Weekly Investor – July 09, 2012
No Fireworks
Market Summary:
The major U.S. equity markets all fell during the holiday shortened week. While the majority of the week was relatively quiet, Friday’s U.S. June jobs report was significantly less than anticipated and drove markets down. The report stated that the country had only added 80,000 of the 100,000 jobs that had been originally projected. Additionally, manufacturing and non-manufacturing PMI reports were also weaker than expected. However, there were some bright spots for the U.S. during the week which included continued improvement in housing, unemployment claims, bank loans and consumer confidence. Looking abroad, China continues to operate at depressed levels and is still in a deep declining trend, causing concern for investors. In the end, investors hoping for fireworks were disappointed and look forward to the upcoming earnings season and hope for good news 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 Staples (0.5%) and Consumer Discretionary (0.1%), while bottom-performing sectors included Financials (-1.2%) and Industrials (-1.4%). In the fixed-income market, the 10-year Treasury yield was down closing out the week at 1.5%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
A New Strategy
Lowe’s Companies, Inc. (LOW) operates as a home improvement retailer. The company offers a range of products for repair, remodeling, home decorating, and property maintenance.
LOW’s has recently implemented a new strategy that focuses on slowing store growth and improving store productivity and margins. LOW’s also plans to return capital back to investors through substantial share buyback offers. We believe the new strategy will be successful and offers an attractive risk / reward profile for our portfolio.
Top 10 Equity Holdings
| . | |
|---|---|
| MasterCard Inc. | 5.4% |
| Biogen Idec Inc. | 5.0% |
| Gilead Sciences Inc. | 4.1% |
| Danaher Corp. | 3.9% |
| Lowes Cos. | 3.7% |
| Qualcomm Inc. | 3.7% |
| Google Inc. | 3.7% |
| CBS Corp. | 3.6% |
| Apple Computer | 3.3% |
| Jabil Circuit Inc. | 3.2% |
U.S. Equity Indices
| Index | 07/06/12 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 12,772.5 | -0.8% | 4.5% |
| NASDAQ | 2,937.3 | 0.1% | 12.8% |
| S&P 500 | 1,354.7 | -0.5% | 7.7% |
| Russell 1000 G | 634.4 | 0.0% | 9.2% |
U.S. Credit Rates
| Index | 07/06/12 | 06/29/12 | 12/31/10 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 0.6% | 0.7% | 2.0% |
| 10 Year T-Note | 1.5% | 1.7% | 3.3% |
| 30 Year T-Bond | 2.7% | 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.
