Weekly Investor – August 19, 2013
A Down Week
Market Summary:
U.S. equity markets all closed the week down and for the S&P 500® Index, this was the second straight week of negative performance. Continued economic improvement caused investors to focus on potential Fed tapering and markets slid into negative territory. In fact, all ten economic sectors posted negative performance. U.S. initial jobless claims came in at 320K, a decrease from the previous week’s number and lower than the consensus estimate of 335K. However, the Michigan Consumer Confidence Index fell over five points and witnessed its largest decline since December as worry over rising mortgage rates surfaced. This week, investors digest the last round of earnings reports and look for any signals by the Federal Reserve on continued stimulus measures or the start of tapering.
The S&P 500® was down -2.1% for the week. The top-performing sectors in the S&P 500® Index included Technology (-0.3%) and Industrials (-1.3%), while bottom-performing sectors included Consumer Discretionary (-3.3%) and Utilities (-4.4%). In the fixed-income market, the 10-year Treasury yield was up during the week, ending at 2.8%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
A Solid Base for Growth
Gilead Sciences, Inc. (GILD), a biopharmaceutical company, engages in the discovery, development, and commercialization of therapeutics for the treatment of life-threatening infectious diseases. Notably, GILD is a leader in drug development for the treatment of human immunodeficiency virus (HIV) in adults.
GILD continues to dominate the HIV market and has further strengthened its position with the launch of next generation combination pills for treatment. This strong core business provides investors a solid base for growth. GILD’s HIV franchise, coupled with the potential for blockbuster treatments in Hepatitis C and oncology within the company’s pipeline, provides additional growth avenues for years to come. With a strong core business, one of the highest potential pipelines in the biotech industry, and an attractive valuation, we feel GILD offers favorable odds for investors.
Top 10 Equity Holdings
| . | |
|---|---|
| Google, Inc. | 5.3% |
| Lowes Cos | 4.6% |
| CBS Corp. | 4.5% |
| Gilead Sciences | 4.4% |
| SunTrust Banks | 4.1% |
| Danaher Corp. | 4.0% |
| Forest Laboratories | 3.6% |
| MasterCard, Inc. | 3.6% |
| Qualcomm Inc. | 3.5% |
| Citrix Systems, Inc. | 3.5% |
U.S. Equity Indices
| Index | 08/09/13 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 15,081.5 | -2.2% | 15.1% |
| NASDAQ | 3,602.8 | -1.6% | 19.3% |
| S&P 500 | 1,655.8 | -2.1% | 16.1% |
| Russell 1000 G | 756.7 | -2.2% | 15.0% |
U.S. Credit Rates
| Index | 08/16/13 | 08/09/13 | 12/31/12 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 1.4% | 1.4% | 0.8% |
| 10 Year T-Note | 2.6% | 2.6% | 1.8% |
| 30 Year T-Bond | 3.6% | 3.7% | 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.
