Markets are split. The Nasdaq is down. The small-cap Russell 2000 is higher. Crude oil prices are up 3%. Key inflation data is coming this week on Friday. AI superstar Nvidia reports on last quarter on Wednesday. It's a busy week.

Dividend income is often overlooked amid gyrations in the stock market. 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%. 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. High-yield stocks typically have dividends that pay out in the 5%-8% range. Though the income appears attractive, the share prices of high-yield stocks may be at risk. Dividend-growth stocks typically have lower yields, often in the 1.0%-2.5% range. But the lower-yielding dividends are not likely to be a huge component of cash flow, leaving management teams with other value-additive options for deploying cash. Further, while the yields are not as high, management teams may be more likely to boost the payouts over time, as earnings grow.

Dividend income is often overlooked amid gyrations in the stock market. 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%. 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. High-yield stocks typically have dividends that pay out in the 5%-8% range. Though the income appears attractive, the share prices of high-yield stocks may be at risk. Dividend-growth stocks typically have lower yields, often in the 1.0%-2.5% range. But the lower-yielding dividends are not likely to be a huge component of cash flow, leaving management teams with other value-additive options for deploying cash. Further, while the yields are not as high, management teams may be more likely to boost the payouts over time, as earnings grow.

Mortgage rates near 7% are pushing prospective buyers to the sidelines and could turn housing to a drag on 2Q GDP after a strong contribution to 1Q growth. "Millions of potential homebuyers have been priced out of the market by elevated home prices and interest rates," according to The State of The Nation's Housing report, which was published yesterday by Harvard's Joint Center for Housing Studies. Fannie Mae's Home Purchase Sentiment Index for May dropped by 2.5 points to an all-time survey low of 69.4. Just 14% of consumers said that it is a good time to buy a home, down from 20% in April. Doug Duncan, Chief Economist at Fannie Mae, said "While many respondents expressed optimism at the beginning of the year that mortgage rates would decline, that simply hasn't happened, and current sentiment reflects pent-up frustration with the overall lack of purchase affordability." Based on the June 20 GDPNow estimate from the Atlanta Fed, residential fixed investment is expected to be a small drag (about 5 basis points) on 2Q GDP after contributing 57 basis points to GDP growth in 1Q. Residential fixed investment is poised to decline by an annualized 1.3% in 2Q after 15.4% growth in 1Q, according to the Nowcast. Yesterday, the Commerce Department reported May Housing Starts of 1.28 million at a seasonally adjusted annual rate, down from 1.58 million year earlier. This morning, we expect the National Association of Realtors to report May Existing Home Sales of 4.10 million (SAAR), down from 4.23 million in May 2023. Next week, we expect the Commerce Department to report May New Home Sales of 640,000 (SAAR), down from 741,000 a year earlier. The S&P/Case-Shiller National Home Price Index jumped 6.5% in March. We expect it to rise about 4.5% for April. The Zillow Home Value index rose by 4.3% in April and 4.3% in May. High mortgage rates are a challenge, but we remain bullish on the sector because demographics point to strong demand amid a decades-long shortage of affordable homes.

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.

U.S. stocks are broadly higher at midday on Friday, with all of the major indices in the green along with crude oil and gold. In and among the mostly positive day is news on consumer sentiment that was not so positive, with the final University of Michigan reading for May coming in at 69.1 compared to 77.2 in April. In other economic news, orders for durable goods rose 0.7% in April compared to expectations of a 0.5% drop.

Homebuilder confidence was unchanged in April after four consecutive increases, according to the recent National Association of Home Builders/Wells Fargo Housing Market Index. The index value was 51. A reading over 50 indicates that more builders see conditions as good than poor. NAHB Chairman Carl Harris said that many "frustrated buyers" were "back on the fence waiting for interest rates to fall." The NAHB's Chief Economist, Robert Dietz, said: "April's flat reading suggests potential for demand growth is there, but buyers are hesitating until they can better gauge where interest rates are headed," On April 8, Fannie Mae released its Home Purchase Sentiment Index for March, which declined after three consecutive increases. The company's Chief Economist, Doug Duncan, said: "Consumers took a slightly more pessimistic view on the likely direction of mortgage rates, likely reflecting the fact that actual mortgage rates have moved upward since the start of the year." The 30-year mortgage rate rose to 6.88% last week from 6.62% on January 4, according to Freddie Mac. On Tuesday, the Commerce Department reported March Housing Starts of 1.32 million at a seasonally adjusted annual rate, down 4.3% from a year earlier. This morning, we expect the National Association of Realtors to report March Existing Home Sales of 3.9 million (SAAR), down from 4.35 million in March 2023. On April 23, we expect the Commerce Department to report March New Home Sales of 672,000 (SAAR), up 5.0% year-over-year. Based on the April 16 GDPNow estimate from the Atlanta Fed, first-quarter GDP is expected to rise 2.9%, with positive contribution from residential fixed investment. The S&P/Case-Shiller National Home Price Index jumped 6.1% in December. We expect it to rise about 4% for February. The Zillow Home Value Index was up 3.6% in February. The 10-year Treasury yield is a benchmark for mortgage rates. It disconcertingly rose to 4.60% yesterday from 3.95% on January 2.

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 first quarter of 2024 was rewarding for equity investors, as the S&P 500 increased 10.2%. Much of the market participated, as the S&P 500 Growth Index advanced 12.6% and the S&P 500 Value Index rose 7.4%. Leading sectors included Communication Services (+15.6%), Energy (+12.7%), Technology (+12.5%), Financials (+12%), and Industrials (+10.6%). The average stock in the Argus Universe of Coverage rose 8.0% during the year, and the median stock advanced 7.2%. The average BUY-rated stock increased 9.9%, while the average HOLD-rated stock gained 3%. Will the market's breadth hold up for the balance of 2024 or will investors revert to the so-called Magnificent 7? Will small-caps pick up their pace (the Russell 2000 was up "only" 4.8% in 1Q) or is the current bull-market rally due for a break, with some profit-taking coming into play? Given declining interest rates, we expect growth stocks to continue to lead stocks higher, while the risk of recession puts a premium on clean balance sheets, which are also more prevalent among large-caps. Investors seeking value are encouraged to focus on dividends and look for yields in the 3%-4% range. Here are the Top 10 Performers from the Argus Universe last quarter (including representatives of six of the 11 major sectors) as well as the Bottom-Five Performers.

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.

U.S. stocks were rallied on Monday morning led by tech stocks as investors await the Fed's decision as to whether there will be three rate cuts in 2024. Treasury yields are edging higher. The Dow rose 0.4%, the S&P 500 was up 0.9%, and the Nasdaq gained 1.2%. Crude oil traded above $82 per barrel, while gold traded above $2162 per ounce.

Stocks edged higher on Thursday morning following new economic data. The advance reading of U.S. GDP came in at 3.3%, down from 4.9% in 3Q but well ahead of the expected 2%. GDP was boosted by increases in consumer spending in both goods and services. On the housing front, new home sales for the month of December rose 8% to a seasonally adjusted annual rate of 664,000. The median sales price of new houses sold in December 2023 was $413,200. The average sales price was $487,300. The Dow rose 0.2%, the S&P 500 was up 0.5% and the Nasdaq gained 0.6%. Crude oil traded above $76 per barrel, while gold fell to $2015 per ounce.

Dividend income is often overlooked amid gyrations in the stock market. 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%. 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. High-yield stocks typically have dividends that pay out in the 5%-8% range. Though the income appears attractive, the share prices of high-yield stocks may be at risk. Dividend-growth stocks typically have lower yields, often in the 1.0%-2.5% range. But the lower-yielding dividends are not likely to be a huge component of cash flow, leaving management teams with other value-additive options for deploying cash. Further, while the yields are not as high, management teams may be more likely to boost the payouts over time, as earnings grow.

On Friday, we expect to see more evidence that the U.S. job market is cooling. Last week, Fed Chair Powell provided a similar view when he said that, "Labor market conditions remain very strong, and the economy is returning to a better balance between the demand for and supply of workers." That said, Mr. Powell reiterated the central bank's commitment to reducing inflation to 2%, dampening expectations for a rate cut at the Fed's next (December 12-13) meeting. "It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease," he said. We expect the Bureau of Labor Statistics to report that November payroll growth eased to 145,000 from 150,000 in October and the unemployment rate held at 3.9%. We believe the three-month average of payrolls will drop below 200,000. We are forecasting growth in average hourly earnings to remain at 4.1% and average hours worked to tick down to 34.2. We have become less concerned that the job market is running too hot and increasingly concerned the Fed's "restrictive stance" could cause jobs to cool too much. The Fed's pre-meeting survey of nationwide economic conditions (the Beige Book) said "Reductions in headcounts through layoffs or attrition were reported, and some employers felt comfortable letting go low performers." While this is anecdotal, unemployment is not necessarily a lagging indicator. The Sahm Rule, developed by former Fed economist Claudia Sahm, posits that an economy is likely to enter a recession when the three-month average unemployment rate rises by 50 basis points or more from its prior 12-month low (currently 3.5%). The St. Louis Fed tracks the real-time Sahm Rule on its FRED database. The recession indicator remains below the critical 0.50, but it rose to 0.33 in October from 0.00 in April. That makes a jobless rate in the low 4.0% range the danger point for this cycle.

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

Stocks edged lower on Friday morning as investors weighed more 3Q earnings reports along with new housing market data. Gap Inc. reported much stronger than expected adjusted 3Q EPS, sending the shares up nearly 30%. However, management warned of softer consumer spending in the coming quarters, echoing recent comments from Walmart and Target. On the housing front, the Commerce Department said that single-family housing starts edged up 0.2% in October to a seasonally adjusted annual rate of 970,000, while overall starts rose 1.9% to an annualized 1.372 million, above the Reuters consensus of 1.35 million. The Dow fell 0.1%, the S&P 0.1%, and the Nasdaq 0.2%. Crude oil traded near $75 per barrel, while gold fell to $1985 per ounce.

Even with a Fed meeting on tap, Friday's employment report is the most-important economic event of the week. Nonfarm payrolls are likely to provide important new information about the path of the economy and interest rates. There is less suspense surrounding Wednesday's announcement on monetary policy, as traders have parsed recent speeches by Jerome Powell and his colleagues and inferred that the Fed is likely to hold the policy rate steady at 5.25%-5.5%. Fed funds futures put that probability at 99%. September's payrolls surprised us and the Street, jumping by 336,000 and putting our "cooling" thesis in question. Job gains in July and August were revised higher by 119,000, taking the three-month average from a reassuring 150,000 to a rattling 266,000 and keeping the possibility of a December rate hike on the table (particularly after last week's report that 3Q GDP jumped 4.9%, boosted by consumer spending). We forecast signs of a cooling labor market, with October payrolls easing to 160,000 and the unemployment rate holding at 3.8%. We expect growth in average hourly earnings to slow to 4.1% and average hours worked to tick down to 34.3. The Fed's pre-meeting survey of U.S. economic conditions, known as "Beige Book," said "Labor market tightness continued to ease across the nation." As well, Mr. Powell told the Economic Club of New York that many indicators suggest conditions remain tight, but "the labor market is gradually cooling," with job openings well below their highs, the number of people quitting their jobs declining to pre-pandemic levels, and wage premiums declining for those who change jobs. If payrolls come in hot, the probability of a December 13 rate hike should rise and the 10-year yield could retest 5%, making Friday the scariest day of the Halloween week.

We expect holiday sales to rise 3% this year to almost $1 trillion. With the unemployment rate below 4%, this should be another festive season despite elevated inflation, tight monetary policy, and the end of financial assistance programs enacted during the pandemic. This month, Walmart CEO Doug McMillon said the back-to-school season started strong and that normally means the holiday season is going to be "good." The average annual sales gain during the past 20 holidays has been 4%, with a 5% increase last year and a high of 14% in the pandemic-recovery year of 2021. The period's only decline, of 5%, came as the economy entered a deep recession in 2008. We calculate holiday sales the same way the National Retail Federation does, based on the year-over-year change in the Commerce Department's Retail Sales data for the combined months of November and December. Like the NRF, we exclude sales at gas stations, car dealers, and restaurants -- and focus on core retail. There are three big categories that represent two-thirds of holiday sales and drive our forecast: grocery stores, General merchandise stores, and e-commerce. Our forecasts for those categories are +2%, +2.5%, and +6.6%, respectively. E-commerce is the toughest call. The category must lap 9.5% growth during the 2022 season on top of 11.3% in 2021, but online spending has remained strong, growing 7.6% year-over-year in August and 11.8% (aided by Amazon Prime Days) in July. The exclusion of restaurants boosted our tally during the pandemic because people didn't eat out, and spent more of their food budget at grocery stores. We expect that spending trend to reverse this year. For the first eight months of 2023, groceries were up 3.3% and restaurants were up 12%. Mastercard expects retail sales to grow 3.7% from November 1 through December 24, helped by 6.7% growth in e-commerce and 5.4% growth at restaurants.

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.

Stocks fell on Friday morning, extending Thursday's sharp selloff, as investors weighed hawkish comments from Fed Chair Powell in Jackson Hole. Mr. Powell said that the Fed would 'hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective,' and that the central bank was 'prepared to raise rates further if appropriate.' Mr. Powell also reiterated that the Fed would maintain its 2% inflation target. The Dow fell 0.1%, the S&P 0.2%, and the Nasdaq 0.3%. Crude oil rose 1% to $80 per barrel, while gold fell $11 to $1936 per ounce.

The stock market has benefitted from something amazing. The Federal Open Market Committee has boosted its policy rate by 5.25 percentage points since March 2022. The Core PCE inflation gauge has dropped from 5.4% to 4.1% and the unemployment rate is still at 3.6%. In his press conference after hiking the funds target range to 5.25%-5.50%, Fed Chairman Powell described the recent declines in inflation without any meaningful negative impact on the labor market as being "a real blessing." Despite the chairman's gratitude for past policy outcomes, he was more measured about the future. "When central banks go in and slow the economy to bring down inflation, the result tends to be some softening in labor market conditions," he said. "That is still the likely outcome here," he added. We agree. If the tally of rate increases is going to end at the current 11, we believe the job market will need to cool in the reports on August 4 and September 1 (before the FOMC's next rate decision). This Friday, we expect the unemployment rate to remain at 3.6% and for growth in nonfarm payrolls to decelerate to 180,000 compared with 209,000 in June. We expect average hourly earnings to grow more slowly than in June, at 4.2%; average hours worked to be flat at 34.4 hours; and the labor participation rate to remain near 62.6%. We also expect the FOMC members to be watching the Job Openings and Turnover Survey (JOLTS) from the BLS. We expect the number of job openings to fall slightly from 9.8 million at the end of May and the ratio of openings to unemployed to continue a gradual decline. The number of people leaving their jobs voluntarily, or "quits," declined to about 4 million in May from a peak of 4.5 million in November. We expect this trend to continue as part of the labor market tightening the Fed wants to see.

Yesterday's report on retail sales should be good news for Jerome Powell. This week, the Federal Reserve chairman reiterated his commitment to driving inflation down to 2% "with the minimum damage...to the economy." Retail sales rose 1.6% on a year-over-year basis in May and preserve hope that the Fed will engineer a soft landing. The result was above our estimate for a 1.5% increase. Evidence of consumers' resilience continues. Ongoing weakness in big-ticket discretionary categories justifies the central bank's pause at the June meeting (to monitor the latent effects of 10 previous rate hikes). Record-high credit-card rates have made consumers reluctant to purchase items that may take months to pay off. Sales at electronics and appliance stores were down 5% from May 2022; furniture and home furnishings stores declined 6.4%; and building materials stores were off 0.9% at their busiest time of the year. Retail sales grew by less than the 4% increase booked in May, suggesting that consumers are buying fewer units or switching to cheaper products. Sales at grocery stores also lagged inflation in the CPI's "food at home" category. Sales at gas stations felt deflation, falling 20.5% year-over-year. Overall, retail sales would have been up 4.0% in May without the drag from gasoline. Sales at food service and drinking places jumped 8.0%. Excluding this category, retail sales were only up 0.7% from the prior-year period. The nonstore retailers category, which is dominated by e-commerce, remained strong, growing 8.0% year-over-year. While yesterday's report may tell the Fed that it is making progress, it is telling investors to focus on value retailers like Walmart and Costco or innovators such as Dick's or Williams-Sonoma.

Monday Tee Up: Hike or Pause?

The major indices were mixed on Thursday morning amid continued debt ceiling uncertainty, though a stellar report from Nvidia lifted the Tech sector, which was up nearly 4%. Nvidia shares jumped 27% after the chipmaker reported strong fiscal 1Q results and issued much higher-than-expected sales guidance for the second quarter. The Dow fell 0.4%, the S&P rose 0.7%, and the Nasdaq rose 1.6%. Crude oil fell $2 to $72 per barrel while gold fell $18 to $1946 per ounce.

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 $15 billion to define a SMID stock.

Stocks are lower Friday morning. The preliminary reading for March's University of Michigan's consumer sentiment index came in lower than expected at 63.4 as both current and future expectations eroded. Industrial Production remained flat sequentially against estimates for a 0.5% rise, while capacity utilization came in lower than expected at 78.0%. FedEx Corp (FDX) is rallying 8.41% after the company topped earnings estimates and raised its full-year earnings guidance range above consensus. Lastly, First Republic Bank (FRC) is plunging more than 25% despite a consortium of 11 U.S. banks depositing $30 billion with the bank to stabilize the banking rout. The S&P 500 is down 1.2%, the Dow is down 1.3% and the Nasdaq is down 1.0%. Crude oil traded near $66 per barrel, while gold rose $43 to $1966 per ounce.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

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 was 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.

Stocks fell on Monday morning at the start of the holiday-shortened week, led by sharp losses in Energy and Consumer Discretionary stocks. Disney shares rose 7% after the company announced that former CEO Bob Iger would return to the top job, replacing Bob Chapek, who had served as CEO for less than three years. The Dow fell 0.3%, the S&P 0.6%, and the Nasdaq 1.0%. Crude oil fell $5 to $75 per barrel, while gold fell $18 to $1736 per ounce.

Small- and mid-cap stocks (SMID stocks) have underperformed large-caps over the past 12 months, but still may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine. As well, the prices of SMID stocks generally are lower than the prices of large-caps. SMID stocks can be risky -- and large-caps outperformed SMID stocks in 11 of the 19 years in our test period. Still, despite the risks, 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.

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 Thursday morning following new GDP and employment data. The Commerce Department said that the U.S. economy contracted at a 0.6% rate in the second quarter, less than its initial estimate of a 0.9% decline and an improvement from the 1.6% decline in 1Q. The estimate was also better than the Reuters consensus, which had called for a decline of 0.8%. The Dow rose 0.4%, the S&P 1.0%, and the Nasdaq 1.4%. Crude oil fell slightly to $94.50 per barrel, while gold traded near $1768 per ounce.

The major indices have come a long way off their June lows, likely further than most expected. Where they stop, nobody knows. Many bears are throwing in their towels quicker than children lose their attention when doing homework. So far, every piece of resistance (until Tuesday) has been sliced through like a laser through metal.

Stocks were mixed on Thursday morning following earnings reports from Tesla, AT&T, and United Airlines, and new weekly employment data. Investors also weighed a rate hike in Europe. The European Central Bank announced a 50-basis-point hike in its benchmark interest rate, more than the 25-basis-point increase that had been expected and the first hike since 2011. The move sent the euro higher against the dollar, though the gains were tempered by political turbulence in Italy following the resignation of Prime Minister Mario Draghi. The Dow fell 0.4%, the S&P rose 0.2%, and the Nasdaq rose 0.4%. Crude oil fell nearly 4% to $96 per barrel, while gold traded near $1710 per ounce.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

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.

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.

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.

Stocks rose on Tuesday morning as investors weighed new retail sales data and awaited more public comments from Fed Chair Jerome Powell. The Commerce Department said that U.S. retail sales rose 0.9% in April, in line with the Reuters consensus forecast. March retail sales were also revised up to 1.4% growth from a prior 0.7%. On the earnings front, Walmart shares fell 9% after the retailer posted disappointing 1Q earnings and lowered its full-year guidance. The Dow rose 0.6%, the S&P 1.1%, and the Nasdaq 1.3%. Crude oil traded near $115 per barrel, while gold rose $5 to $1819 per ounce.

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

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 Home Depot, Inc. (HD); JPMorgan Chase & Co. (JPM); Palo Alto Networks Inc (PANW); Lilly(Eli) & Co (LLY) and the Focus List deletions are Williams-Sonoma, Inc. (WSM); U.S. Bancorp. (USB); Western Digital Corp. (WDC); IQVIA Holdings Inc (IQV).

The entire yield curve has fallen a bit over the past couple of days. While the broader uptrend for yields remains unbroken, it is a nice relief for the stock market, and especially the higher-beta names and indices that were in danger of testing their bear-market lows. The S&P 500 rose 1.1% on Wednesday, while the Nasdaq and the QQQs jumped 2%. NYSE breadth was good at +1,964 while we saw an 80% day with respect to advancing issues/total issues and advancing volume/total volume. The 2/10 spread, after sneaking into negative territory ever so slightly, is back to +33 basis points. So it seems the recession is off for now (!!).

This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

Small- and mid-cap stocks (SMID stocks) have underperformed large-caps over the past 12 months, but still 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. As well, the prices of SMID stocks generally are lower than the prices of large-caps. That said, SMID stocks can be risky and large-caps outperformed SMID stocks in 11 of the 19 years in our test period. Still, despite the risks, 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.

Stocks fluctuated near breakeven on Thursday morning, a day after the Federal Reserve raised interest rates for the first time since 2018 and signaled that it would raise rates at all six of its remaining meetings this year. It expects inflation to remain above its 2% target rate through at least 2023. Fed Chair Jerome Powell also indicated that the central bank would begin to unwind its balance sheet in May. The Dow rose 0.1%, the S&P rose 0.1%, and the Nasdaq fell 0.1%. Crude oil traded near $102 per barrel, while gold rose $39 to $1949 per ounce.