Weekly Investor – June 18, 2012
A Holding Pattern
Market Summary:
The major U.S. equity averages all remained positive this past week despite disappointing economic news from around the world. Headlines were mostly dominated by the Greek elections and Moody’s downgrade of Spain’s credit rating. Moving stateside, the U.S. reported disappointing retail sales for the month of May and the University of Michigan consumer sentiment index fell significantly. Although global growth is the weakest it’s been since the recovery began, prospects for economic stimulus are maintaining the markets and leaving investors in a holding pattern.
The S&P 500® closed up 1.3% for the week. The top-performing sectors in the S&P 500® Index included Telecommunications (3.1%) and Energy (2.5%), while bottom-performing sectors included Consumer Discretionary (0.4%) and Technology (0.3%). In the fixed-income market, the 10-year Treasury yield closed out the week unchanged at 1.6%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
A Technology Leader
Intel Corp. (INTC) develops and manufactures semiconductor chips to be used in the technology and communications industries. INTC’s products, which include chips and boards, are integral components for computers, networking utilities, servers, handheld devices and additional consumer electronics. The company’s numerous products are integrated at various stages, thus allowing for advanced systems within the realm of computing and communication.
After aggressively revamping its research and development efforts, INTC regained market share from its rival, AMD. The company has also launched additional products to target high growth mobile markets including netbooks and smartphones. While INTC is certainly not immune to the economic downturn, we believe the company has the know-how and the resources to maintain its technology leadership position for the long-term and thus should outperform its peers and the market.
Top 10 Equity Holdings
| . | |
|---|---|
| MasterCard Inc. | 5.3% |
| Biogen Idec Inc. | 4.9% |
| Gilead Sciences Inc. | 4.1% |
| Danaher Corp. | 4.1% |
| Qualcomm Inc. | 3.8% |
| Google Inc. | 3.6% |
| CBS Corp. | 3.6% |
| Intel Corp. | 3.4% |
| EMC Corp. | 3.2% |
| eBay Inc. | 3.2% |
U.S. Equity Indices
| Index | 06/15/12 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 12,767.2 | 1.7% | 4.5% |
| NASDAQ | 2,872.8 | 0.5% | 10.3% |
| S&P 500 | 1,342.8 | 1.3% | 6.8% |
| Russell 1000 G | 627.7 | 0.7% | 8.1% |
U.S. Credit Rates
| Index | 06/15/12 | 06/08/12 | 12/31/10 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 0.7% | 0.7% | 2.0% |
| 10 Year T-Note | 1.6% | 1.6% | 3.3% |
| 30 Year T-Bond | 2.7% | 2.7% | 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.
