News & Our Thinking

Weekly Investor

Weekly Investor – October 10, 2011

18 November 2011

Equity Markets Up for the Week

Market Summary:  

Investors looked past their concerns of a possible Greek default and downgrades by analysts at Fitch, one of the three large bond rating agencies, on Italian and Spanish debt and instead focused on the possibility that European leaders are getting serious about a plan to manage the crisis. In theU.S., the unemployment rate held steady at 9.1% and the ISM Manufacturing index report was better-than-expected. Investors took this positive news as a sign that although theU.S.economy remains slow, a recession is hopefully avoided. The equity rally began on Tuesday and was impressive as the S&P 500® Index climbed out of a hole that was 20% below the May peak and avoided staying in what many market watchers consider bear market territory.

The S&P 500® closed up 2.1% for the week.  The top-performing sectors in the S&P 500® Index included Basic Materials (+6.2%) and Consumer Discretionary (+4.1%), while bottom-performing sectors included Telecommunications (-1.4%) and Utilities (-0.8%).  In the fixed-income market, the 10-year Treasury lost ground with the yield ending the week at 2.1%.

We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.

Storing Data and Profit

EMC Corp. (EMC) develops solutions for the information technology industry. It provides and supports infrastructure for storing, protecting, organizing and retrieving vast amounts of data. EMC’s information management operations can be broken into three segments: storage, archiving and security. With acquisitions, EMC continues to fill out its product portfolio in order to go after more market share.

With EMC’s core market as storage, the company is well positioned to benefit from the increase in online content from sites such as those specializing in video sharing.  Management is aligned to improve market share while ensuring that current business avenues continue to be successful. At Argent, we view EMC as having favorable odds for our clients.

Top 10 Equity Holdings

MasterCard Inc. 4.5%
Biogen Idec Inc. 4.1%
Qualcomm Inc. 4.0%
Google Inc. 3.8%
Danaher Corp. 3.8%
Gilead Sciences Inc. 3.8%
Allergan Inc. 3.7%
Hansen Natural Corp. 3.6%
Jabil Circuit 3.5%
Energizer Holdings Inc. 3.5%

U.S. Equity Indices

Index 10/07/11 Week % Chg YTD % Chg
DJIA 11,103.1 1.7% -4.1%
NASDAQ 2,479.7 2.6% -6.5%
S&P 500 1,155.5 2.1% -8.1%
Russell 1000 G 540.3 2.5% -6.0%

U.S. Credit Rates

Index 10/07/11 09/30/11 12/31/10
3 Month T-Bill 0.1% 0.1% 0.1%
5 Year T-Note 1.1% 0.9% 2.0%
10 Year T-Note 2.1% 1.8% 3.3%
30 Year T-Bond 3.0% 2.8% 4.3%
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.