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 that year. Stocks have recovered and a new bull market has started, but gains have been largely driven by only a handful of high-tech companies. Inflation remains an issue and the Federal Reserve has yet to lower rates. Is a recession in the offing? With all the uncertainty, 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.

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 that year. Stocks have recovered and a new bull market has started, but gains have been largely driven by only a handful of high-tech companies. Inflation remains an issue and the Federal Reserve has yet to lower rates. Is a recession in the offing? With all the uncertainty, 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.

Demand from all corners of the globe for the safety and security of U.S. Treasury debt has acted to keep a lid on long-term interest rates, even as the Federal Reserve has raised short-term rates aggressively for more than two years and inflation has remained stubbornly high. Total public debt owed by the U.S. federal government was $34.6 trillion at the end of 1Q24, according to the U.S. Department of the Treasury. Outside of U.S. investors, the two largest holders of U.S. public debt are the nations of Japan, which owns 3.3% of the debt, and China, which owns 2.3%. The other nations among the top 10 holders have 8% of the debt, so the top 10 holders collectively own about 14%. The grand total of U.S. debt owned by foreign holders is $8.0 trillion, or about 23% of the total. This total holdings level has been steady over the past six months. Japan has been a leader here, as the nation's holdings have increased by 5%, or $50 billion in the past six months. China, meanwhile, has been selling, in part for political reasons. China's current Treasury holdings are lower by about $50 billion this year. Over in Europe, countries such as Belgium, France, and Luxembourg have been buyers. We think this type of global demand for U.S. Treasuries should help keep long-term rates from spiking much higher in 2024-2025.

In this edition, diving into mining in China; initiating coverage of Amer Sports; watching the waves in the cruise line industry; and Ericsson, Estee Lauder Companies, and GE HealthCare.

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.

In this edition, diving into mining in China; initiating coverage of Amer Sports; watching the waves in the cruise line industry; and Ericsson, Estee Lauder Companies, and GE HealthCare.

Sentiment very bullish? Check. Major indices and market leaders extremely overbought? Check. Technical sell signals? Not so much. Is the probability of at least a pullback rising with every tick higher? Very likely. We are entering a market period known as the "summer doldrums," as market participants head to favorite vacation spots in droves -- which leads to a decline in trading volume and a less-liquid market. The average person can't buy stocks if they are spending on an overpriced rental house, overpriced food, overpriced libations, and overpriced entertainment. Last Wednesday, the NAAIM Exposure Index popped to 104% from 85% the week before, from 69% on June 5, from 59% on April 22, and from 54% on Jan. 16. On October 23, 2023, exposure dropped to a very low reading of 25%. The July 12 release is likely to be even higher than 104%, with the market trudging upward since last Wednesday. Exposure was at 105% four months ago, which led to a quick pullback and a nice reset. There are periods when exposure can remain high or even very high for many months without a major price pullback or correction. Then there are periods when exposure rises over 100% and downside action kicks in fairly quickly. Bulls in the Investors Intelligence poll of newsletter writers rose to above 63% this week. According to sentimentrader.com, that has occurred only 3% of the time since 1971. While this level of bullishness leads to subpar annualized returns, and some indigestion in the short term, it surprisingly has not led to major damage. (Mark Arbeter, CMT)