Weekly Investor – July 12, 2010
Positive Momentum
Market Summary:
The major equity averages posted significant gains last week. Initial jobless claims were better than expected, providing investors with evidence that that the U.S. economic recovery is still on track. The IMF increased its 2010 World GDP forecast during the week, which also helped boost investor confidence. Over the next few weeks, all eyes turn to the major corporate quarterly earnings announcements. Commentary from these major corporations will hopefully give the market clarity into the operating environment for the second half of 2010.
Over the past week, top-performing sectors in the S&P 500® Index included Basic Materials (8.0%) and Financials (7.4%), while bottom-performing sectors included Telecommunications (1.8%) and Health Care (3.6%). In the fixed-income market the 10-year Treasury declined during the week with yield ending the week at 3.1%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
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UNH – Favorable Odds
UnitedHealth Group, Inc. (UNH) is best-known for its Health Care Services segment, which offers health benefit plans and administers the management of such plans for employers, employees, government agencies and for self-insured individuals. UNH also operates its OptumHealth segment, which is focused on personalized health advocacy and other health-based financial services. The company’s additional activities include pharmaceutical consulting services and pharmacy benefit management, among others.
Over the past few years, UNH and its industry peers have experienced pressure from rising health care costs and a more challenging pricing environment. As a result, profit performance has suffered. Additional worries surrounding government regulation and the overall health of the economy has resulted in UNH’s attractive valuation. With industry fundamentals showing signs of stabilization, we believe that UNH offers favorable odds for our clients.
Top 10 Equity Holdings
| Cisco Systems Inc. | 4.5% |
| Google Inc. | 4.0% |
| Newell Rubbermaid Inc. | 3.9% |
| Danaher Corp. | 3.8% |
| Starwood Hotels | 3.7% |
| MasterCard Inc. | 3.5% |
| Allergan Inc. | 3.4% |
| EMC Corp. | 3.4% |
| Intel Corp. | 3.3% |
| Carnival Corp. | 3.2% |
U.S. Equity Indices
| Index | 07/09/10 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 10,198.0 | 5.3% | -2.2% |
| NASDAQ | 2,196.5 | 5.0% | -3.2% |
| S&P 500 | 1,077.9 | 5.4% | -3.3% |
| Russell 1000 G | 478.9 | 5.1% | -4.3% |
U.S. Credit Rates
| Index | 07/09/10 | 07/02/10 | 12/31/09 |
|---|---|---|---|
| 3 Month T-Bill | 0.2% | 0.1% | 0.1% |
| 5 Year T-Note | 1.8% | 1.8% | 2.6% |
| 10 Year T-Note | 3.1% | 3.0% | 3.8% |
| 30 Year T-Bond | 4.0% | 3.9% | 4.6% |
| Prime Rate | 3.3% | 3.3% | 3.3% |
This newsletter presents selected recommendations from portfolio managers of Argent Capital Management LLC, a registered investment advisor. Opinions reflect the portfolio manager’s judgment on the date above and are subject to change. A list of stocks recommended by Argent is available upon request. You should not assume that these recommendations are or will be profitable. In the course of it’s business, Argent’s client accounts may be buying and selling these stocks.
