Weekly Investor – May 07, 2012
A Balancing Act
Market Summary:
The major U.S. equity averages all ended the week lower as weak economic data weighed heavily on investors. The S&P 500® Index opened up the month of May with the worst performance of the year. Economic data out of the Eurozone region was quite negative and plans to impose additional fiscal austerit concern investors. Additionally,U.S. economic data remains mixed but positive data including housing, bank loans, vehicle production and the unemployment rate helped add balance. The mixed signals have investors worried about the possibility of another growth problem similar to 2010 and 2011. In addition, with the month of May upon us, investors will see if the old axiom, “When in May, go Away” holds true.
The S&P 500® closed down -2.4% for the week. The top-performing sectors in the S&P 500® Index included Telecommunications (0.2%) and Utilities (-0.3%), while bottom-performing sectors included Materials (-3.5%) and Technology (-3.7%). In the fixed-income market, the 10-year Treasury yield declined slightly, closing out the week at 1.9%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Strong Growth Opportunities
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. | 5.2% |
| Biogen Idec Inc. | 4.5% |
| Qualcomm Inc. | 4.1% |
| Gilead Sciences Inc. | 4.0% |
| Danaher Corp. | 3.9% |
| Google Inc. | 3.6% |
| CBS Corp. | 3.5% |
| EMC Corp. | 3.5% |
| Jabil Circuit Inc. | 3.4% |
| Intel Corp. | 3.3% |
U.S. Equity Indices
| Index | 05/04/12 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 13,038.3 | -1.4% | 6.7% |
| NASDAQ | 2,9563 | -3.7% | 13.5% |
| S&P 500 | 1,369.1 | -2.4% | 11.6% |
| Russell 1000 G | 647.0 | -2.8% | 11.4% |
U.S. Credit Rates
| Index | 05/04/12 | 04/27/12 | 12/31/10 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 0.8% | 0.8% | 2.0% |
| 10 Year T-Note | 1.9% | 1.9% | 3.3% |
| 30 Year T-Bond | 3.1% | 3.1% | 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.
