News & Our Thinking

Weekly Investor

Weekly Investor – October 29, 2012

30 October 2012

Searching for Treats!

Market Summary:  

The major U.S. equity markets declined last week as earnings reports were less than favorable.  The S&P 500® experienced losses three out of five trading days and the Dow Jones experienced its worst one day decline in months.  While September new home sales beat expectations, news of Spain’s unemployment rate, reported at over 25%, shook investor confidence.  Additionally, the Federal Reserve reiterated its intention to keep interest rates low until mid-2015 and continue with its open ended commitment to purchase $40 billion of mortgage backed securities per month.  Investors look ahead to this week as earnings season continues and major economic reports, including October’s unemployment rate, are set to be released.  Investors will be searching for treats over tricks!

The S&P 500® closed down 1.5% for the week.  The top-performing sectors in the S&P 500® Index included Heath Care (-0.8%) and Technology (-0.9%), while bottom-performing sectors included Energy (-2.4%) and Basic Materials (-2.8%).  In the fixed-income market, the 10-year Treasury yield closed down for the week at 1.75%.

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


New Growth

CBSCBS Corporation (CBS) operates a worldwide mass media company and is headquartered in New York, New York.  Founded in 1986, CBS has operations in every field of media including broadcast television, cable television, radio, outdoor advertising, publishing, interactive media, and entertainment.

Recently, a structural change between content providers, such as CBS, and distributors, such as cable and satellite operators, has provided additional profitability for CBS. CBS now has the ability to leverage the value of its content when negotiating retransmission fees.  In addition, increased demand for online content from video distributors such as Netflix provide a new and meaningful growth source for CBS.  We expect CBS will successfully continue to generate value from its content, therefore creating favorable odds for our clients.

Top 10 Equity Holdings

Gilead Sciences Inc. 5.2%
Google, Inc. 5.1%
Lowes Cos. 4.0%
Sun Trust Banks, Inc. 3.9%
Qualcomm Inc. 3.8%
Express Scripts Holdings 3.8%
Danaher Corp. 3.7%
Ebay, Inc. 3.7%
Forest Laboratories 3.5%
CBS Corp. 3.5%

U.S. Equity Indices

Index 10/26/12 Week % Chg YTD % Chg
DJIA 13,107.2 -1.8% 7.3%
NASDAQ 2,988.0 -0.6% 14.7%
S&P 500 1,411.9 -1.5% 12.3%
Russell 1000 G 650.2 -1.1% 11.9%

U.S. Credit Rates

Index 10/26/12 10/19/12 12/30/11
3 Month T-Bill 0.1% 0.1% 0.1%
5 Year T-Note 0.8% 0.7% 2.0%
10 Year T-Note 1.7% 1.8% 3.3%
30 Year T-Bond 2.9% 2.9% 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.