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.

We've seen growing evidence of rotation away from mega-cap tech. Indeed, even a textbook 'impressive' beat can lead to a 'sell the news' reaction for these stocks. Betting on more near-term upside from these stocks, no matter what they report, is a tough technical game as they all have extreme 14-day and 14-week Relative Strength Index (RSI) readings in the high 70s to mid-80s.

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 Dell Technologies Inc (DELL); Autozone Inc. (AZO); Pinterest Inc (PINS); Oshkosh Corp (OSK) and the Focus List deletions are MongoDB Inc (MDB); Old Dominion Freight Line, Inc (ODFL); Tesla Inc (TSLA); Twilio Inc (TWLO).

With earnings season nearing an end, insider sentiment remains generally positive -- which is good news in light of the solid move higher in share prices over the past two weeks. After two weeks of bullish signals that were based on light transaction volume, this week brings 'more typical' insider-sentiment indicators that are built on an increasing number of insider transactions. The one-week sentiment data from Vickers Stock Research has softened, but remains strong enough to keep the eight-week data solidly neutral. The weak link, though not seriously so, is sentiment from insiders on the tech-heavy Nasdaq. With tech stocks outperforming over the past few weeks and for the year-to-date, that's not a huge surprise.

In theory, investors can breathe easier heading into the fourth quarter, when markets typically post the strongest returns of the year. To draw this conclusion, we analyzed data collected on S&P 500 performance from 1980-2022. By our calculations, the quarter has generated average gains of 4.6%, compared to gains of 2.1%, 2.9%, and 0.3% for 1Q, 2Q and 3Q, respectively. The fourth quarter is consistent as well, with a "win percentage" of 81%. This means that stock returns are positive in the fourth quarter in four years out of five, and compares to winning percentages of 66% in 1Q, 66% in 2Q, and 61% in 3Q. To be sure, the fourth quarter has had its share of clunkers. In 1987, which included Black Friday, stocks fell 23% during the period; in 2008, stocks sold off 18%, after the collapse of Lehman Brothers and as the U.S. economy plunged into a deep recession. As recently as 2018, stocks slid 14% in the final quarter, when trade wars intensified and the Federal Reserve raised rates. But last year, when stocks were in a bear market, 4Q was the only quarter of the year with a positive performance (up 7%). This time around, it is not unreasonable to expect a slow start, given the government shutdown, labor strikes at automakers, oil prices above $90 per barrel, and high interest rates. In the current environment, we continue to recommend that clients focus on quality companies with clean balance sheets and experienced management teams.

In theory, investors can breathe easier heading into the fourth quarter, when markets typically post the strongest returns of the year. To draw this conclusion, we analyzed data collected on S&P 500 performance from 1980-2022. By our calculations, the quarter has generated average gains of 4.6%, compared to gains of 2.1%, 2.9%, and 0.3% for 1Q, 2Q and 3Q, respectively. The fourth quarter is consistent as well, with a "win percentage" of 81%. This means that stock returns are positive in the fourth quarter in four years out of five, and compares to winning percentages of 66% in 1Q, 66% in 2Q, and 61% in 3Q. To be sure, the fourth quarter has had its share of clunkers. In 1987, which included Black Friday, stocks fell 23% during the period; in 2008, stocks sold off 18%, after the collapse of Lehman Brothers and as the U.S. economy plunged into a deep recession. As recently as 2018, stocks slid 14% in the final quarter, when trade wars intensified and the Federal Reserve raised rates. But last year, when stocks were in a bear market, 4Q was the only quarter of the year with a positive performance (up 7%). This time around, it is not unreasonable to expect a slow start, given the government shutdown, labor strikes at automakers, oil prices above $90 per barrel, and high interest rates. In the current environment, we continue to recommend that clients focus on quality companies with clean balance sheets and experienced management teams.

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.

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 approximately 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 top-level inflation rate was higher on a year-over-year basis last month in the U.S., but most prices still appear to be stabilizing or cooling. The rate of core inflation continued to tick lower. The CPI numbers generally were in line with consensus expectations and Argus forecasts. The Bureau of Labor Statistics reported a 3.7% increase in overall inflation year-over-year through August, compared to a 3.2% rate through July and a 9.1% rate back in June 2022. The core rate, excluding the impact of food and energy prices, declined slightly to 4.3% in August versus 4.7% in the prior month. Month-over-month, the All-Items CPI increased 60 basis points, driven by higher gasoline prices; the Core CPI increased a lesser 30 bps. Segments of the economy with stable/easing prices year-over-year included Gasoline (-3.3%, despite the August surge), Used Cars & Trucks (-6.6%), and Medical Care Services (-2.1%). Inflation rates continue to be propped up by Transportation Services (10.3% year-over-year) and Shelter (7.3%), which tend to have stickier prices that are less likely to fall sharply. We continue to think that the June 2022 CPI rate was the peak for the index this cycle, as the housing market cools, supplies of new vehicles are replenished, and the price of oil stays below $90 per barrel. The Fed has lifted the feds fund rate from 0.0% to above 5.25% over the past 18 months, and the rate hikes appear to be reducing inflationary pressures. The next question is whether the rapid rate of increases will tip the economy into a recession as inflation continues to head toward 2.0%.

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 Catalent Inc. (CTLT); Splunk Inc (SPLK); Twilio Inc (TWLO); CIENA Corp. (CIEN) and the Focus List deletions are Biogen Inc (BIIB); Arista Networks Inc (ANET); Netflix Inc (NFLX); Shopify Inc (SHOP).

Stocks finished near breakeven on Thursday after giving up most of their early gains, as investors weighed new inflation and employment data. The core consumer price index, excluding food and energy prices, rose 4.7% from the prior year in July, down from 4.8% in June. The reading was the lowest since October 2021 and raised the likelihood that the Fed would hold interest rates steady at its September meeting. However, San Francisco Fed President Mary Daly said that the CPI data, though positive, showed that the Fed still had 'more work to do' in bringing down inflation. On the employment front, first-time claims for state unemployment benefits rose by 21,000 to a seasonally adjusted 248,000 for the week ended August 5, above the Reuters consensus forecast of 230,000. Continuing claims fell by 8,000 to 1.684 million. The Dow rose 0.15%, the S&P 0.03%, and the Nasdaq 0.12%. Crude oil fell nearly 2% to $83 per barrel, while gold fell $5 to $1946 per ounce.

Stocks finished mostly lower on Thursday amid more signs of weakness at regional banks, continued debt ceiling concerns, and new inflation and employment data. The Labor Department's producer price index showed progress against inflation, as prices rose at a slower annual rate in April. First-time claims for state unemployment benefits also rose from the prior week, pointing to a tighter labor market. On the earnings front, Disney shares dropped nearly 9% after the company reported disappointing earnings and a decline in Disney+ subscribers. The Dow fell 0.66%, the S&P fell 0.17%, and the Nasdaq rose 0.18%. Crude oil traded near $71.50 per barrel, while gold fell $17 to $2021 per ounce.

The Vickers Top Buyers & Sellers is a daily report that identifies the five companies the largest insider purchase transactions based on the dollar value of the transactions as well as the five companies the largest insider sales transactions based on the dollar value of the transactions.

Stocks fell sharply on Thursday as investors weighed new inflation, employment, and housing market data. Producer prices rose more than expected, raising concerns about continued aggressive rate hikes, while weak housing starts and building permits showed the impact of high mortgage rates. Meanwhile, weekly unemployment claims pointed to a still strong labor market. The Labor Department said that first-time claims for state unemployment benefits fell by 1,000 to 194,000 for the week ended February 11, below the Reuters consensus forecast of 200,000. The Dow fell 1.26%, the S&P 1.38%, and the Nasdaq 1.78%. Crude oil traded near $78 per barrel, while gold rose $3 to $1848 per ounce.

Stocks slumped throughout 2022, as the S&P 500 entered a bear market in June and closed 19% lower for the year. Value stocks generally outperformed during the year, as the Dow Jones Industrial Average fell 9% while the Nasdaq Composite dropped 33%. The leading sectors were value-oriented, such as Energy, Utilities, Consumer Staples, and Financial Services. The average stock in the Argus Universe of Coverage declined 13% during the year, and the median stock declined 15%. The average BUY-rated stock dropped 11%, while the average HOLD-rated stock fell 17%. Will investors continue to favor value in 2023? Will high inflation drive continued outperformance in Energy?

Rally in October, Stumble on the Fed: Our Monthly Survey of the Economy, Interest Rates, and Stocks

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 S&P 500 ran into key resistance recently at the 4,175 region and, so far, the pause looks like it could be a bull flag. The index has come a long way, so we will give the bulls the benefit of the doubt in the short term. Of course, a break of the flag to the upside would bring the next piece of resistance into view at 4,225, which is a 50% retracement of the bear market.

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 have struggled in 2022, but corporate insiders have reacted with increasing optimism in recent weeks as stocks have plumbed new lows. Indeed, given the strength of current insider-sentiment readings from Vickers Stock Research, it seems clear that insiders are viewing the current dip as an opportunity.

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 Marriott International, Inc. (MAR); General Dynamics Corp. (GD); Sempra Energy (SRE); Omnicom Group, Inc. (OMC) and the Focus List deletions are American Electric Power Co Inc (AEP); Vontier Corp (VNT); Twilio Inc (TWLO); Hilton Worldwide Holdings Inc (HLT).

The stock market returned to its bearish ways last week, as the January CPI posted its highest annual increase in 40 years and the 10-year Treasury yield pushed up almost to 2%. On Friday, the Dow Jones Industrial Average dropped 504 points, or 1.43%. The S&P 500 fell 1.90%, and the Nasdaq Composite plunged 2.78%. For the week, the DJIA was down 351 points, or 1.00%, the S&P 500 was down 1.82%, and the Nasdaq Composite was off by 2.18%. Year-to-date, the Dow is down 4.40%; the S&P 500 is off 7.29%; and the Nasdaq Composite is back in correction territory, down 11.85%.

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.

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 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.

Pricing pressures are hot, primarily at the producer level. And, after months of below-target inflation readings, mainstream measures of inflation are rising as well, compared to the deflationary lows of the pandemic. Though Federal Reserve Chairman Powell has said that the central bank is willing to let inflation rise above its 2% target in exchange for a continued decline in unemployment, we don't think it will be too long before the Fed starts to pull back some of its support for the economy. We track 19 inflation measures on a monthly basis. On average, they are indicating that prices are rising at a 7.5% rate, below last month's reading, which was 7.7%, as some producer price gauges are cooling a bit. But drilling down to core inflation, our reading is 3.2%, with the all-important five-year target rate at 2.3%. The big increases in recent months have indeed come at the producer level, as the PPI for intermediate unprocessed goods, for example, is now 46% and the PPI for intermediate processed goods is 24%. Much of this price activity is driven by the recent recovery in commodity prices, including oil, which has more than tripled year-over year. The Federal Reserve's inflation forecasts now call for a core inflation reading of 4.2% in 2021 and 2.2% in 2022.

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 approximately 500 stocks. The Focus List typically includes 30 stocks: turnover is high, as Director of Research Kelleher typically adds three or four new stocks per month. Below are the latest additions, all of which are rated BUY at Argus.

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 DuPont de Nemours Inc (DD); Hilton Worldwide Holdings Inc (HLT); Twilio Inc (TWLO); Corning, Inc. (GLW) and the Focus List deletions are LyondellBasell Industries NV (LYB); American Electric Power Co Inc (AEP); International Business Machine (IBM); T-Mobile US Inc (TMUS); Restaurant Brands Intl In (QSR).

Stocks were mixed on Tuesday morning amid uncertainty about the economic impact of the Delta variant. Factory order data showed slower growth but still topped the consensus forecast. The Commerce Department said that U.S. factory orders rose 1.5% in June, above the Reuters consensus of 1.0% but down from 2.3% growth in May. The Dow rose 0.2%, the S&P fell 0.1%, and the Nasdaq fell 0.6%. Crude oil traded near $70 per barrel, while gold fell $8 to $1814 per ounce.

The Vickers Top Buyers & Sellers is a daily report that identifies the five companies the largest insider purchase transactions based on the dollar value of the transactions as well as the five companies the largest insider sales transactions based on the dollar value of the transactions.

Stocks finished higher on Thursday in a volatile session as investors weighed a new round of 1Q earnings reports along with weekly employment data. The Labor Department reported that first-time jobless claims fell to 498,000, the first drop below 500,000 in the pandemic era and below the consensus forecast. However, continuing claims rose to 3.69 million from 3.653 million and topped the consensus estimate. The data came ahead of the government's April employment report on Friday morning. The Reuters consensus calls for the addition of 978,000 new payroll jobs after an increase of 916,000 in March. The Dow rose 0.93%, the S&P 0.82%, and the Nasdaq 0.37%. Crude oil fell 1% to $65 per barrel, while gold rose $31 to $1815 per ounce.

Stocks fell on Thursday morning following mixed earnings from Walmart and disappointing employment data. The Labor Department said that first-time claims for state unemployment benefits rose to 861,000 for the week ended February 13, up from a revised 848,000 a week earlier and well above the Bloomberg consensus forecast of 773,000. Continuing claims of 4.494 million were down from the prior week but above the consensus forecast of 4.425 million. The Dow fell 0.6%, the S&P 0.7%, and the Nasdaq 1.1%. Crude oil fell slightly to $61 per barrel, while gold traded near $1776 per ounce.

This edition features an overvalued tech sector; the capitol riot; fast fashion; and notes from Intel, Veolia, and Aphria.

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.

Market enthusiasm continued into week-end, as indices rallied to or near all-time highs. Friday's continuation rally was disconnected from the news at hand. Nonfarm payrolls for November badly missed expectations, coming in with a gain of 245,000 new jobs -- about 200K less than consensus. As job growth slowed and stocks rose anyway, bulls deployed tortured logic that bad is good; i.e., the weak payrolls showing will compel Congress to deliver stimulus sooner than later.

For a third consecutive week, data from Vickers Stock Research paints a picture of corporate executives, directors and beneficial owners selling shares at a rate that is higher than expected. Also true is that the volume of insider transactions is low, in keeping with the ongoing corporate earnings season (which prevents most insiders from trading). While one might argue that the low volume offsets the higher-than-normal selling, we say 'not so fast.'

There are many ways we could describe 2020, depending on whether we're talking about the stock market, COVID-19, the economy, politics, sports, and just about anything else. For the stock market, we could label it "The Great Dichotomy" or maybe the "The Great Chasm."

There are many ways we could describe 2020, depending on whether we're talking about the stock market, COVID-19, the economy, politics, sports, and just about anything else. For the stock market, we could label it "The Great Dichotomy" or maybe the "The Great Chasm."

Stocks fizzled in September, while bond prices were steady: equities are now underperforming fixed-income instruments in 2020. From an asset allocation standpoint, our model is balanced equally between stocks and bonds for long-term investors. In other words, these asset classes should be at their normal weights in diversified portfolios. We continue to favor U.S. stocks over international stocks, growth stocks over value, and large-caps over small. Drilling deeper, we look for large-cap companies with strong balance sheets and experienced management teams to be the leaders during an eventual recovery. Our recommended exposure to small- and mid-caps is now 10% of equity allocation, below the benchmark weighting. Internationally, U.S. stocks have outperformed global stocks over the trailing one- and five-year periods. We expect this to continue over the long term, given volatile global economic and currency conditions. That said, international stocks offer favorable near-term valuations, and we target 15-18% of equity exposure to the group. In terms of growth and value, growth, led by Tech and Healthcare, continues to outperform value, driven by Energy and Materials.

Stocks fizzled in September, while bond prices were steady: equities are now underperforming fixed-income instruments in 2020. From an asset allocation standpoint, our model is balanced equally between stocks and bonds for long-term investors. In other words, these asset classes should be at their normal weights in diversified portfolios. We continue to favor U.S. stocks over international stocks, growth stocks over value, and large-caps over small. Drilling deeper, we look for large-cap companies with strong balance sheets and experienced management teams to be the leaders during an eventual recovery. Our recommended exposure to small- and mid-caps is now 10% of equity allocation, below the benchmark weighting. Internationally, U.S. stocks have outperformed global stocks over the trailing one- and five-year periods. We expect this to continue over the long term, given volatile global economic and currency conditions. That said, international stocks offer favorable near-term valuations, and we target 15-18% of equity exposure to the group. In terms of growth and value, growth, led by Tech and Healthcare, continues to outperform value, driven by Energy and Materials.

Stocks posted modest gains during the week, but gave back some gains on Friday. Riskier stocks performed slightly worse than blue chips, mainly due to a tech sell-off at the end of the week. On Friday, the Dow Jones Industrial Average fell 134 points, or 0.5%. The S&P 500 fell 1.0% and the Nasdaq Composite dropped 2.2%. For the full week, the Dow was up 1.9%, and the S&P 500 and the Nasdaq were both up 1.5%. Last week's gains snapped a four-week losing streak for the broader market. For the year-to-date, the DJIA is down 3.0%, the S&P is up 3.6%, and the Nasdaq is up 23.4%. Over the past 52 weeks, the Dow is up 4.2%, the S&P 500 is up 13.4%, and the Nasdaq is up 38.7%.