News & Our Thinking

Weekly Investor

Weekly Investor – July 29, 2013

31 July 2013

Earnings Season Continues…

Market Summary:  

The U.S. equity markets all closed fairly flat last week against mixed economic data and earnings reports.  The S&P 500® Index hit an all-time closing price early in the week but gave back the majority of gains throughout the remainder of the week.  Disappointing existing homes sales concerned investors although new home sales rose to their highest level since 2008.   Additionally, U.S initial jobless claims increased to from the previous week, while the Michigan consumer confidence report showed consumer sentiment climbing to an all-time high in July.   Finally, several companies reported earnings with mixed results.  Investors look forward to more earnings reports this week and hope for positive signs from Corporate America.

The S&P 500® was even for the week.  The top-performing sectors in the S&P 500® Index included Health Care (1.1%) and Technology (0.9%), while bottom-performing sectors included Energy (-0.8%) and Industrials (-1.0%). In the fixed-income market, the 10-year Treasury yield was up during the week, ending at 2.6%.

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

Growth Opportunities

ETNFounded in 1916, Eaton Corp. (ETN) is a leading diversified industrial manufacturer of fluid power systems, electrical control products, automotive systems and medium to heavy truck transmissions.

ETN is exposed to relatively strong end markets despite current economic conditions and therefore remains relatively uninterrupted by global economic headwinds.  Over the last decade, ETN’s management successfully transitioned its business from a primarily auto and truck component supplier to a manufacturer of high-technology power and fluid systems.  These products have enabled the company to benefit from secular trends such as the transition into “cloud” computing via the internet and the need for greater automotive fuel technology.  As the economy and market’s expectations improve, we believe ETN is well positioned to further capitalize on growth opportunities, representing favorable odds for our clients.

Top 10 Equity Holdings

Google, Inc. 5.4%
Gilead Sciences 4.7%
CBS Corp. 4.6%
Lowes Cos 4.5%
SunTrust Banks 4.0%
Danaher Corp. 3.9%
Forest Laboratories 3.7%
Post Holdings Inc. 3.5%
MasterCard, Inc. 3.4%
Qualcomm Inc. 3.4%

U.S. Equity Indices

Index 07/26/13 Week % Chg YTD % Chg
DJIA 15,558.8 0.1% 18.7%
NASDAQ 3,613.2 0.7% 19.7%
S&P 500 1,691.7 0.0% 18.6%
Russell 1000 G 768.6 0.3% 16.8%

U.S. Credit Rates

Index 07/26/13 07/19/13 12/31/12
3 Month T-Bill 0.1% 0.1% 0.1%
5 Year T-Note 1.4% 1.3% 0.8%
10 Year T-Note 2.6% 2.5% 1.8%
30 Year T-Bond 3.6% 3.6% 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.