ESG (Environmental, Social, Governance) investing continues to grow. BlackRock CEO Lawrence Fink, who oversees approximately $9 trillion in assets, announced in January 2020 that his firm would be investing in companies that are making progress on sustainability. He doubled down in his January 2021 letter, calling on company managements to disclose their plans for making their businesses "compatible with a net-zero economy" by 2050. As assets have flowed in over the past 40 years, Sustainable Impact Investing has evolved. The discipline, originally known as Socially Responsible Investing, focused at first on excluding companies that conducted business in South Africa, or participated in industries such as tobacco, alcohol, and firearms. Performance of these initial strategies lagged, and the approach has been modified. Now, instead of merely identifying industries to avoid, the discipline promotes "sustainable" business practices across all industries that can have an "impact" on global issues such as climate, hunger, poverty, disease, shelter, and workers' rights. At Argus Research, we track ESG developments at specific companies as part of our Management analysis - one of the six points in our proprietary Six-Point Fundamental Approach. In addition to reviewing and measuring the ESG proclamations from the companies under coverage, we partner with an ESG research firm, the JUST Capital Foundation, and leverage its analysis and insights on the topic as well. JUST Capital's mission is to drive measurable corporate change to create a stakeholder-centric, inclusive form of capitalism that reflects the priorities of the American public. JUST utilizes a combination of data-driven research and strategic engagement in an attempt to shift norms and practices in corporate America and the financial markets. JUST ESG Custom Ratings rank stocks in the Russell 1000 on these criteria using a scale of 1-100. Drawing on the JUST Capital rankings, we have compiled focused lists of companies followed by Argus Research that are in position to have this type of "sustainable impact" on the environment, workplace, community, and marketplace. These firms have exemplary records not only in delivering on the bottom line, but also in improving the environment, contributing to community relations, and showing respect for their employees. We also have a Theme Model Portfolio based in part on the ESG criteria. To build the Argus U.S. ESG Model Portfolio, we applied financial concepts such as industry diversification, income generation, risk reduction, and growth at a reasonable price to our various lists. In addition, all stocks must be on the Argus BUY list. Here are the new stocks that have been added to the Argus U.S. ESG Model Portfolio.

Wednesday was another tough day for the stock market. Like Tuesday, the largest index declines yesterday were in the NYSE and the S&P SmallCap 600 (SML), which both fell 1.2%. The S&P MidCap 400 (MDY) gave back another 1.3%, and the Dow Industrials lost 1%. In the last seven days, the NYSE has dropped over 3%. In nine days, the SML is off 3.4% and the MDY is down 4%, while the DJIA has given back 4% over seven days. All four indices have broken through their 50-day averages for the first time since early/mid-April and all have given short-term sell signals by way of bearish five-day/13-day exponential moving average crossovers. Sector damage has been broad from the recent highs, with Real Estate declining over 5%, Energy dropping 4.5%, Financials and Industrials off almost 4%, Healthcare down 3.4%, Staples and the high-flying Utilities losing 3%, and Materials and Discretionary dipping 2.8%. Only Technology and Communication Services are holding near their highs. As we said late last week, market breadth has turned negative quickly after a strong period from mid-April to mid-May. NYSE breadth was a weak -2160, the second-worst reading in 2024, after a -1913 print on May 23. NYSE advancing/total issues was 21% and up volume/total volume was 16%, near the weak levels from May 23. Treasury yields have done an about-face, with the 10-year up to 4.62% from 4.32%, the fives up to 4.64% from 4.34%, and the twos back near 5%. In addition, the U.S. dollar has broken out of a bull flag. (Mark Arbeter, CMT)

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

Stock Market Looking to Get Past April's Stumble