News & Our Thinking

Weekly Investor

Weekly Investor – March 26, 2012

28 March 2012

Mixed Signals

Market Summary:  

The major U.S. equity markets remained relatively flat last week. The economic calendar was highlighted by the latest FOMC statement.  Not surprisingly, the Committee opted to keep the fed fund target rate at 0.00% to 0.25% and upheld its outlook that will most likely warrant exceptionally low levels for fed fund rates through late 2014.  Additionally,U.S. economic data was mixed but continued its positive streak.  While employment data was slightly better than expected, housing data was mixed.  With little news at home, new problems and weak economic data from the Eurozone and China dominated the markets and offset any optimism. With earnings seasons around the corner, investors will be paying close attention to messages from Corporate America.

The S&P 500® closed down 0.5% for the week.  The top-performing sectors in the S&P 500® Index included Consumer Discretionary (+0.7%) and Consumer Staples (+0.5%), while bottom-performing sectors included Energy (-3.0%) and Industrials   (+2.1%).  In the fixed-income market, the 10-year Treasury closed with little change for the week at 2.3%.

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

More Growth on the Way

BIIBBiogen Idec Inc. (BIIB) develops, manufactures and brings to market therapies for multiple sclerosis, rheumatoid arthritis and lymphoma. BIIB also has numerous products in the pipeline for treating complications such as hyponatremia. The company currently offers four products: Avonex, Rituxan, Tysabri and Fumaderm.

Upcoming catalysts that should help garner attention from investors include the expansion of its lead oncology drug, Rituxan, as well as the continued penetration of its next-generation MS drug, Tysabri.  While Wall Street remains skeptical of BIIB’s ability to deliver growth into the next decade, feedback from our Main Street contacts gives us added confidence in the company’s ability to continue delivering innovative medical treatments.

Top 10 Equity Holdings

MasterCard Inc. 4.9%
Qualcomm Inc. 4.3%
Monster Beverage 4.0%
Biogen Idec Inc. 4.0%
Jabil Circuit Inc. 3.9%
Danaher Corp. 3.9%
Google Inc. 3.8%
Gilead Sciences Inc. 3.6%
EMC Corp. 3.6%
CBS Corp. 3.3%

U.S. Equity Indices

Index 03/23/12 Week % Chg YTD % Chg
DJIA 13,080.7 -1.1% 7.1%
NASDAQ 3,067.9 0.4% 17.8%
S&P 500 1,397.1 -0.5% 11.1%
Russell 1000 G 657.6 -0.3% 13.2%

U.S. Credit Rates

Index 03/16/12 03/16/12 12/31/10
3 Month T-Bill 0.1% 0.1% 0.1%
5 Year T-Note 1.1% 1.1% 2.0%
10 Year T-Note 2.3% 2.3% 3.3%
30 Year T-Bond 3.3% 3.4% 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.