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.

AI is helping lift profits at consumer companies on multiple levels. It allows companies to better understand their customers, which can improve target marketing and customization. Companies can hone menus, goods, and services to achieve broader appeal and to reach new audiences. Consumer companies are also harnessing AI technology to help with processes, inventory control, and supply-chain management, and in many other ways. By way of examples, restaurants are using smart robots to take orders, and prep and serve food. They also have front and back offices, and AI is helping make both more efficient and cost effective. As well, consumer companies utilize a lot of data, and AI helps elevate the use of that data. We recently concluded our five-part webinar series on AI, looking at how different industries are using AI. Our final event spotlighted consumer companies. For this week's list, we offer details on the BUY-rated stocks we highlighted during the webinar.

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.

On Friday, the Bureau of Labor Statistics (BLS) will report the May unemployment rate, which we think remained healthy, near 4.3%. Evidence suggests layoffs are contained. Hiring appears to have picked up in recent weeks, but we believe that "low hire, low fire" remains a fair summary of the employment situation. We estimate that non-farm payrolls increased by 125,000 in May, while the consensus is 85,000. The weekly ADP report for private payrolls has been averaging about 35,000 a week, or 140,000 on a four-week basis. Non-farm payrolls may come in slightly below private payrolls as a result of job reductions by the federal government. The Labor Department's weekly reports on initial jobless claims suggest that actual layoffs are low. The four-week moving average of 209,000 claims is little changed from 208,000 a month prior, and far below the 300,000 that would create a warning. Hiring is less conclusive. Continuing claims, near 1.8 million, remain below a warning point of 2.5 million. The Labor Market Differential is the percentage of consumers in the Conference Board's consumer confidence survey who said jobs were "plentiful" minus the percentage who said jobs were "hard to get." The spread in May was soft at 6.9%, but not extreme. Based on the advance release of the Chicago Fed Labor Market Indicators, there is a 28% probability that the May unemployment rate will remain at 4.3%, a 23.8% probability it will rise to 4.4%, and an 18.1% probability it will fall to 4.2%. The indicator of the "layoffs and other separations" rate is little changed from April 2026 and May 2025. The estimate of the hiring rate for unemployed workers improved from April and nearly matches the prior-year level. One concern is year-over-year average hourly earnings, which we expect to be up 3.5% in May, below the 3.8% PCE inflation rate in April and our expectation for 4% inflation in May. Wages growing slower than inflation and the savings rate falling to 2.6% in April show that gas inflation is weighing on consumers.