News & Our Thinking

Weekly Investor

Weekly Investor – June 3, 2013

03 June 2013

A Mixed Week

Market Summary:  

The U.S. equity markets ended the holiday shortened week down.  In fact, the S&P 500® Index posted its second worst week of the year.  However, the index still posted a positive 2.34% return for the month of May.  Tuesday started out strong upon the news of increased consumer confidence and rising home prices.  Wednesday opened down and continued to slide, erasing the previous day’s gains.  Thursday’s higher than expected jobless numbers and the expectation that central bank stimulus measures would continue pushed markets higher.  Friday witnessed a decline as speculation over lower bond purchases by the Fed worried investors.   Going forward, investors hope for a more stable week and once again pay close attention to any action by the Fed.

The S&P 500® was down 1.1% for the week.  The top-performing sectors in the S&P 500® Index included Technology (0.6%) and Financials (0.5%), while bottom-performing sectors included Consumer Staples (-4.0%) and Telecommunications (-5.0%). In the fixed-income market, the 10-year Treasury yield closed slightly up for the week at 2.1%.

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

Favorable Odds

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

Google, Inc. 5.5%
Lowes Co. 4.6%
CBS Corp. 4.5%
Gilead Sciences 4.3%
Allstate 3.9%
SunTrust Banks 3.9%
Danaher Corp. 3.8%
Forest Laboratories 3.5%
Qualcomm Inc. 3.4%
Oracle Corp. 3.4%

U.S. Equity Indices

Index 05/31/13 Week % Chg YTD % Chg
DJIA 15,115.6 -1.2% 15.3%
NASDAQ 3,455.9 -0.1% 14.6%
S&P 500 1,630.7 -1.1% 14.3%
Russell 1000 G 744.6 -1.2% 13.1%

U.S. Credit Rates

Index 05/31/13 05/24/13 12/31/12
3 Month T-Bill 0.1% 0.1% 0.1%
5 Year T-Note 1.0% 0.9% 0.8%
10 Year T-Note 2.1% 2.0% 1.8%
30 Year T-Bond 3.3% 3.2% 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.