Weekly Investor – July 30, 2012
All Eyes on Europe
Market Summary:
The major U.S. equity markets ended the week in positive territory despite a rough start to the week. On Monday, the S&P 500® started out down over 1% within the first minute of trading as concerns increased that Spain will need a full sovereign bailout. Adding to the mix was data suggesting that Germany is moving into recession and reports that Greece may miss key debt reduction targets. However, equities bounced back Thursday as European Central Bank President Mario Draghi pledged to use any means necessary to avoid the collapse of the Euro. On this side of the pond, positive economic data helped the week’s positive performance. Second quarter GDP and the University of Michigan’s consumer confidence survey both beat expectations while housing continued to show improvement. Once again, investors find themselves caught in a struggle between trouble abroad and better news at home.
The S&P 500® closed up 1.7% for the week. The top-performing sectors in the S&P 500® Index included Telecommunications (3.8%) and Financials (2.8%), while bottom-performing sectors included Information Technology (0.9%) and Materials (-0.8%). In the fixed-income market, the 10-year Treasury yield remained steady closing out the week at 1.5%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Long-Term Growth Enhanced by Integrated Solutions
Oracle Corp. (ORCL) is a leading provider of database software – programs that allow the storage of large amounts of information while also having the capacity to search, retrieve, sort, revise, analyze and order data, both quickly and efficiently. ORCL has completed a handful of acquisitions, which as a result has enhanced its market share and its ability to gain additional market share going forward.
With its dominate position in database management as an anchor, ORCL has successfully branched out into successive fast growing areas of technology services over the last decade. Most recently ORCL launched new products and services that enable its clients to migrate an internal IT environment into cloud computing. We believe the market currently underestimates ORCL’s growth potential over the next few years and therefore represents favorable odds for our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| MasterCard Inc. | 5.2% |
| Biogen Idec Inc. | 5.1% |
| Gilead Sciences Inc. | 4.4% |
| Qualcomm Inc. | 3.9% |
| Danaher Corp. | 3.9% |
| Google Inc. | 3.9% |
| CBS Corp. | 3.7% |
| Express Scripts Holding Co. | 3.6% |
| Lowes Cos. | 3.5% |
| Ebay, Inc. | 3.4% |
U.S. Equity Indices
| Index | 07/27/12 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 13,075.7 | 2.0% | 7.0% |
| NASDAQ | 2,958.1 | 1.1% | 13.5% |
| S&P 500 | 1,386.0 | 1.7% | 10.2% |
| Russell 1000 G | 645.8 | 1.5% | 11.2% |
U.S. Credit Rates
| Index | 07/27/12 | 07/20/12 | 12/30/11 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 0.7% | 0.6% | 2.0% |
| 10 Year T-Note | 1.6% | 1.5% | 3.3% |
| 30 Year T-Bond | 2.6% | 2.6% | 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.
