Weekly Investor – January 14, 2013
Business as Usual?
Market Summary:
After a very strong first week of 2013 in which the broader U.S. equity markets gained nearly 3%, the past week was more business usual. There was no fiscal cliff drama to contend with, and earnings season kicked off with a strong report from Alcoa, a bellwether for global industrial demand. Across the pond, European Central Bank President Mario Draghi commented that European economic contraction may have bottomed, and incrementally positive economic readings continued in Asia. On the U.S. economic front, unemployment claims were slightly higher than expected and we are reminded that the debt ceiling mini-cliff looms in the future. Against this backdrop, the S&P 500® gained 0.4% last week. As fourth quarter earnings season kicks into gear, it remains to be seen whether a slow growth, improving economic environment is business as usual.
The S&P 500® closed up 0.4% for the week. The top-performing sectors in the S&P 500® Index included Health Care (2.0%) and Energy (0.8%), while bottom-performing sectors included Utilities (-1.0%) and Telecommunications (-2.0%). In the fixed-income market, the 10-year Treasury yield closed even for the week at 1.90%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Growth through Leadership
Intel Corp. (INTC) develops and manufactures semiconductor chips used in the technology and communications industries. INTC’s products, which include chips and boards, are integral components for computers, networking utilities, servers, handheld devices and additional consumer electronics. The company’s numerous products are integrated at various stages, thus allowing for advanced systems within the realm of computing and communication.
After aggressively revamping its research and development efforts, INTC regained market share from its rival, AMD. The company has also launched additional products to target high growth mobile markets including netbooks and smartphones. While INTC is certainly not immune to economic conditions and competition, we believe the company has the know-how and the resources to maintain its technology leadership position for the long-term and thus should outperform its peers and the market.
Top 10 Equity Holdings
| . | |
|---|---|
| Google, Inc. | 5.1% |
| Lowes Cos. | 4.2% |
| Danaher Corp. | 4.0% |
| Qualcomm Inc. | 3.8% |
| Allstate | 3.8% |
| CBS Corp. | 3.8% |
| Suntrust Banks | 3.7% |
| Ebay, Inc. | 3.7% |
| Forest Laboratories | 3.6% |
| Mastercard, Inc. | 3.4% |
U.S. Equity Indices
| Index | 01/11/13 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 13,488.4 | 0.4% | 2.9% |
| NASDAQ | 3,125.6 | 0.8% | 3.5% |
| S&P 500 | 1,472.1 | 0.4% | 3.2% |
| Russell 1000 G | 679.0 | 0.5% | 3.2% |
U.S. Credit Rates
| Index | 01/11/13 | 01/04/13 | 12/30/11 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 0.8% | 0.8% | 0.8% |
| 10 Year T-Note | 1.9% | 1.9% | 1.8% |
| 30 Year T-Bond | 3.0% | 3.1% | 3.0% |
| 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.
