Despite April Stumble, Positive Stock-Market Outlook for 2024

At midday, U.S. stocks are treading water as investors seemingly await big earnings news that is due out after the close, with Microsft and Alphabet both reporting. Also keeping a lid on trading is pending news from the Federal Reserve that will come on Wednesday afternoon, though it is deemed almost a certainty that interst rates will not be changed. In intraday news, GM shares are solidly higher after the company easily beat expectatiosn for both sales and revenue. As of this writing, the S&P 500 is essentially unchanged, the Dow is slightly higher, and the Nasdaq and Rusell 2000 are both slightly lower. Crude oil and gold are both up, at about 1.2% and 0.35%, respectively.

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.

Rapidly rising inflation in 2022 knocked stocks into a bear market. While growth strategies suffered the most, value strategies also declined. Even bond prices were lower last year. Stocks have recovered thus far in 2023, but gains have been largely driven by only a handful of high-tech companies. Inflation remains high and the Fed continues to raise rates. Is a recession in the offing? With all the uncertainty, is it time for investors to cash in their chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes, such as fixed income and cash. Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate. Academic literature and, more to the point, returns history, indicate that Min Vol can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods.

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.

Monday Tee Up: Here Comes Big Tech

As of the close on Friday, August 18, the major indices had fallen in three consecutive weeks for the first time since December 2022, when they all fell four weeks in a row. The Nasdaq fell to its key 21-week exponential average (EMA) on that Friday and bounced, while the S&P 500 was within 10 points of its 21-week EMA before bouncing. The Nasdaq 100 (QQQ) got within four points of the average and popped. Rebounds on Friday did nothing to erase the short-term downtrends, as the 10- and 21-day EMAs for the indices are above declining price and the indices all undercut their 50-day.

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.

Rapidly rising inflation in 2022 knocked stocks into a bear market. While growth strategies suffered the most, value strategies also declined. Even bond prices were lower last year. Stocks have recovered thus far in 2023, but gains have been largely driven by only a handful of high-tech companies. Inflation remains high and the Fed continues to raise rates. Is a recession in the offing? With all the uncertainty, is it time for investors to cash in their chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes, such as fixed income and cash. Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate. Academic literature and, more to the point, returns history, indicate that Min Vol can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods.

In this edition, market makes missteps around Google's search; ResMed revs up; industry landscape on consumer packaged goods; and Canfor, LPL Financial, and Boeing.

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.

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.

The U.S. economy generated 236,000 new jobs in March, in line with consensus expectations and above our forecast of 195,000. The unemployment rate dropped to 3.5% from 3.6% in February, remaining near January's 54-year low of 3.4%. The report suggests the economy is still too strong for the Fed to pause its rate-hike campaign. Average hourly earnings increased nine cents month-to-month and are now 4.4% higher year-over-year -- but an increase in the labor participation rate may limit wage increases. In March, job gains occurred in leisure and hospitality, government, professional and business services, and healthcare. Industries absent from the outsize-jobs-gains include mining, quarrying, oil and gas extraction, construction, manufacturing, wholesale trade, and financial activities. February's job gains were revised higher to 326,000 from 311,000, suggesting the consumer segment of the economy may grow for a few more months, despite the impact of interest-rate hikes and the failure of Silicon Valley Bank. The number of job openings in February decreased by 632,000 according a separate report, but it is hard to imagine the Fed easing with 9.9 million openings for 5.8 million unemployed. After the jobs report, stocks futures moved higher, the yield on the 10-year Treasury rose slightly, and the three-month T-Bill yield was up -- suggesting a greater probability of tightening. Futures on the fed funds rate suggested that expectations for a 25-basis-point rate hike in May have risen to 68% from 22% a month earlier.

Stocks were mostly lower on Wednesday morning following new employment and service sector data. Payroll provider ADP said that U.S. companies added 145,000 jobs in March, down from a revised 261,000 in February and below the Reuters consensus of 200,000. Services data was weaker than expected. The Institute for Supply Management said that its nonmanufacturing PMI fell to 51.2 in March, down from 55.1 in February and below the consensus forecast of 54.5. The Dow was flat, the S&P fell 0.6%, and the Nasdaq fell 1.4%. Crude oil traded near $80 per barrel, while gold fell $6 to $2033 per ounce.

Rapidly rising inflation 2022 knocked stocks into a bear market. While growth strategies suffered the most, value strategies also declined. Even bond prices were lower last year. Volatility, which has dropped from the highs of 2020, still has not returned to pre-COVID levels. Is it time for investors to cash in their chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes, such as fixed income and cash. As well, those fixed-income returns are from eras when the 10-year Treasury bond yield was much higher than the current 3.5% level. So what's a potential equity strategy for investors amid all the uncertainty? Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate.

We anticipate that activity in the consumer sector, which was the primary driver of GDP growth in 2022, will slow as the Federal Reserve continues to raise interest rates and companies keep cutting jobs. The sector is all-important to the economy and accounts for about two-thirds of GDP. The main driver to the consumer sector is the jobs market. While the domestic employment environment is in better shape than it was two years ago, it is starting to show signs of deterioration. Though the unemployment rate is 3.5%, it seems headed inevitably higher in the wake of layoff announcements from high-profile companies such as Microsoft, Alphabet, Amazon.com, Salesforce.com, Goldman Sachs, and Morgan Stanley. Meanwhile, consumer balance sheets appear to be weakening somewhat after multiple quarters of spending growth. A combination of pandemic-related factors -- such as economic shutdowns and aggressive fiscal spending -- resulted in a sharp improvement in household finances in 2020. Indeed, the stimulus program initially lifted personal savings to almost $5 trillion. But that money has been spent, and then some: the personal savings level has come down to $625 billion, below the $1 trillion average level in the decade prior to the pandemic. With savings tapped, a slowdown in the all-important consumer sector seems likely in 1H23. Here are some of our top "cautious consumer" stocks for 2023.

Stocks rose on Thursday morning following more 3Q earnings reports. AT&T shares jumped 9% after the company posted better-than-expected 3Q results, including strong growth in new subscribers, and raised its full-year earnings guidance. IBM also rose strongly after reporting above-consensus results, despite pressure from unfavorable exchange rates, and raising its 2022 sales forecast. The Dow rose 0.9%, the S&P 0.7%, and the Nasdaq 1.1%. Crude oil traded near $88 per barrel, while gold rose $12 to $1646 per ounce.

Recession Fears Grow: Our Monthly Survey of the Economy, Interest Rates, and Stocks

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 AstraZeneca PLC (AZN); Restaurant Brands Intl In (QSR); Hormel Foods Corp. (HRL); Huntington Bancshares, Inc. (HBAN) and the Focus List deletions are Apollo Global Management Inc (APO); Vertex Pharmaceuticals, Inc. (VRTX); Procter & Gamble Co. (PG); Marriott International, Inc. (MAR).

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.

Stocks were mixed on Monday morning after recovering from early losses. Manufacturing data was slightly better than expected. The Institute for Supply Management said that its national factory index slipped to 52.8 in July, down from 53.0 in June but above the Reuters consensus forecast of 52.0. The Dow and the S&P were flat, while the Nasdaq rose 0.5%. Crude oil fell more than 4% to $94 per barrel, while gold fell slightly to $1782 per ounce.

Rapidly rising inflation in 2022 has knocked the stock market into a bear market. While growth strategies have suffered the most, value strategies also have declined. Even year-to-date bond prices are lower. Volatility, which has dropped from the highs of 2020, still has not returned to pre-COVID levels. Is it time for investors to cash in their chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes, such as fixed income and cash. As well, those returns are from eras when the 10-year Treasury bond yield was much higher than the current 3.0% level. So what's a potential equity strategy for investors amid all the uncertainty? Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate. Academic literature and, more to the point, returns history, indicate that Min Vol can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods.

In this edition, Global Beauty Looking Good, Paypal Looks Promising, Utilities Facing Challenges, and Hasbro, Ipsen, and Toast ties up with Sling.

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.

Dividend income, an important element of total return, is often overlooked amid gyrations in the stock market. Between 1930 and 2012, dividend income accounted for 42% of the 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. The pattern is being repeated in 2022 as well. 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.

Monday Tee-Up: GDP Plus Inflation

This is among our most important themes for 2022, and stretches across industries. We think companies that consistently raise their dividends at a double-digit rate are sending off three important signals amid the recent market volatility: 1) the company's balance sheet is strong enough to pay a dividend; 2) management is focused on providing shareholder returns; and 3) management is confident enough in the near-term outlook to raise the payout aggressively. The third factor is especially important as the pandemic upended the nation's recent record of long-term economic growth. Here are 19 stocks that meet our double-digit dividend test and are on the Argus BUY List. They are also holdings in our Dividend Growth Separately Managed Account and in the Dividend Growers Total Return Trust, sponsored by SmartTrust.

Markets have faced difficult times before, with challenging economic environments, wars, disease, banking and housing crises, and inflation much worse than we are seeing now, to name but a few. Of late, stock investors had it very good for a very long time -- but now, finding opportunities requires much more work. There is no secret sauce, but there are principals that are worth reviewing: 1) diversify; 2) look for strong management; 3) look for solid balance sheets; 4) do your homework; and 5) adapt. To assemble this week's list, we looked across several sectors that historically are considered to be the most-shielded from high inflation and high interest rates. We then cross-referenced our coverage universe for companies where our analysts recently raised target prices; that have an Argus Financial Strength rating of at least Medium-High; and that pay dividends of least 3%. Some companies also are featured in our model portfolios (Growth & Income, Equity Income, Growth, and Institutional). Here is our list of companies we believe to be recession-proof, all of which 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 Thursday morning after giving up strong early gains. Tesla shares rose more than 6% after the carmaker posted better-than-expected 1Q sales and earnings, helped by price increases that more than offset the impact of higher costs. American Airlines shares also rose strongly after the company posted a narrower-than-expected 1Q loss and forecast a return to profitability in the second quarter. The Dow rose 0.3%, the S&P rose 0.2%, and the Nasdaq fell 0.1%. Crude oil rose more than 1% to $103.50 per barrel, while gold fell $14 to $1942 per ounce.

Stocks rose again on Wednesday morning ahead of the Fed's afternoon policy statement and subsequent commentary from Fed Chair Jerome Powell. Investors will be watching closely for more detail about the pace and timing of future interest rate hikes. Stocks also benefited from signs of progress in the peace talks between Ukraine and Russia. The Dow rose 1.1%, the S&P 1.6%, and the Nasdaq 2.7%. Crude oil traded near $96 per barrel, while gold fell $21 to $1909 per ounce.

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 4Q21. We review the 13Fs of the major activist investors, including Carl Icahn, Trian Fund Management, Jana Partners, and ValueAct Holdings, among others. 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.

Pricing pressures are hot and the Federal Reserve is getting ready to react. We track 20 inflation measures on a monthly basis. On average, they are indicating that prices are rising at a rate of 7.4%, ahead of last month's reading, which was 7.2%. Drilling down to core inflation -- which we obtain by averaging Core CPI, core GDP PCE, market-based PCE Ex-Food & Energy, the five-year forward inflation expectation rate, and the 10-year TIPs Break-even Interest Rate -- our reading is 3.8%. The all-important five-year target rate is at 2.0%. Recently, the Labor Department reported a 7.5% increase in overall inflation, driven by 27% higher energy prices, 40% higher used-car prices, 12% higher commodity prices, and 7% higher food prices. The only category that is below recent historical trends is Medical Care Services, which are up 2.7%. Stocks fell sharply after that news was reported. According to consumer surveys, expectations are for inflation to decline to the Fed's target of 2.0% over the next five years. The Federal Reserve's inflation forecasts now call for a core inflation reading of 4.4% in 2021 and back to 2.7% in 2022. If the central bank is correct, the inflation data will need to start declining soon.

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 Apollo Global Management Inc (APO); T-Mobile US Inc (TMUS); Procter & Gamble Co. (PG); Lam Research Corp. (LRCX) and the Focus List deletions are Corning, Inc. (GLW); Bank of New York Mellon Corp (BK); Monster Beverage Corp. (MNST); Netflix Inc (NFLX).

The S&P 500 recaptured its 200-day average earlier this week, but the index ran into multiple pieces of resistance on Wednesday just prior to Meta's face plant. The index had retraced 61.8% of its losses and hit its 50-day exponential average (EMA). Many times, EMAs work better than simple averages when providing support and resistance.

The onset of the coronavirus in 2020 knocked stocks into a bear market. Though equities recovered, the U.S. economy is about to slow down and COVID-19 cases are rising again as virus variants spread. Volatility, which has dropped from the highs of 2020, still has not returned to pre-COVID levels. Daily prices can swing wildly, as they did three times in 2021 when stocks dropped 4%-5% in a matter of a few days. Is it time for investors to cash in their chips? We note that investors exit the stock market at their own peril, as long-term returns from equities consistently have outpaced long-term returns from other asset classes, such as fixed income and cash. As well, those returns are from eras when the 10-year Treasury bond yield was not sub-2.0%. So what's a potential equity strategy for investors amid all the uncertainty? Argus believes that Min Vol is an all-weather strategy that is timely in any investing climate. Academic literature and, more to the point, returns history indicate that Min Vol can deliver market-matching returns on an absolute basis and superior returns on a risk-adjusted basis over various time periods.

Stocks rebounded on Thursday morning following positive earnings reports from Travelers and Baker Hughes, a day after the Nasdaq dropped into correction territory. On the employment front, the Labor Department said that first-time claims for state unemployment benefits rose to 286,000 for the week ended January 15, up from 231,000 a week earlier and above the consensus forecast of 225,000. The Dow rose 1.2%, the S&P 1.3%, and the Nasdaq 1.8%. Crude oil rose to near $88 per barrel, while gold fell $3 to $1840 per ounce.

Stocks were mixed on Thursday morning, steadying after the sharp Fed-driven selloff on Wednesday. Manufacturing data was strong. The Commerce Department said that U.S. factory orders rose 1.6% in November, up from 1.2% in October and above the Reuters consensus forecast of 1.5%. On the employment front, first-time claims for state unemployment benefits rose to 207,000 for the week ended January 1, up from 200,000 a week earlier and above the consensus forecast of 195,000. The Dow fell 0.3%, the S&P was flat, and the Nasdaq rose 0.2%. Crude oil rose more than 2% to near $80 per barrel, while gold fell $35 to $1790 per ounce.

Our bond/stock asset-allocation model indicates that stocks and bonds - both of which are overvalued against their own metrics - are near fair value against each other. Our model takes into account current levels and forecasts of short-term and long-term fixed-income yields, inflation, stock prices, GDP, and corporate earnings. The output is expressed in terms of standard deviations to the mean, or sigma. The mean reading from the model, going back to 1960, is a modest premium for stocks of 0.15 sigma, with a standard deviation of 1.0. The current valuation level is 0.29 sigma premium for stocks. Generally, the model has done a good job highlighting asset-class value. Stocks were very attractive compared to bonds in the late 1970s, when benchmark Treasury rates were in the high teens before heading lower over recent decades. The model indicated that stocks were at a sharp premium to fair value compared to bonds prior to the "dot-com" crash of 2001 and also at a premium prior to the Great Recession in 2007-2009. Starting in 2009, the model favored stocks over bonds -- another good call. The markets can manage with premiums and discounts for extended periods. But the high valuations on stocks (currently about 50% above fair value) leave little room for disappointment on earnings, interest rates, or even the country's health. Our current recommended allocation for moderate accounts is 70% growth assets, including 65% equities and 5% alternatives; and 30% Fixed Income, with 200 basis points of the bond allocation in cash.

One of the major problems with chart reading (and we have been doing it for decades) is that you can have two very similar charts with very bullish setups -- and one works to a "T" and the other smacks you in the head. Of course, if every bullish or bearish chart worked, it wouldn't be chart reading. It would be chart certainty.

We continue to monitor market breadth carefully, as longer-term measures remain supportive of higher stock prices and intermediate-term breadth has improved back to bullish.

Stocks were mixed on Thursday morning following earnings reports from IBM, Tesla, and Blackstone, and new employment data. IBM shares fell more than 7% after the company posted weaker-than-expected third-quarter revenue, while Tesla rose 3% after strong 3Q earnings, driven by record vehicle deliveries. On the employment front, the Labor Department said that first-time claims for state unemployment benefits fell to 290,000 for the week ended October 16, down from 296,000 a week earlier and below the consensus forecast of 297,000. The Dow fell 0.2%, the S&P was flat, and the Nasdaq rose 0.4%. Crude oil fell more than 1% to $82 per barrel, while gold traded near $1781 per ounce.

No matter how you slice it, Monday was ugly and one of the worst days of the year for stocks. Fortunately, a pretty strong late-day rally cut into the losses. The S&P 500 was clocked for 1.7% or 75 points, one of the larger daily losses in 2021. At the lows, the index was down 127 points or 2.9%. In the process, the index lost its 50-day average for the first time since October 2020. It was also the first time that the index fell to its middle weekly Bollinger Band (BB) since October. NYSE breadth was -2,359, the fourth-worst reading in 2021.

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.

To quote Humphrey B. Neill, the public is often right during the trends, but wrong at both ends. Or, as John Maynard Keynes offered up, markets stay irrational longer than you can stay solvent. Keep that in mind as we review current sentiment barometers.

Stocks rose on Thursday morning following new weekly employment data. The Labor Department said that first-time claims for state unemployment benefits fell to 385,000 for the week ended July 31, down from 399,000 a week earlier but slightly above the Bloomberg consensus of 383,000. The Commerce Department reported that the U.S. trade deficit rose 6.7% to a record $75.7 billion in June, driven by a sharp increase in imports. The consensus forecast was $74.1 billion. The Dow rose 0.6%, the S&P 0.5%, and the Nasdaq 0.6%. Crude oil rose to $69 per barrel, while gold traded near $1805 per ounce.