News & Our Thinking

Weekly Investor

Weekly Investor – November 26, 2012

27 November 2012

Investors Give Thanks

Market Summary:  

Investors had much for which to be thankful in a holiday-shortened U.S. week.  Stock markets in the U.S. and throughout the world rose, in large part due to evidence that global growth may have bottomed.  Manufacturing data and consumer confidence in China was supportive and Europe, while in recession, delivered manufacturing data that was better than expected.  Elsewhere, Israel and Hamas reached a cease-fire agreement, which may reduce the risk of oil price swings in the near-term.  In the U.S., housing data continued to be positive as both housing starts and home prices improved.  While the market’s positive move was fueled in part by optimism around averting the Fiscal Cliff, the potential for volatility remains as the U.S. Congress will return to work in search for a solution.  Time will tell whether the holiday season will continue to provide reasons for the U.S. equity investors to give thanks.

The S&P 500® closed up 3.6% for the week.  The top-performing sectors in the S&P 500® Index included Basic Materials (4.5%) and Consumer Discretionary (4.4%), while bottom-performing sectors included Health Care (2.7%) and Utilities (-0.9%).  In the fixed-income market, the 10-year Treasury yield closed up slightly for the week at 1.7%.

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

Catalysts for Growth

EBAYeBay, Inc. (EBAY) and its subsidiaries provide online marketplaces for the sale of goods and services and online payments services, including PayPal and BillMeLater, to individuals and businesses in the United States and internationally.

Over recent years, EBAY has orchestrated a revitalization of its online auction offerings while continuing to generate impressive growth in its payment services business.  While some of the company results have been masked by the overall economic pressures, EBAY has shown improvements in several key operating metrics.  With the company’s online auction restructuring on track and a management team focused on restoring growth to the company, we are encouraged by EBAY’s progress and a strategy that has the potential to offer attractive upside to investors.

Top 10 Equity Holdings

Google, Inc. 4.9%
Lowes Cos. 4.4%
Qualcomm Inc. 4.0%
Suntrust Banks 3.8%
Danaher Corp. 3.8%
CBS Corp. 3.8%
Ebay, Inc. 3.5%
Gilead Sciences, Inc. 3.5%
Forest Laboratories 3.4%
Mastercard, Inc. 3.3%

U.S. Equity Indices

Index 11/23/12 Week % Chg YTD % Chg
DJIA 13,009.7 3.3% 6.5%
NASDAQ 2,966.9 4.0% 13.9%
S&P 500 1,409.2 3.6% 12.1%
Russell 1000 G 654.5 3.9% 12.7%

U.S. Credit Rates

Index 11/23/12 11/16/12 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 1.7% 1.6% 3.3%
30 Year T-Bond 2.8% 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.