplined by looking at stocks and sectors in which we have confidence. Stocks took a beating in the first half, and at times like this, investing principles are critical. This week, we look at Basic Materials. This is not a flashy sector, often overlooked because other sectors garner headlines where consumers are more familiar with brand names. That's partly why we like the sector (it's under-the-radar), but that's not enough. The companies we examine within the sector have to stand on their own, with solid fundamentals and growth outlooks. Challenges in the supply chain persist, but have eased. Inflation is high and the Fed is raising interest rates to quell higher prices. In this environment, we expect demand for commodities to remain robust and for pricing to remain strong. The sector currently accounts for 2.8% of the S&P 500, and includes industries such as chemicals, paper, metals, and mining. Over the past five years, the weighting has ranged from 2% to 4%. We think investors should Over-Weight the sector and allocate 3% of diversified portfolios to stocks in the sector. Basic Materials is slightly over-performing the S&P 500 thus far in 2022, with a loss of 18.7% compared to the S&P's loss of 20.6%. Here are some of our BUY-rated Basic Materials companies, which were selected using the Argus screening tool and requiring that the stocks be BUY-rated and with an Argus Financial Strength rating of at least Medium-High. We feel these companies currently are best in class for this sector. Some of these companies also are included in our Model Portfolios.

Stocks have struggled in 2022, but insider-sentiment readings from Vickers Stock Research have not at any time suggested a full-on dash to the exits is in order. In general, insiders have bought the dips.

Stocks rose on Monday morning as investors awaited earnings from major tech companies this week. Facebook will report after the close on Monday. Tesla shares rose nearly 6% after the company reported that Hertz had ordered 100,000 Tesla cars. The Dow rose 0.2%, the S&P 0.3%, and the Nasdaq 0.5%. Crude oil rose to more than $84 per barrel, while gold traded near $1809 per ounce.

Stocks Stumble as the Economy Moves Ahead

The stock market moved higher last week as earnings season got underway and volatility continued its downward trend. Tech stocks performed roughly in line with blue chips. During Friday's session, the Dow Jones Industrial Average increased 165 points, or 0.48%. The S&P 500 was up 0.36%, and the Nasdaq Composite was up 0.10%. For the week, the DJIA was up 400 points, or 1.18%, the S&P 500 was up 1.37%, and the Nasdaq Composite was up 1.09%. Year-to-date, the DJIA is up 11.74%, the S&P 500 is up 11.43%, and the Nasdaq Composite is up 9.03%.

Stocks fell on Monday morning, giving up early gains amid concerns about congressional opposition to the Biden administration's $1.9 trillion stimulus plan and the impact of new coronavirus variants. Moderna shares rose more than 7% after the company said that it was developing a new version of its COVID-19 vaccine to better target a rapidly spreading South African variant of the disease. Meanwhile, Merck said that it would halt the development of its COVID vaccines after disappointing clinical trial data. The Dow fell 1.1%, the S&P 0.7%, and the Nasdaq 0.2%. Crude oil traded near $52 per barrel, while gold fell $4 to $1852 per ounce.

Growth stocks outperformed value, again, in 2020. But in an environment of historically low interest rates (and with the coronavirus and a high unemployment rate seemingly poised to keep them low for a long time), many investors are searching for high levels of income, often be found in value stocks. During recent years, the performance record has favored growth. Since 2010, the Russell 1000 Growth Index has climbed more than 400%, compared to an advance of 200% for the Russell 1000 Value Index. In eight of the past 10 years, growth stocks topped value. That hasn't always been the case. In the previous decade, including the Great Recession, value stocks were better performers, advancing a low 8%, but still better than growth, which declined 15%. Value investors trace their roots to the famous "Security Analysis" textbook, written by Ben Graham, an economics professor at Columbia University. The tide may now be turning. Progress on COVID-19 vaccines has given a lift to some of the cyclical companies (energy companies and banks) that have lagged in recent quarters, and value stocks have kept pace with growth stocks in the past quarter. In any event, value is the place to achieve income. The current yield on the iShares Russell 1000 Value Index ETF is 2.5%, compared to the 1.0% current yield on the iShares Russell 1000 Growth Index ETF. This is not unimportant, as the current yield on the 10-year Treasury bond is 0.95%. For our list this week, we have screened our coverage universe for stocks that are BUY-rated by Argus Research analysts, have a Financial Strength rating of at least Medium, and have a yield of 3.0% or higher.

The Portfolio Selector features the Argus Focus List, a group of 30 "best idea" stocks generated and regularly updated by Argus' analysts and investment policy committee. It also includes the director of research’s monthly investment strategy column, stock recommendations and sector picks, economic forecasts, and an asset allocation model. This month, the Focus List additions are Trane Technologies plc (TT); Linde Plc (LIN); Western Digital Corp. (WDC); Peloton Interactive Inc (PTON) and the Focus List deletions are PPG Industries, Inc. (PPG); Roper Technologies Inc (ROP); Snap Inc (SNAP); TJX Companies, Inc. (TJX).

Stocks gave up early gains on Wednesday morning amid mixed earnings reports, as investors awaited new developments in the fiscal stimulus talks. Verizon posted better-than-expected adjusted 3Q earnings and raised its full-year guidance, but missed the consensus revenue estimate. Abbott Labs, which received approval for its rapid COVID-19 test in August, reported stronger-than-expected 3Q revenue and earnings and boosted its full-year guidance. The Dow fell 0.3%, the S&P 0.2%, and the Nasdaq 0.2%. Crude oil traded near $40 per barrel, while gold rose $18 to $1933 per ounce.

Trade issues hammered commodities during 2018-2019, and then the coronavirus piled on. Copper prices were down 28% in April from 2018 highs as construction stalled. Oil prices plunged 75%. Meanwhile, soybean prices have remained relatively steady over the past 12 months, and the price of gold has surged as investors have fled riskier assets. Commodities investors are accustomed to volatility. The last time the commodities market bottomed was in January 2016, when oil prices were below $30 per barrel and copper was below $4,500 per metric ton, according to the World Bank. But recoveries tend to be sharp. Since the April lows, oil has more than doubled and copper is up almost 15%. We think underlying long-term economic fundamentals are favorable for most commodities (except oil), but project ongoing volatility from the virus. A stable or falling dollar would help. With the virus still spreading, risk remains high and our sector recommendation for Basic Materials is Under-Weight. The current market weighting of the sector is 2.4%, and we think investors should consider exposure of 2%-3% in diversified portfolios. We recommend well-managed, financially strong industry leaders that are able to take market share during challenging periods for the Chemical, Metals, Ag and Paper industries.

Stocks were mixed on Friday, echoing an unsettled week in which blue chip indexes rose but formerly hot growth stocks cooled off. Stocks were volatile all week as investors weighed steadily rising new COVID-19 case numbers and deaths against surprisingly strong economic data including retail sales, housing starts and permits, and industrial production. On Friday, The Dow Jones Industrial Average fell 63 points, or 0.2%. The S&P 500 and the Nasdaq Composite both increased 0.3%. For the full week, the Dow increased 2.3%. The S&P 500 was up 1.3%, and the Nasdaq fell 1.1%. Year-to-date, losses are now 6.5% for the Dow and 0.2% for the S&P 500, while the Nasdaq is up 17.1%. Over the past 52 weeks, the Dow is down 1.8%, while the S&P 500 is up 8.3%, and the Nasdaq is up 28.9%.

Stocks were mixed on Friday, echoing an unsettled week in which blue chip indexes rose but formerly hot growth stocks cooled off. Stocks were volatile all week as investors weighed steadily rising new COVID-19 case numbers and deaths against surprisingly strong economic data including retail sales, housing starts and permits, and industrial production. On Friday, The Dow Jones Industrial Average fell 63 points, or 0.2%. The S&P 500 and the Nasdaq Composite both increased 0.3%. For the full week, the Dow increased 2.3%. The S&P 500 was up 1.3%, and the Nasdaq fell 1.1%. Year-to-date, losses are now 6.5% for the Dow and 0.2% for the S&P 500, while the Nasdaq is up 17.1%. Over the past 52 weeks, the Dow is down 1.8%, while the S&P 500 is up 8.3%, and the Nasdaq is up 28.9%.

Stocks fell on Thursday, reversing some of Wednesday's gains amid weak employment and consumer spending data. First-time unemployment benefit claims fell from the prior week, but still totaled 3.839 million - bringing the six-week total to more than 30 million. Consumer spending also plunged a record 7.5% in March, greater than the consensus call for a 5.0% decline. Meanwhile, the Federal Reserve expanded its 'Main Street' lending program to help medium-sized businesses. The Dow fell 1.17%, the S&P 0.92%, and the Nasdaq 0.28%. Crude oil rose to nearly $19 per barrel, while gold fell $18 to $1695 per ounce.

Stocks fell on Thursday, reversing some of Wednesday's gains amid weak employment and consumer spending data. First-time unemployment benefit claims fell from the prior week, but still totaled 3.839 million - bringing the six-week total to more than 30 million. Consumer spending also plunged a record 7.5% in March, greater than the consensus call for a 5.0% decline. Meanwhile, the Federal Reserve expanded its 'Main Street' lending program to help medium-sized businesses. The Dow fell 1.17%, the S&P 0.92%, and the Nasdaq 0.28%. Crude oil rose to nearly $19 per barrel, while gold fell $18 to $1695 per ounce.

PPG is a global producer of coatings. The company is the world's largest producer of coatings after the purchase of selected AkzoNobel assets. PPG's products are sold to a wide variety of end users, including the automotive, aerospace, construction, and industrial markets. The company has a footprint in many regions around the globe, with less than half of sales coming from North America in recent years. PPG is focused on its coatings and specialty products and expansion into emerging regions, as exemplified by the Comex acquisition.

The Portfolio Selector features the Argus Focus List, a group of 30 "best idea" stocks generated and regularly updated by Argus' analysts and investment policy committee. It also includes the director of research’s monthly investment strategy column, stock recommendations and sector picks, economic forecasts, and an asset allocation model. This month, the Focus List additions are Equinix Inc (EQIX); Square Inc (SQ); PPG Industries, Inc. (PPG); TEGNA Inc (TGNA) and the Focus List deletions are Activision Blizzard Inc (ATVI); Equity Residential Properties (EQR); ServiceNow Inc (NOW); Packaging Corp of America (PKG).

The Portfolio Selector features the Argus Focus List, a group of 30 "best idea" stocks generated and regularly updated by Argus' analysts and investment policy committee. It also includes the director of research’s monthly investment strategy column, stock recommendations and sector picks, economic forecasts, and an asset allocation model. This month, the Focus List additions are Equinix Inc (EQIX); Square Inc (SQ); PPG Industries, Inc. (PPG); TEGNA Inc (TGNA) and the Focus List deletions are Activision Blizzard Inc (ATVI); Equity Residential Properties (EQR); ServiceNow Inc (NOW); Packaging Corp of America (PKG).

Stocks rose on Friday, aided by a favorable housing starts figure and strong gains for technology stocks. The Dow Jones Industrial Average rose 0.2%, the Nasdaq Composite added 0.3% and the S&P 500 was up 0.4%. For the week, positive news on twin trade deals, including the signing of a Phase I deal with China and the Senate passage of the replacement NAFTA, helped maintain a continuation of the recent stock rally. The Dow climbed 1.8%, while the Nasdaq was higher by 2.3% and the S&P 500 rose 2.0%. Year-to-date gains are now 2.8% for the Dow, 4.6% for the Nasdaq and 3.1% for the S&P 500.