In this edition, Fair Isaac's upside fair; Initiating Coverage of GE Vernova; and US cable valuations have tumbled perhaps more than deserved; and Marvell Technology, Tilray Brands, and Yum China.

The stock market fell back a bit on Friday, with the impact most notable on the likes of the Nasdaq Composite index, semiconductor chipmakers, and recently high-flying stocks such as Nvidia. Time will tell if this is the beginning of a reset for stocks, but this one-day action aligns with recent insider-sentiment data from Vickers Stock Research. Indeed, for more than a month, that data has clearly suggested that corporate executives, directors, and beneficial owners as a group have become increasingly defensive while stocks pushed higher day after day after day. That is unchanged this week.

Stocks were mixed on Tuesday morning following new employment and service sector data. In its monthly JOLTS survey, the Labor Department said that job openings fell to 8.73 million on the last day of October, down from 9.35 million a month earlier and below the Reuters consensus forecast of 9.3 million. Services data was stronger than expected. The Institute for Supply Management said that its non-manufacturing PMI rose to 52.7 in November from 51.8 in October and also topped the consensus forecast of 52.0. CVS shares rose 4% after the company issued strong 2024 sales guidance and raised its dividend by 10%. The Dow fell 0.3%, the S&P rose 0.1%, and the Nasdaq rose 0.6%. Crude oil rose to $73.50 per barrel, while gold fell $12 to trade near $2031 per ounce.

Sustainable Impact Investing, or ESG investing, is gaining traction not only with Argus Research clients but also with the global investment community. BlackRock CEO Lawrence Fink, who oversees approximately $9 trillion in assets, announced in January 2020 that his firm would be investing in companies that are making progress on sustainability. He doubled down in his January 2021 letter, calling on company managements to disclose their plans for making their businesses "compatible with a net-zero economy" by 2050. As assets have flowed in over the past 40 years, Sustainable Impact Investing has evolved. The discipline, originally known as Socially Responsible Investing, focused at first on excluding companies that conducted business in South Africa, or participated in industries such as tobacco, alcohol, and firearms. Performance of these initial strategies lagged, and the approach has been modified. Now, instead of merely identifying industries to avoid, the discipline promotes "sustainable" business practices across all industries that can have an "impact" on global issues such as climate, hunger, poverty, disease, shelter, and workers' rights.

Sustainable Impact Investing, or ESG investing, is gaining traction not only with Argus Research clients but also with the global investment community. BlackRock CEO Lawrence Fink, who oversees approximately $9 trillion in assets, announced in January 2020 that his firm would be investing in companies that are making progress on sustainability. He doubled down in his January 2021 letter, calling on company managements to disclose their plans for making their businesses "compatible with a net-zero economy" by 2050. As assets have flowed in over the past 40 years, Sustainable Impact Investing has evolved. The discipline, originally known as Socially Responsible Investing, focused at first on excluding companies that conducted business in South Africa, or participated in industries such as tobacco, alcohol, and firearms. Performance of these initial strategies lagged, and the approach has been modified. Now, instead of merely identifying industries to avoid, the discipline promotes "sustainable" business practices across all industries that can have an "impact" on global issues such as climate, hunger, poverty, disease, shelter, and workers' rights.

When we expand our view from daily charts to monthly charts, price action looks almost too simplistic. There are long-term bull markets, intermediate- to long-term corrections and bear markets, and periods of sideways action. We see what we call 'market platforms' during corrections/bear markets; market tops, which we call ceilings; violent bottoms and tops with very little price structure, known as 'V' bottoms (which generally are very bullish, but hard to recognize); and parabolic tops, which generally do not end well.

When we expand our view from daily charts to monthly charts, price action looks almost too simplistic. There are long-term bull markets, intermediate- to long-term corrections and bear markets, and periods of sideways action. We see what we call 'market platforms' during corrections/bear markets; market tops, which we call ceilings; violent bottoms and tops with very little price structure, known as 'V' bottoms (which generally are very bullish, but hard to recognize); and parabolic tops, which generally do not end well.

Stocks started a new bull market in 2Q23, as the S&P 500 climbed 20% above bear-market lows from last October. For the quarter, the index climbed about 8%. Performance was narrow in 2Q, led by last year's laggard sectors, including Communication Services, Consumer Discretionary, and Technology. Last year's top-performing sector, Energy, and the Utility sector, were the worst performers in 2Q23. The average stock in the diversified Argus Universe of Coverage rose 4% in the quarter, and the median stock advanced 2%. The average Argus BUY-rated stock rose 5.7%, while the average HOLD-rated stock gained 1.2%. We recently raised our sector rating on Consumer Discretionary to Over-Weight, as the employment environment is strong. We also look for a pick-up in EPS growth in Communication Services and Technology, and expect these groups to pace broad market performance. Below are the top 10 performers from the Argus Universe in 2Q23, many from Technology and Communication Services. After that, we list the bottom five performers.

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 rose on Friday morning amid signs that the White House and congressional Republicans were close to a debt ceiling deal. The deal would reportedly raise the debt ceiling for two years while capping nondefense discretionary spending at current-year levels. Meanwhile, the Commerce Department reported increases in both consumer spending and inflation. Consumer spending rose 0.8% in April, up from a revised 0.1% increase in March and above the Reuters consensus forecast of 0.4% growth. The personal consumption expenditures price index, the Fed's preferred measure of inflation, rose 4.4% on a year-over-year basis in April, up from 4.2% in March and above the consensus forecast of 4.3%. Excluding food and energy prices, the core PCE rose 4.7% from the prior year, up from a 4.6% rate in March and also slightly above consensus. The Dow rose 0.9%, the S&P 1.0%, and the Nasdaq 1.6%. Crude oil rose to $72.50 per barrel, while gold traded near $1941 per ounce.

One silver lining of a down market is that stocks become more affordable. During the very tough 2022 for almost all equities, the Technology sector was one of the hardest hit groups. Many Tech stocks, which are traditionally growth stocks, now offer both growth and value characteristics. When stock values pull back, especially far back, it usually is not a good time for investors to retreat. Rather, we advise that shareholders look for companies with strong managements, desirable products or services, and solid track records. For this week's list, we did exactly that in beaten-down Technology. We used the Argus Research Screening Tool and applied the following criteria: the stocks must be in the Technology sector; must be rated BUY at Argus; must carry an Argus Financial Strength rating of Medium-High or High; and must trade at least 30% below their 52-week high. Here are the top 10 results, suggesting attractive valuations.

In this edition, Ad Technology Firms Stand Firm, Headaches for CSL Behring Easing, Energy Crisis Creates Opportunity in German Chemical Stocks

Stocks extended their losses on Tuesday morning after a sharp selloff on Monday. The Commerce Department reported that the U.S. trade gap widened for a second month in October, reflecting the impact of the strong dollar and lower exports. The wider trade deficit is likely to weigh on 4Q GDP. On the earnings front, auto parts retailer AutoZone fell more than 4%, despite better-than-expected fiscal 1Q results, amid concerns about rising inventory and potentially weaker earnings in 2Q. The Dow fell 0.4%, the S&P 0.9%, and the Nasdaq 1.5%. Crude oil fell more than 1% to $75.50 per barrel, while gold traded near $1784 per ounce.

After a huge improvement from mid-July until mid-August, breadth has deteriorated in the second half of August. We saw plenty of breadth thrusts off the June low, so this can be quite common. As we said recently, if the initial rally since mid-June was wave one of a new bull market, wave twos can be nasty. What this does is reset sentiment before the typically much-calmer and more-consistent wave three starts.

Stocks were higher on Friday morning. The headline PCE figure showed inflation rose less than expected in April, while the core figure met expectations for a 0.3% rise. Meanwhile, personal spending rose more than expected in April at a pace of 0.9%. On the earnings front, Marvell Technology Inc. (MRVL) is up 4.7% after the semiconductor company edged out earnings and revenue estimates while offering in line earnings and revenue guidance for the second quarter. The Dow rose 1.1%, the S&P 1.9%, and the Nasdaq 2.7%. Crude oil rose slightly to $114 per barrel, while gold traded near $1858 per ounce.

The Russian invasion of Ukraine, and specifically fire at a nuclear plant, extended the stock market's losing streak last week. On Friday, the Dow Jones Industrial Average fell by 180 points, or 0.53%. The S&P 500 fell 0.79%, and the Nasdaq Composite dropped 1.66%. For the week, the DJIA was down 444 points, or 1.3%, while the S&P 500 was off 1.27%, and the Nasdaq Composite declined 2.78%. Year-to-date, the Dow is down 7.49%; the S&P 500 is off 9.18%. The Nasdaq Composite extended its relative underperformance and is now down 14.90% year to date.

Explosive growth in mobile and fixed-line traffic is driving demand for robust data centers that are enabled for artificial intelligence (AI) and can manage rising and increasingly-complex traffic flow. Two-thirds of the world will have internet access by 2023, while the number of connected devices is expected to grow to three-times the global population. IoT (machine to machine or M2M) connections are expected to grow at a 30% CAGR. Security is a top need, as "denial of service" attacks are set to double by 2023. To handle the challenges of managing, storing, and securing data amid this explosive traffic growth, data centers will need to harness the power of artificial intelligence. AI enhances data center capabilities though the power of machine learning, inference, and deep learning, all in an application-accelerated environment. The AI data center also makes use of non-traditional and emerging technologies that provide more computing power than traditional CPU-based architectures. These include GPU Compute from NVidia and Tensor cores from Google/Alphabet. As of mid-year 2021, about 600 hyperscale data centers were in operation around the world, up from about 500 at year-end 2019 and double the number from five years ago. The bulk of data center construction is by hyperscale providers including AWS from Amazon.com, Microsoft Azure, Google Cloud from Alphabet, as well as with Chinese companies including Baidu and Alibaba. Co-location companies are another major data center driver, including Equinix and Digital Realty Trust. International Business Machines is providing hybrid cloud services that bridge public and private clouds. Other data center suppliers include semiconductor companies Broadcom, Marvell Technology, Intel, and Advanced Micro Devices. Stocks on the Argus Research BUY list that are in position to benefit include the following.

Friday wrapped up a difficult week for stocks, particularly for the Nasdaq, which shed an additional 2% after investors concluded that Nvidia's deal to buy ARM Holdings was dead in the water. With a close at 15,085, the Nasdaq is now 6.1% below its all-time high. This growth-oriented index is also below both its 20-day and 50-day simple moving-average support lines; the 50-day is 250 points above Friday's close.

The stock market moved lower last week as Omicron concerns caused volatility to spike to its highest levels since January 2021. Blue chips outperformed tech stocks, as investors went into a risk-off mode. During Friday's session, the Dow Jones Industrial Average fell 60 points, or 0.17%. The S&P 500 was down 0.84%, and the Nasdaq Composite was down 1.92%. For the week, the DJIA was down 319 points, or 0.91%, the S&P 500 was down 1.22%, and the Nasdaq Composite was down 2.62%. Year-to-date, the DJIA is up 12.98%, the S&P 500 is up 20.83%, and the Nasdaq Composite is up 17.05%.

The market ain't afraida' no ghosts, and stocks sailed into Halloween weekend flying high on a witch's broom. The S&P 500, assigned to Dracula's coffin in September, rose up to reach an all-time intra-day high at 4,608 on Friday before finishing the session an all-time closing high of 4,605.

Stocks rose modestly on Monday morning, led by the Materials and Energy sectors. Investors awaited the first 3Q earnings reports from major banks later in the week amid continued concerns about inflation and slowing growth. Analysts currently expect S&P 500 companies to post an average 29.6% year-over-year increase in 3Q earnings, according to IBES data from Refinitiv - down from more than 96% in 2Q. The Dow rose 0.6%, the S&P 0.5%, and the Nasdaq 0.6%. Crude oil rose 2.5% to more than $81 per barrel, while gold traded near $1759 per ounce.

The Technology sector started slowly in 2021 as investors focused on value stocks. But the sector has come on strong in recent months (up 22% year-to-date) and now is outperforming the market (up 20.7%) as well as value sectors such as Consumer Staples (+8%), Utilities (+10%), Materials (+17%), and Industrials (+18%). The sector is the largest in the U.S. market and now accounts for more than 28% of the S&P 500. Over the long term, we expect the sector to benefit from pervasive digitization across the economy, greater acceptance of transformative technologies, and the development of the Internet of Things (IoT). Healthy company and sector fundamentals are also positive. For individual companies, these include high cash levels, low debt, and broad international business exposure. We have an Over-Weight ranking on the Tech sector and think investors should look to allocate up to 30% of their diversified portfolios to the group. Here is how we use our analysts' Tech sector ideas in our Focus List and Model Portfolios.

The stock market moved higher last week, with Tech stocks outperforming blue chips by a sizeable margin. During Friday's session, the Dow Jones Industrial Average increased 243 points, or 0.69%. The S&P 500 was up 0.88%, and the Nasdaq Composite was up 1.23%. For the week, the DJIA was up 336 points, or 0.96%, the S&P 500 was up 1.52%, and the Nasdaq Composite was up 2.82%. Year-to-date, the DJIA is up 15.84%, the S&P 500 is up 20.06%, and the Nasdaq Composite is up 17.39%.

Last week was all about jobs, as the market overcame its growing inflation concerns to rally on three employment data points clustered at the end of the week. The ADP private payrolls report (moved to Thursday by the holiday) ripped higher by 978,000 for May, well above the 650K consensus and up from 742K for April.

Marvell Technology designs integrated circuits primarily for data storage, networking, and communications. Historically, the firm focused on storage, where it is still a key supplier to hard-disk drive and solid-state drive makers but has strategically emphasized networking to offset declining HDD technology. The firm has since diversified via acquisitions and supplies chips to the networking and consumer electronic spaces. Marvell outsources its production to third-party foundries.

Each week in this space, we review and comment on the latest weekly insider-trading data from Vickers Stock Research. Among other things, we discuss developing trends, changes in trends, outlier data points, and how the trading activity among corporate executives, directors and beneficial owners compares to movements in broad market indices. Rarely are we left with just a 'huh' when we look over the data. But this week is one of those weeks.

Stocks continued to struggle on Friday, extending their losing streak to a third week. The S&P 500 also posted three straight losing weeks in September 2019.

The S&P 500 wrapped up its best August since 1986, when the index gained 7.1%. Investors everywhere are touting 1986's epic performance; fewer have mentioned that in September 1986, the index slumped 8.5%.

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 Kroger Co. (KR); Palo Alto Networks Inc (PANW); Snap Inc (SNAP); Incyte Corp. (INCY) and the Focus List deletions are Colgate-Palmolive Co. (CL); Emergent BioSolutions Inc (EBS); Marvell Technology Group Ltd (MRVL); Splunk Inc (SPLK).

Stocks strengthened into the close on Friday, with riskier assets outperforming blue chips. Across the U.S., states are moving along the time curve towards reopening, providing a boost to investor confidence. The Dow Jones Industrial Average was fractionally lower Friday, while the Nasdaq Composite advanced 1.3% and the S&P 500 added 0.5%. For the full week, the Dow added more than 900 points and rose 3.8%. The S&P 500 rose 3.0%, and the Nasdaq was up 1.8%. Year-to-date losses are now 11.1% for the Dow, while the Nasdaq is up 5.8%. Over the past 52 weeks all three indexes are positive. The Dow is up 2.3%, the S&P 500 is up 10.6%, and the Nasdaq is up 27%. However, a year ago, the market was weak in May 2019 making for an easy current comparison. Comps get harder from here against a strong 2H19 for equities.

The Technology sector has led the market recovery from the COVID-19 depths of late March. Through April 30, the sector was flat for the year, compared to a 10% decline for the S&P 500. The sector is the largest in the U.S. market and now accounts for almost 26% of the S&P 500. Over the long term, we expect the Tech sector to benefit from pervasive digitization across the economy, greater acceptance of transformative technologies, and the development of the Internet of Things (IoT). Healthy company and sector fundamentals are also positive. For individual companies, these include high cash levels, low debt, and broad international business exposure. We have an Over-Weight rating on the Tech sector and think investors should look to allocate up to 30% of their diversified portfolios to the group. Here is how we use our analysts' Tech sector ideas in our Focus List and Model Portfolios.

We have identified the next resistance level for the S&P 500 within this recovery leg is the 50% Fibonacci retracement, right around the 2,793 level. Stocks closed on 4/8/20 (prior to the Good Friday holiday) at 2,790, just under resistance.