A Cryptocurrency Primer In recent years, a hot -- and at times controversial -- topic in the financial community has been cryptocurrency supported by blockchain technology. Cryptocurrencies first emerged in 2009 as a new technology, and offer some potential advantages to traditional currencies while creating new trading opportunities. Still, there are major risks as well. Blockchain and Mining Cryptocurrencies are supported by a technology known as blockchain, which is a tamper-resistant leger of transactions that outlines the ever-changing ownership of the underlying currency. Cryptocurrency is able to eliminate the middlemen in transactions through the blockchain as it records each transaction and stores the information in blocks. Blockchain technology is what has made cryptocurrency viable as it prevents individuals from making copies of their holdings and using them for multiple transactions, an issue that has prevented previous attempts at creating a digital currency. Many cryptocurrencies, such as Bitcoin, are created through a complex and energy-intensive process known as 'mining.' Mining involves a process of validating and updating transactions to the digital ledger, or blockchain. Crypto mining prevents the double use of coins as it is both remarkably expensive and inefficient to submit false transactions to the ledger, while being remarkably easy for other parties to verify the correct transactions. The crypto miners reward for correctly solving the complex algorithms required to upload transactions are new coins that get generated after solving the algorithm. Given this process, a malicious actor would need to control more than 50% of the entire mining network in order to record false transactions successfully, while overcoming extremely high physical hardware and energy demands. There are over 2 million cryptocurrencies in circulation, ranging from micro-cap to mega-cap, with some rising to valuations worth hundreds of billions of dollars. Crypto Pros Crypto offers several advantages as an alternative investment, which gives it certain unique benefits that traditional currencies do not offer. Inflation protection is one such advantage for many cryptocurrencies, with Bitcoin (as an example) having a hard cap of only 21 million coins that will ever reach circulation. With nearly 19.8 million coins currently in circulation, Bitcoin is programmed to halve the pace of its mining rewards every four years, making it a more-attractive investment in times of high inflation. The price of Bitcoin historically has risen following each halving cycle, this as prices must keep up with the high energy costs required to maintain the ledger and in order for it to remain worthwhile for miners (as the rewards become increasingly smaller). Crypto transaction speeds also offer an advantage over traditional currencies. Indeed, transferring a cryptocurrency can be accomplished within minutes rather than the several days needed by most U.S. financial institutions to process a transaction. As well, given the elimination of third-party vendors to validate transactions, transactions costs can be significantly lower than is the case with traditional methods of sending currencies, particularly when transferred overseas or as a large value transfer. Volatility has become associated with crypto given the swings in the price of Bitcoin, Ethereum, and other cryptocurrencies, with prices often rising and falling more than 50% over the span of just a few months. While this volatility has made crypto a popular short-term trading asset for traders looking to make significant gains amid the large swings in pricing, other investors have held firm, utilizing what has become known as a 'HODL' mentality as they 'Hold On for Dear Life.' Crypto Cons Despite the potential upside of investing in cryptocurrencies, there are also serious risks. User risk is one of the major issues seen with crypto, as entire balances can become lost if an investor losses a password or pass phrase associated with an account. This issue has reached such a high level that some early investors have been known to purchase waste dumps where they knew hard drives containing valuable holdings had been erroneously discarded. It is estimated that one-fifth of all Bitcoins are permanently lost due to the loss of passwords. As well, there is no way to rescind a transaction after it has been recorded. The manipulation of crypto markets also remains a large risk with cryptocurrencies, as there have been several instances of unethical practices. This is a particular issue as regulation remains a looming question in the crypto community, with plenty of grey areas surrounding crypto legislation in the U.S. and sudden shifts in regulation that dramatically impacted the way that crypto is bought and sold. Given the limited regulation, some large account holders, known as whales, have engaged in pump-and-dump schemes that have artificially caused the price of certain cryptocurrencies to skyrocket or plunge. Liquidity can also be an issue in crypto, especially with lesser-known coins that hold limited demand. While liquidity has improved over the past few years across the crypto market, particularly for the largest coins such as Bitcoin and Ethereum, it remains an important factor to be considered. The Future for Crypto Looking at crypto as a currency alternative is an interesting exercise as the issue is relatively complicated. Bitcoin, for example, has largely been described as a 'digital gold,' offering its best use-case as a means to settle transactions. Rival Ethereum is largely considered closer to a 'digital oil,' serving to power an ecosystem of digital contracts. There are many different types of crypto currencies across the market. Besides Bitcoin, stablecoins could make a convincing case for serving in the place of traditional currency. Stablecoins are cryptocurrencies that are backed by another asset, such as a currency, commodity, or financial instrument. Stablecoins are not as volatile as non-backed cryptocurrencies and have increased traction across various markets. European fund giant DWS has announced plans to launch the first euro-backed stablecoin in 2025, which we think demonstrates the potential of these coins. Still, stablecoin issuer Paxos was under SEC investigation for their USD-backed stablecoin due to speculation about possible violations of securities laws. The SEC decided it will not be continuing action in the case, but the event does highlight the issue of stability for the asset. Blockchain technology may also see an increase in its number of use cases. As the world becomes increasingly data-driven, blockchain may be able to help with data and information management. Healthcare is thought to be an industry that could benefit from blockchain technology, with opportunities surrounding the security of patient data, transparency and traceability in the supply chain, and a reduction in the risk of data breaches. Blockchain may also find use in the financial industry as it has the potential to streamline banking and lending services, reduce counterparty risk, and decrease issuance and settlement times. While classifying crypto as an alternative asset class offers the potential for major upside, there remains uncertainty. One of the biggest concerns is regulation. In many countries, crypto is already becoming increasingly regulated -- but in the U.S., lawmakers have been slow to respond, forcing companies to rely on legal battles as they fight to establish greater clarity in the market. Furthermore, many states have adopted their own laws on cryptocurrencies, creating barriers for some would-be market participants. Conclusion Despite these risks, there remains optimism over the growth of cryptocurrencies, and that has fueled a significant rise in the price of Bitcoin and Ethereum over the past 12 months. Global conflicts and geopolitical tensions have led some to believe that cryptocurrencies offer a potential hedge against instability in currency fluctuations and financial markets. Amid the rapid rise in inflation in Venezuela and Argentina, El Salvador has adopted Bitcoin as an official legal tender. Additionally, former U.S. president and current presidential candidate Donald Trump has suggested that the U.S. should establish a Bitcoin strategic reserve. Within the financial world, BlackRock CEO and co-founder Larry Fink has described Bitcoin as 'digital gold,' offering some legitimacy to it being used as a hedge against currency fluctuations. According to Mr. Fink, 'It is a legitimate financial instrument that allows you to have maybe uncorrelated, non-correlated returns.' BlackRock has launched a Bitcoin ETF, which saw $4 billion in net inflows in the second quarter, and, more recently, an Ethereum ETF. Crypto seems to be gaining traction within the investment community and seems to hold promise in regards to growth. Despite recent excitement around crypto, there are still some factors that can be cause for concern -- such as a lack of regulation, a lack of fundamentals for valuation, and other potential pitfalls. Yet even with these concerns, the future of crypto still appears to be bright as the asset appears to be gaining increasing traction.

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.

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.

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.

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.

With earnings season in full swing, the volume of insider transactions has fallen to seasonal lows, with only 615 transactions meeting the criteria for inclusion in Vickers Weekly Insider Report. While that is down from the recent weekly high of 2,284 transactions, there is still noteworthy data to consider.

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.

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.

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.

Monday Tee Up: A Super Week

In the final weeks of 2023, insiders took to the sidelines -- seemingly happy to ride out a successful year for stocks but also unwilling to take action that suggested a roaring start was in the offing for stocks in 2024. A mere week into the new year, and that positioning seems to be well founded. That said, there are many forces at play during the end-of-year and start-of-year changeover -- and we are not inclined to make major pronouncements based on current insider signals, or on the failed Santa Claus Rally, end-of year tax-loss selling, start-of-year capital-gains selling, etc., etc. But here are the current insider-sentiment numbers from Vickers Stock Research.

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 edged higher on Monday morning, extending last week's gains amid optimism about an end to Fed rate hikes. Investors weighed earnings reports from Berkshire Hathaway and Dish Network and awaited results from Disney later in the week. Tesla also announced plans to build a relatively low-cost electric car at its plant in Germany. The Dow rose 0.2%, the S&P 0.1%, and the Nasdaq 0.1%. Crude oil rose more than 1% to $81.50 per barrel while gold fell $9 to trade near $1990 per ounce.

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.

As we see it, economic trends in China bear watching closely -- for many reasons. China is an $18 trillion economy and represents about 19% of the $94 trillion global economy. Thus, China is a critical contributor to overall global economic growth, even if it "only" grows 5%-6% per year. But this year, global forecasters are expecting a slowdown in growth to 3% -- a rare below-emerging-market-average rate. Why? For one thing, China has stopped investing aggressively in housing and infrastructure. While the new infrastructure isn't likely needed, the spending is missed, particularly given the lack of pension and welfare spending as the government seeks to keep deficit spending at a low 3.0% of GDP. In the industrial segment of the economy, supply chains have been disrupted, but China's export business continues to expand. Still, there is concern down the road among export partners that China may borrow a page from Vladimir Putin's playbook and look to take over Taiwan. Over the long run, China appears to be an important growth market, with a population that is growing wealthier year over year. U.S. companies and investors want access to this market on fair terms. We group China in the international segment of the equity asset class. In our asset-allocation models, we target 2%-5% exposure to this group. That exposure can be achieved through regional ETFs, as well as through U.S.-based companies that depend on China for growth.

For the first time this month, the S&P 500 and the Nasdaq 100 (QQQ) have moved higher for two straight days -- one of the few positive things we can say about August. The month has seen lower stock prices, higher bond yields, a higher dollar, and cratering crypto markets. This too shall pass. The one positive for stocks is the rapidly increasing bearish market sentiment, especially considering the major index pullbacks have not been close to serious. In a bull market, if sentiment quickly turns sour (and it was overheating quite a bit at the end of July) that generally is a bullish sign for the overall market.

This should be an interesting week for Treasuries, as the recent movement in the five- and 10-year yields has been, for many, confusing from a technical perspective. The recent action suggests to us that the opinions of market participant are all over the place and indecision is extremely high.

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.

Stocks rallied on Friday morning following new signs of moderating inflation. The Commerce Department said that its personal consumption expenditures price index (PCE) rose 3.0% on an annualized basis in June, down from 3.8% in May and the smallest increase since March 2021. Excluding food and energy costs, the core PCE rose 4.1% from the prior year, down from 4.6% growth in May and slightly below the Reuters consensus forecast of 4.2%. Growth in labor costs also slowed. The Labor Department said that its employment cost index rose 4.5% on an annualized basis in 2Q, down from 4.8% growth in the first quarter. The Dow rose 0.5%, the S&P 0.8%, and the Nasdaq 1.5%. Crude oil fell slightly to $80 per barrel, while gold traded near $1959 per ounce.

Stocks rallied on Friday morning following new signs of moderating inflation. The Commerce Department said that its personal consumption expenditures price index (PCE) rose 3.0% on an annualized basis in June, down from 3.8% in May and the smallest increase since March 2021. Excluding food and energy costs, the core PCE rose 4.1% from the prior year, down from 4.6% growth in May and slightly below the Reuters consensus forecast of 4.2%. Growth in labor costs also slowed. The Labor Department said that its employment cost index rose 4.5% on an annualized basis in 2Q, down from 4.8% growth in the first quarter. The Dow rose 0.5%, the S&P 0.8%, and the Nasdaq 1.5%. Crude oil fell slightly to $80 per barrel, while gold traded near $1959 per ounce.

Certain longer-term measures of momentum and breadth have cycled back to bullish territory, some of which we have mentioned before. Longer-term measures take time to turn and are designed to get o in and keep you in for most of a bull market -- and to get you out and keep you out for the majority of a bear market. On Monday, we talked about monthly NYSE margin debt turning bullish.

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 rallied on Thursday as investors weighed strong earnings from Meta Platforms and new GDP and employment data. The Commerce Department said that the U.S. economy expanded at a 1.1% rate in 1Q, helped by strong consumer spending but hurt by weak business investment. Meanwhile, employment data pointed to a still tight labor market. First-time claims for state unemployment benefits fell by 16,000 to a seasonally adjusted 230,000 for the week ended April 22, below the consensus forecast of 248,000. Meta shares jumped after strong first-quarter results, reaching their highest levels since January 2022. Amazon also reported stronger-than-expected sales and earnings after the close, sending the shares up in after-hours trading. The Dow rose 1.57%, the S&P 1.96%, and the Nasdaq 2.43%. Crude oil traded near $75 per barrel, while gold rose slightly to $1997 per ounce.

Monday was quite a day in the oil market, as OPEC+ cut output. The timing seems very calculated, as the amount of crude oil in the U.S. Strategic Petroleum Reserve (SPR) has fallen from 660,000,000 gallons in 2020 to a current level of 372,000,000 gallons (the lowest level since 1983). The U.S. was able to assist in bringing WTI down below $70 a few weeks ago, from $130 in 2022. It's odd that the U.S. didn't start to refill the SPR as it accomplished its goal, helping industries and consumers save a lot of money. Gasoline prices (ex. taxes, fees, etc.) fell to a recent low of $2.00/gallon after spiking to $4.30/gallon in 2022.

The stock market has been bombarded with bearish news -- and the last thing investors needed was trouble in the banking sector. It took just two days for SVB Financial Group (SIVB) to implode and seven days for Silvergate Capital (SI) to get crushed. End of day, it felt a tad like 2008, when Lehman Brothers and Bear Stearns went down in a hurry. When banking problems start, more shoes often drop. Both of the above banks were big players in the crypto world, so the events of last week are perhaps not completely surprising.

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.

In the short-term, all the major indices appear to be tracing out small bull flags -- which are often seen during uptrends, as stocks take a breather to get recharged. During an advancing market, stocks and indices will pull back to their 10- or 21-day exponential moving averages (EMAs), and generally the retracements are very mild. At times, a stock or index pulls back to its 50-day, which is a bigger move.

Stocks were mixed on Friday morning after a much better-than-expected jobs report raised prospects for additional Fed rate hikes. The Labor Department reported that the U.S. economy added 517,000 payroll jobs in January, up from 260,000 in December and well above the Reuters consensus forecast of 185,000. The official unemployment rate ticked down to 3.4% from 3.5% in December. The Dow rose 0.2%, the S&P fell 0.1%, and the Nasdaq rose 0.1%. Crude oil fell 1% to $75 per barrel, while gold dropped more than 2% to $1880 per ounce.

Stocks extended their Fed-driven rally on Thursday, led by strong gains in the Communication Services, Consumer Discretionary, and Technology sectors. Meta Platforms jumped 23%, despite disappointing 4Q earnings, as investors focused on the company's better-than-expected revenue, cost-cutting efforts, and new share buyback plan. On the employment front, first-time claims for state unemployment benefits fell by 3,000 to 183,000 for the week ended January 28, below the Reuters consensus forecast of 200,000. The data came ahead of the government's January employment report on Friday morning. The consensus estimate calls for 185,000 new payroll jobs, down from 223,000 in December, and an unemployment rate of 3.6%, up from 3.5% a month earlier. The Dow fell 0.11%, the S&P rose 1.47%, and the Nasdaq soared 3.25%. Crude oil traded near $76 per barrel, while gold fell $16 to $1927 per ounce.

Certain major indices are approaching very important chart areas and (as we have said recently) some are very close to completing bullish reversal patterns. That could mean the indices would leave their bear markets behind and enter a new bull market. The S&P 500 (SPX) is not quite there.

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?

We have written about the heavily concentrated weighted indices as well as exchange traded funds (ETFs), but less about what comprises ETFs -- especially for the 11 sectors of the S&P 500. One of the most-egregious holdings group is in the Consumer Discretionary (XLY) sector. (And by the way, because of its holdings, XLY was the only sector to hit a bear-market low on Tuesday, despite the fact that consumer seems to be in pretty good economic shape).

As bad as the stock market has been in 2022 and considering the amount of coin that investors have given back after the spectacular ride from March 2020 until late 2021/early 2022, the average stock hasn't seen too much damage. Sadly, the average stock also is small and has little weight in the indices.

On Friday morning, investors will be focused on the Labor Department's October employment report. The current Reuters consensus calls for the addition of 200,000 payroll jobs, down from 263,000 in September, and a slightly higher unemployment rate of 3.6%. Stocks fell sharply on Thursday amid continued concerns about rate hikes and a potential recession, a day after Fed Chairman Powell said that rates at the end of the cycle could be higher than previously expected. The Dow fell 0.46%, the S&P 1.06%, and the Nasdaq 1.73%. Crude oil fell more than 2% to $88 per barrel, while gold fell $18 to $1632 per ounce.

Stocks were mixed on Tuesday morning as investors weighed a new round of earnings reports, including strong results from Uber. The ride-hailing service reported better-than-expected revenue and its first quarter of positive free cash flow, sending the shares up 17%. On the negative side, Caterpillar shares fell more than 3% after the company posted mixed results and warned of lower construction equipment sales in China. The Dow fell 0.3%, the S&P rose 0.1%, and the Nasdaq rose 0.6%. Crude oil traded near $95 per barrel, while gold rose $8 to $1795 per ounce.

The major indices turned on the afterburners in July following a difficult June. The S&P 500 soared 9%, regaining all its losses from June. The Nasdaq and the Nasdaq 100 both exploded over 12%, recapturing their June declines and then some. The S&P MidCap 400 and the Russell 2000 rocketed almost 11%. It was the largest 20-day rate-of-change (ROC) for the "500," the "400," and the "2000" since late 2020/early 2021. The Nasdaq and the QQQs saw a better 20-day ROC in early April, which, as we now know, was a bear-market rally.

In the stock market, the fear of upcoming news is often far worse than the news itself. We have important days just ahead, starting with June CPI today and June PPI on Thursday. We also have the start of Q2 EPS season, which kicks off this week with some important Financials reporting and moves to major Technology companies reporting toward the end of July. Many are still worried about inflation, despite some clear evidence of very weak commodity prices and a weakening economy. As well, many believe EPS estimates for the next few quarters are far too high. Technicians don't make predictions in those areas, but have some good advice. Ignore the numbers, but watch the reaction to the numbers.

Stocks rose on Tuesday morning as investors weighed new earnings reports and looked ahead to the Fed's policy statement on Wednesday. Pfizer shares rose after the company reported stronger-than-expected first-quarter results, though it also projected below-consensus sales for the full year, including sales of COVID medication Paxlovid. On the employment front, the Labor Department said that U.S. job openings rose to a record 11.549 million in March, up from 11.344 million in February and above the consensus estimate of 11.2 million. The Dow rose 0.7%, the S&P 0.9%, and the Nasdaq 0.4%. Crude oil traded near $104 per barrel, while gold rose $9 to $1873 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.

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 stock market finally had a winning week, though January remains deeply in the loss column. On Friday, the Dow Jones Industrial Average rallied by 565 points, or 1.7%. The S&P 500 was up 2.43%, and the Nasdaq Composite surged 3.13%. For the week, the DJIA was up 460 points, or 1.34%, the S&P 500 was up 0.77%, and even the Nasdaq Composite eked out a gain of 0.01%. Year-to-date, the Dow is down 4.36%; the S&P 500 is off 6.93%; and the Nasdaq Composite is in correction territory, down 11.96%.

In 2021, several major corporations announced that they were splitting into pieces, and we don't think the dismantling of conglomerates has run its course. Last year, industrial icon General Electric decided to split into three companies, with one focused on Aerospace, one on Healthcare, and one on Power/Energy. Pharmaceutical titan Johnson & Johnson also announced it is planning to carve off its consumer division and focus just on drugs and devices. These companies, which took generations to build, have abruptly concluded that their best growth opportunities exist for them as smaller, more-nimble, and more-focused companies. Former conglomerate United Technologies blazed this trail in 2020. UTX, now Raytheon Technologies, or RTX, is now three listed firms, with focuses on Aerospace, HVAC and Elevators. This split-up has most favored the HVAC company Carrier Global Holdings Corp. (CARR), which has risen more than 200%. The other businesses are only slightly trailing the broad market. We think investors can benefit from these transactions if they look closely at the resulting companies and focus on the balance sheet, management, and earnings transparency. Companies that potentially fit this theme for 2022 include the following.