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.

After very nice advances in gold (GLD), silver (SLV), and copper (CPER) from February/March until May, the metals complex cycled into extreme momentum/overbought territory on both daily and weekly timeframes and then pulled back. We have been waiting patiently over the past six to seven weeks for signs of an attractive reentry point. We also wanted to see signs that the U.S. Dollar Index (USD) was topping, as a weakening greenback generally is a favorable backdrop for the metals. All three broke nicely higher on Wednesday, gaining 1% to 3% and breaking their downtrends off highs from the second half of May. At the same time, the dollar has dropped the past three trading days and traced out a lower high, but remains in an uptrend off the late-December lows. We had mentioned that the USD COT data recently deteriorated after being dollar bullish since late last year. GLD held in the best during the pullback, and has traded in a sideways consolidation, while SLV and CPER were hit harder. GLD didn't retrace even a minor 38.2% of its rally from mid-February and never was near daily oversold territory. A range break above $225 could send GLD up to $240 or more, and eventually a lot higher based on the massive base from 2011 until early 2024. SLV retraced 38.2% of its rally and held key trendline support off the secondary low in March. A break over $29/$30 would open the door for a possible jump to the mid- to high-$30s region. CPER generally is a wildcard (and one that is highly volatile), but a break over $31 could also lead to a move to the mid- to high-$30s region. (Mark Arbeter, CMT)

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The Federal Reserve wrapped up its latest Open Market Committee meeting yesterday and, as expected, held the federal funds rate steady at 5.25%-5.50%. The rate remains at its highest level since 2000 and is above the long-term average of 4.4%. This is the Fed's plan: keep rates high to push inflation lower. In the meantime, inflation has indeed been on a downward trek. The latest CPI reading was 3.3%, down from 9.1% in July 2022, and the latest core PCE Price Index reading (the Fed's favorite metric) was 2.8%. Yet despite progress, both measures are still well above the Fed's target of 2.0%, and the slope of the downward trajectory has flattened lately. Those are potential problems for a central bank that watched while inflation got out of hand in 2020-2021 and wants to rebuild its reputation as an effective inflation fighter. Here are our key takeaways from the Fed meeting, the follow-up press conference, and the release of the central bank's Summary Economic Projections, commonly referred to as "the dot plot." 1) The median projection for federal funds rate cuts this year is now one, versus the prior forecast for three -- a big move in a hawkish direction. 2) The Fed appears to be trying to balance the positive impact of a restrictive policy on inflation versus the negative impact on low- and moderate-income earners. 3) The shelter component of the inflation readings remains the major problem, though the rate of shelter price increases has slowed. We still think that two cuts is the right number for the Federal Reserve in 2024 and then two more in 2025. We reckon the central bank wants to cut rates in order to save face after previous projections and also get one cut in prior to the presidential election.