Uncertainty over the war in Iran and ensuing high oil prices threatened to knock stocks into a bear market this past spring. While growth stocks suffered the most, value stocks also declined. Even bond prices were volatile amid the confusion. Stocks have since recovered and the bull market that began in 2022 remains intact. But inflation is still an issue -- and the Federal Reserve is now expected to hike rates, not lower them. Is a correction in the offing, given the high level of stock prices? Taking into account all the variables, is it time for investors to cash in their chips? As the market fluctuates between bull and bear, we note that investors exit equities at their own peril. 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 periods.

Fastenal Co. sells industrial and construction supplies. It classifies its offerings into four primary categories (fasteners, safety supplies, cutting tool and other) sold at approximately 1,600 stores and 1,800 onsite locations, as well as through vending machines at customer locations and through e-commerce channels. Most of the company's customers are in the manufacturing and nonresidential construction markets. Headquartered in Winona, MN, the company has over 20,000 employees and its shares are a component of the S&P 500. INDUSTRIAL Our rating on the Industrial sector is Over-Weight. The sector accounted for 8.9% of the S&P 500 as of the end of June. The recent surge in energy prices likely will drive increased domestic oil and gas production, benefiting Industrial companies that serve the oil patch. The worsening geopolitical situation in the Middle East also is likely to drive growth in aerospace/defense companies. The sector has outperformed the market year to date with a gain of 19.5% as of the end of June. The sector outperformed in 2025, with a gain of 17.7%, compared to a gain of 16.4% for the S&P 500. The beta for the sector is 1.1. Over the past five years, the sector's weighting has ranged from 8% to 12%. The sector's P/E ratio on projected 2027 EPS was 24, above the market multiple. The yield of 0.8% was below the market average. The sector's smoothed earnings growth rate of 8% was below the market average. The Industrial sector is primarily a cyclical sector. The macroeconomic factors that may affect the performance of stocks in the Industrial sector include Interest Rates, New Housing Starts, Data Center Growth, Trade Policy, and U.S. Government Defense Spending. Trends in the dollar can affect factors such as Cost of Goods Sold. Potential sell signals for stocks in the Industrial sector can be a change in the direction or rate of a company's sales or earnings growth, a high dividend payout ratio above 70%, a rapidly rising unemployment rate or signs of an impending recession. At this stage of the market and economic cycle, our favored industries within the Industrial sector include Aerospace & Defense, Building Products, and Electrical Components & Equipment.

The major indices closed lower on Thursday. Tech stocks remain under pressure, often because of growing fears about spending on AI. Meanwhile, earnings reports continue to hit the tape, driving results in individual names; tension in the Middle East shows no sign of decreasing; and recent inflation data has been benign. That's a busy newsflow.

Fastenal began as an industrial retailer, expanding its product portfolio from nuts and bolts to cutting tools, safety equipment, and janitorial supplies. It transitioned into a distributor by building out a dense network of branches close to its business customers. Once a customer becomes large enough, Fastenal installs vending machines and its own personnel on-site. Today, these on-site locations exceed Fastenal’s branch count and remain the firm’s main focus for expansion. Fastenal acts as a one-stop outsourcing partner for its industrial customers, offering value-added services along with a wide breadth of maintenance, repair, and operations supplies.