We see what we believe are some great opportunities right now in Healthcare -- and we like the sector overall. Argus Director of Research Jim Kelleher, CFA, recently completed his quarterly sector review and raised Healthcare sector to Over-Weight from Market-Weight. The healthcare environment is undergoing rapid transitions, and we now see an unfolding period of significant promise and opportunity. Our newly-favored stance is based on resumption of deferred medical procedures and significant new quality-of-life drugs and treatments. The category is broad and has underperformed the S&P 500 over the past year. The Healthcare sector ETF (XLV) is up 15% over the past year compared to a gain of 31% for the S&P 500. We see opportunity here to pick up some steady companies, with big brands and solid financials. These companies are science-focused and enhance lives. They are innovators. In our list this week, we look across several subsectors within the Healthcare sector and pull out some leaders we like. These stocks also are included in our Focus List and Model Portfolios, as noted below.

U.S. markets were mixed on Friday intraday following yesterday's rally. Recent comments from Fed officials indicate that the timing of the first interest rate is likely to come later rather than sooner. On the earnings front, shares of Carvana (CVNA) are up 33% after reported its first profitable year. The Nasdaq fell 0.1%, the S&P 500 was up 0.13% and the Dow gained 0.3%. Crude oil fell $2 to $76.55 per barrel, while gold rose $17 to $2048 per ounce.

Monday Tee Up: Earnings and Powell

The Nasdaq and the Nasdaq 100 (QQQ) fell slightly under their 50-day averages late in the trading week ended August 11, which we don't consider a break of this key short-term support. The last time the indices were below their 50-day was in March. They have dipped 5% from closing highs on July 18 and also are slightly below trendline support off March lows.

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 Tesla Inc (TSLA); Walmart Inc (WMT); Merck & Co Inc (MRK); Adobe Inc (ADBE) and the Focus List deletions are DraftKings Inc. (DKNG); Dell Technologies Inc (DELL); Thermo Fisher Scientific Inc. (TMO); Coca-Cola Co (KO).

Dividend income is often overlooked amid gyrations in the stock market. Thus far in 2023, market bulls are boasting about first-half S&P 500 returns that may top 15%. No one is very focused on the broad market index's 1.6% current yield. But dividends are an important element of return. Dividend income accounted for 42% of the total return of the S&P 500 between 1930 and 2012, according to Hartford Funds. And that's just the average. In some of those decades, dividends accounted for more than 50% of total returns and even 100% of returns. More recently, dividends have accounted for a smaller portion of returns, at around 15%-20%. In 2018, dividend payments softened the blow when most market indices declined as the Fed hiked rates. The pattern was repeated in 2022. Not all dividends are created equal, though, and it is important to understand the difference between the two main categories: high-yield stocks and dividend-growth stocks.

While the major indices had another solid day on June 12 (again led by the 2023 standouts) and were doing very well as of this writing (midday June 13), the average stock underperformed on June 12 and the broad-based NYSE and the small-caps barely participated. The S&P 500 tacked on another 0.9%, the Nasdaq ripped higher by 1.5%, and the Nasdaq 100 surged by 1.8%. The NYSE rose 0.3%, the Russell 2000 was up 0.4%, the S&P 600 SmallCap rose 0.2%, and the S&P MidCap 400 gained 0.6%. It was a typical trading day for 2023.

Artificial Intelligence (AI) is red-hot on Wall Street. Microsoft's ChatGBT and Nvidia's super-fast chips are driving the massive computational power behind AI and getting most of the attention. But companies in the Healthcare sector have been using AI for years and offer another path for investing in AI. Our below list, provided by Senior Healthcare Analyst David Toung, looks at some of the BUY-rated Healthcare companies in our coverage universe that stand out for their use of AI. By no means is this survey as complete listing of how AI is used in healthcare - but here are the BUY-rated Healthcare companies under coverage at Argus Research that we highlight today.

Innovation may be hard to define. But to borrow from former U.S. Supreme Court Justice Potter Stewart, you know it when you see it. The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where labor and materials costs are lower. Yet the U.S. economy, even during the pandemic and the current period of high inflation, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as vaccines) and services (such as Zoom calls) and moving into new markets and applications, the domestic economy would not be growing, and capital would not be flooding into the country. The current high level of the U.S. dollar relative to currencies around the world attests to the confidence that global investors have in the durable and innovative U.S. economy.

California is expecting less snow going forward than it had in the past week. Indeed, residents in areas around Los Angeles may soon put away their snow shovels. So the trend is improving, but the bigger picture remains of concern. That also can be said of insider sentiment.

Argus has published its latest Portfolio Selector, which features its popular Focus List. Each month, Director of Research Jim Kelleher, CFA, surveys the team of Argus Research industry analysts for their timeliest recommendations out of the company's fundamental universe of over 500 stocks. The Focus List typically includes 30 stocks: turnover is high, as Jim typically adds three or four new stocks per month. Below are the latest additions, all of which are rated BUY at Argus.

The Consumer Price Index report released on December 13 indicated that inflation pressures eased more than expected in the U.S. during November, sparking a broad rally in the financial markets. The Bureau of Labor Statistics reported a 7.1% increase in overall inflation year-over-year through November, compared to a 7.7% rate through October, and an 8.2% rate through September. The core rate excluding the impact of food and energy prices, also declined -- to 6.0% in November, versus 6.3% in the prior month. The consensus forecasts had called for a 7.3% inflation rate and a 6.1% core rate. The overall rate benefited primarily from falling energy prices (down 1.6% month-over-month), as well as from lower prices for used cars, commodities, medical care services and even transportation. The increase in food prices moderated a bit. But food and shelter prices remained on the rise (up 0.5% and 0.6% month-over-month, respectively) and fuel oil prices increased 1.7% month-to-month. Looking ahead, we continue to think that the July 9.1% CPI rate will prove to have been the peak reading for the index in 2022, as the housing market cools off, supplies of new vehicles are replenished, and the price of oil stays below $90 per barrel. Even so, the Federal Reserve still has wood to chop in order to bring core inflation down to its target of 2.0%. We continue to look for a 50-basis-point rate hike by the central bank at its current meeting, and for at least one more increase in 1Q23.

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 Corteva Inc (CTVA); Dell Technologies Inc (DELL); Exxon Mobil Corp. (XOM); Thermo Fisher Scientific Inc. (TMO) and the Focus List deletions are Linde Plc (LIN); Lilly(Eli) & Co (LLY); ASML Holding NV (ASML); EOG Resources, Inc. (EOG).

Vickers Stock Research, a subsidiary of Argus Research Group, tracks and analyzes insider trading and institutional ownership trends. Form 13-Fs are due 45 days after the end of calendar quarters, and have now come in from 3Q22. We like to review the 13Fs of the major activist investors, including Carl Icahn, Trian Fund Management, Jana Partners, and ValueAct Holdings (among others) in order to determine their core holdings and new purchases. Activist investing has evolved in recent years and is now less about generating a short-term return on an underpriced stock and more about achieving long-term returns through an active management/investor partnership. Here are some recent new purchases and key holdings of Activist investors, according to Vickers.

Stocks rose on Tuesday morning following more signs of cooling inflation. The Labor Department said that its producer price index rose 8.0% from the prior year in October, down from 8.4% growth in September and below the Bloomberg consensus forecast of 8.3%. On the earnings front, Walmart and Home Depot both rose after reporting better-than-expected sales and earnings. The Dow rose 0.7%, the S&P 1.3%, and the Nasdaq 2.2%. Crude oil fell slightly to $85 per barrel, while gold fell $2 to $1775 per ounce.

Innovation may be hard to define. But to borrow from former U.S. Supreme Court Justice Potter Stewart, you know it when you see it. The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where labor and materials costs are lower. Yet the U.S. economy, even during the pandemic and the current period of high inflation, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as vaccines) and services (such as Zoom calls) and moving into new markets and applications, the domestic economy would not be growing, and capital would not be flooding into the country. The current high level of the U.S. dollar relative to currencies around the world attests to the confidence that global investors have in the innovative U.S. economy.

Stocks rose strongly on Thursday following solid earnings reports from Macy's and other retailers, and a major Tech sector acquisition, as chipmaker Broadcom announced that it would purchase VMware for $61 billion. On the economic front, the Commerce Department reported that U.S. GDP contracted at a 1.5% annualized rate in 1Q, a slight weakening from its initial estimate of a 1.4% decline, and down from 6.9% growth in the fourth quarter. Employment data was slightly better than expected. First-time claims for state unemployment benefits fell to 210,000 for the week ended May 21, down from 218,000 a week earlier and below the consensus estimate of 215,000. The Dow rose 1.61%, the S&P 1.99%, and the Nasdaq 2.68%. Crude oil traded near $114 per barrel, while gold rose $3 to $1850 per ounce.

Innovation may be hard to define. But to borrow from former U.S. Supreme Court Justice Potter Stewart, you know it when you see it. The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where costs are lower. Yet the U.S. economy, even during the pandemic, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as vaccines) and services and moving into new markets and applications, the domestic economy would not be growing, and capital would not be flooding into the country. Consider that U.S. GDP was approximately $1 trillion in 1930 but was more than $24 trillion at the end of 2021. That's growth of 24-times. Meanwhile, the U.S. population has grown less than three-times during that time span, to 320 million from 120 million. The delta between GDP growth and population growth has been driven, in large part, by innovation.

Our rating on the Healthcare sector is Over-Weight. Consumers are now 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, should benefit from efforts to contain the pandemic. The sector accounts for 13.7% of the S&P 500, and includes companies in the pharmaceuticals, medical devices, healthcare services, and insurance industries. The sector is outperforming the market thus far in 2022, with a gain of 1.3% through early April, while the S&P 500 has declined 6%. The following are examples of how we use our analysts' Healthcare sector ideas in our Focus List and Model Portfolios. All stocks are rated BUY at Argus.

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 were mixed on Friday morning following a strong monthly employment report. The Labor Department said that the U.S. economy added 467,000 payroll jobs in January, well above the consensus forecast of 125,000. The report also showed a strong increase in December payrolls, which were revised up to 510,000 from the 199,000 reported last month. The official unemployment rate edged up to 4.0% from 3.9% in December. The Dow fell 0.3%, the S&P was flat, and the Nasdaq rose 0.8%. Crude oil jumped to nearly $93 per barrel, while gold traded near $1808 per ounce.

Often overlooked amid gyrations in the stock market is dividend income, which is an important element of total return. Between 1930 and 2012, dividend income accounted for 42% of total return of the S&P 500, according to Hartford Funds. And that's just the average. In some decades, dividends accounted for more than 50% of total returns and even 100% of returns. More recently, dividends have accounted for 15%-20% of returns. Still, in 2018, dividend payments softened the blow when most market indices declined as the Federal Reserve hiked rates. But not all dividends are created equal, though, and it is important to understand the difference between the two main categories: high-yield stocks and dividend-growth stocks.

In our view, the Life Sciences segment of the U.S. Healthcare industry is poised for strong growth over the next few years. This is the part of the industry that is developing the next generation of gene therapies, oncology biologics, and vaccines. Gene therapy holds promise for many diseases, but today serves only as an alternative treatment for some rare diseases. After a period of stagnation, gene therapy has experienced a renaissance, due largely to significant advances in technology and manufacturing scale. Scientists have developed safer, more-efficient viral vectors with better targeting capability. As such, the future for gene therapy appears bright. Currently, there are approximately 400 ongoing gene-therapy clinical trials, and we expect to see new gene therapies gain regulatory approval in the years ahead. This is critically important for patients and patient communities who are waiting for therapeutic advances to treat unmet genetic diseases. In the Argus Universe of Coverage, the following companies are among those that are involved in this part of the Healthcare market. All of them carry an Argus BUY rating.

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.

The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where costs are lower. Yet the U.S. economy, even during the pandemic, has expanded to record levels. If U.S. corporations weren't innovating, the domestic economy would not be growing and capital would not be flooding into the country. Consider that U.S. GDP was approximately $1 trillion in 1930 but nearly $23 trillion at the end of 1H21. That's growth of 23-times. Meanwhile, the U.S. population has grown less than three-times during that time span, to 320 million from 120 million. The delta between GDP growth and population growth has been driven, in large part, by innovation. In addition, the value of listed corporations on U.S. stock exchanges at the end of 2020 was approximately $41 trillion, according to SIFMA, representing 38% of global equity market capitalization, while U.S. GDP represented only 26% of global GDP. The current low level of interest rates and the relatively high level of the dollar both attest to the confidence that global investors have in the innovative U.S. economy.

July ended with a bout of selling, but bulls considered it overdue profit-taking after another successful month. Even with Friday's washout, the S&P 500 rose 2.3% in July. That marked six straight months of appreciation for the blue chip index (only January has been negative in 2021) and was the best market month since April.

Consumers are now 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, should benefit from efforts to contain the coronavirus pandemic. The sector accounts for 13.0% of the S&P 500, and includes companies in the pharmaceuticals, medical devices, healthcare services, and insurance industries. The sector is underperforming the market thus far in 2021, with a gain of 12.9%. We think the sector should account for 15-17% of diversified portfolios. Here is how we use our analysts' Financial Services sector ideas in our Focus List and Model Portfolios. All stocks are rated BUY at Argus.

Stocks rose on Friday morning, led by the Technology sector, as another disappointing jobs report diminished concerns about an overheating economy and the potential for a near-term reduction in the Fed's bond buying program. The Labor Department said that the U.S. added 559,000 payroll jobs in May, up from 278,000 in April but below the Reuters consensus forecast of 650,000. The official unemployment rate fell to 5.8% from 6.1% in April. The Dow rose 0.3%, the S&P 0.6%, and the Nasdaq 1.4%. Crude oil traded near $69 per barrel, while gold rose $22 to $1895 per ounce.

This edition features where to look for infrastructure opportunities; the upcoming Berkshire meeting; an earnings roundup; and notes from Sage Group, Caterpillar, and General Dynamics.

The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles, to a large degree - have moved overseas, where costs are lower. Yet the U.S. economy, prior to the pandemic, had expanded to record levels. And now, the U.S. Healthcare industry is mobilizing to improve COVID-19 testing, treatments and vaccines. Consider that U.S. GDP was approximately $1 trillion in 1930 but nearly $22 trillion at the end of 2019. That's growth of 22-times. Meanwhile, the U.S. population has grown less than 3-times during that time span, to 320 million from 120 million. The delta between GDP growth and population growth has been driven in large part by innovation. In addition, the value of listed corporations on U.S. stock exchanges at the end of 2020 was approximately $32 trillion, representing 41% of global equity market capitalization, while U.S. GDP represented only 25% of global GDP. The current low level of interest rates (the benchmark 10-year Treasury bond yield is 1.1%) and the relatively high level of the dollar both attest to the confidence that global investors have in the innovative U.S. economy.

Stocks were mixed on Thursday morning as investors weighed new employment data and awaited comments from Fed Chair Jerome Powell at a Wall Street Journal conference. Mr. Powell is expected to address inflation concerns and rising bond yields, which have rattled equity markets over the last two weeks. The Labor Department said that first-time claims for state unemployment benefits rose to 745,000 for the week ended February 27, up from 736,000 a week earlier but slightly below the Bloomberg consensus forecast of 750,000. The Dow rose 0.3%, the S&P rose 0.3%, and the Nasdaq fell 0.1%. Crude oil rose $3 to $64 per barrel, while gold traded near $1716 per ounce.

The 3Q20 EPS season is mostly in the record books, with retailers the last group to report. The results were not pretty, but were better than 2Q20. Through mid-November, Refinitiv reported that S&P 500 earnings declined in 3Q at a 7.4% rate -- a vast improvement from the prior quarter's 30.5% decline. Excluding the Energy sector, earnings declined at a 3.2% rate. Of the 462 companies in the S&P 500 that have reported earnings to date for 20Q3, 84% have reported earnings above analyst expectations. This compares to a long-term average of 65% and prior four-quarter average of 73%. Our analysts are always looking for companies that raise their outlooks during earnings season. Management's ability to "raise guidance" can often be a catalyst to strong returns in the quarters ahead. There were not many in this most-recent period. Here are 12 BUY-rated companies in Argus Coverage for which management has raised guidance or increased its outlook during the recent EPS reporting season.

COVID-19 and Election Uncertainty: Our Monthly Survey of the Economy, Interest Rates, and Markets

Often overlooked amid the market's gyrations, dividend income is an important element of total return. Consider recent results: in 2015, the S&P 500 delivered a total return of 1.4%, including dividends -- but excluding dividends, the market was down 0.7%. Capital gains were a bit easier to achieve in 2016-17, though we note that dividend payments still contributed about 15%-20% of total return for investors. And dividend payments softened the blow in 2018, when most market indices declined as the Federal Reserve hiked rates. Between 1930 and 2012, dividend income accounted for 42% of total return of the S&P 500, according to Morgan Stanley. Not all dividends are created equal, though, and it is important to understand the difference between high-yield stocks and dividend-growth stocks, particularly in a slow-growth or recessionary economic environment.

Often overlooked amid the market's gyrations, dividend income is an important element of total return. Consider recent results: in 2015, the S&P 500 delivered a total return of 1.4%, including dividends -- but excluding dividends, the market was down 0.7%. Capital gains were a bit easier to achieve in 2016-17, though we note that dividend payments still contributed about 15%-20% of total return for investors. And dividend payments softened the blow in 2018, when most market indices declined as the Federal Reserve hiked rates. Between 1930 and 2012, dividend income accounted for 42% of total return of the S&P 500, according to Morgan Stanley. Not all dividends are created equal, though, and it is important to understand the difference between high-yield stocks and dividend-growth stocks, particularly in a slow-growth or recessionary economic environment.

The 2Q20 EPS season is in the record books, and the results were not pretty. Through late August, Refinitiv reported that S&P 500 earnings declined at a 30.5% rate. The Industrial and Energy groups were the weakest performers, while the defensive Utilities and Healthcare sectors were the strongest, up in the mid-single digits. The Tech sector's earnings increased 3%. Our analysts are always on the lookout for companies that raise their outlooks during earnings season. Management's ability to "raise guidance" can often be a catalyst to strong returns in the quarters ahead. There were not many in this most-recent period. Here are 12 BUY-rated companies in Argus Coverage for which management has raised guidance or increased its outlook during the recent EPS reporting season.

The 2Q20 EPS season is in the record books, and the results were not pretty. Through late August, Refinitiv reported that S&P 500 earnings declined at a 30.5% rate. The Industrial and Energy groups were the weakest performers, while the defensive Utilities and Healthcare sectors were the strongest, up in the mid-single digits. The Tech sector's earnings increased 3%. Our analysts are always on the lookout for companies that raise their outlooks during earnings season. Management's ability to "raise guidance" can often be a catalyst to strong returns in the quarters ahead. There were not many in this most-recent period. Here are 12 BUY-rated companies in Argus Coverage for which management has raised guidance or increased its outlook during the recent EPS reporting season.

Stocks fell on Friday, capping off a week that saw all major indexes move moderately lower. Stocks recorded their first weekly decline after four weeks of gains. Blue chips performed better then growth stocks for the second straight week. Investors paid close attention to Capitol Hill, where Congress failed to move a second stimulus program out of committee. The week featured mixed economic readings, with housing showing signs of strength and jobless claims showing weakness. On Friday, the Dow Jones Industrial Average fell 182 points, or 0.7%. The S&P 500 fell 0.6% and the Nasdaq Composite fell 0.9%. For the full week, the Dow decreased 0.8%. The S&P 500 was down 0.3%, and the Nasdaq fell 1.3%. For the year-to-date, losses are now 7.3% for the Dow and 0.5% for the S&P 500, while the Nasdaq is up 15.5%. Over the past 52 weeks, the Dow is down 2.7%, while the S&P 500 is up 6.3%, and the Nasdaq is up 24.4%.

Innovation may be hard to define but, to borrow from former U.S. Supreme Court Justice Potter Stewart, you know it when you see it. The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles, to a large degree - have moved overseas, where costs are lower. Yet the U.S. economy, prior to the pandemic, had expanded to record levels. And now the U.S. Healthcare industry is mobilizing to improve COVID-19 testing, treatments and, ultimately, a vaccine. If U.S. corporations weren't innovating, creating new products and services and moving into new markets and applications, the domestic economy would not have recently completed a 10-year expansion phase before the coronavirus hit, and capital would not be flooding into the country. A couple of statistics should help illustrate our point. Consider that U.S. GDP was approximately $1 trillion in 1930 but nearly $22 trillion in 2019. That's growth of 22-times. Meanwhile, the U.S. population has grown less than 3-times during that time span, to 320 million from 120 million. The delta between GDP growth and population growth has been driven in large part by innovation. In addition, the value of listed corporations on U.S. stock exchanges at the end of 2018 was approximately $32 trillion, representing 41% of global equity market capitalization, while U.S. GDP represented only 25% of global GDP.