Weekly Investor – October 14, 2013
Debt Deal?
Market Summary:
U.S. equity markets ended the week higher as lawmakers worked towards reaching an agreement to raise the debt ceiling thereby avoiding a credit default. In fact, the S&P 500® Index jumped 2.2% on Thursday after a House Republican proposal for a short-term increase gave investors hope of a debt deal. Economic news was light for the week as the government shutdown remains in effect, delaying many key data points. Janet Yellen was officially nominated to replace Ben Bernanke as Chairman of the Federal Reserve when his term ends in January. Additionally, earnings season began with mixed results. This week, investors will weigh any news from Washington as the October 17 debt deadline approaches.
The S&P 500® was up 0.8% for the week. The top-performing sectors in the S&P 500® Index included Utilities (2.6%) and Consumer Staples (1.7%), while bottom-performing sectors included Basic Materials (0.0%) and Consumer Discretionary (-0.4%). In the fixed-income market, the 10-year Treasury yield was up during the week, ending at 2.7%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Favorable Odds
Oracle Corp. (ORCL) is a leading provider of database software – programs that allow the storage of large amounts of information while also having the capacity to search, retrieve, sort, revise, analyze and order data, both quickly and efficiently. ORCL has completed a handful of acquisitions, which as a result has enhanced its market share and its ability to gain additional market share going forward.
With its dominate position in database management as an anchor, ORCL has successfully branched out into successive fast growing areas of technology services over the last decade. Most recently ORCL launched new products and services that enable its clients to migrate an internal IT environment into cloud computing. We believe the market currently underestimates ORCL’s growth potential over the next few years and therefore represents favorable odds for our clients
Top 10 Equity Holdings
| . | |
|---|---|
| Google, Inc. | 5.3% |
| Lowes Cos | 5.1% |
| CBS Corp. | 4.9% |
| Gilead Sciences | 4.7% |
| Danaher Corp | 4.1% |
| MasterCard, Inc. | 3.9% |
| SunTrust Banks | 3.9% |
| Amgen Inc. | 3.8% |
| Forest Laboratories | 3.6% |
| Schlumberger LTD | 3.5% |
U.S. Equity Indices
| Index | 10/14/13 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 15,237.1 | 1.1% | 16.3% |
| NASDAQ | 3,791.9 | -0.4% | 25.6% |
| S&P 500 | 1,703.2 | 0.8% | 19.4% |
| Russell 1000 G | 791.3 | 0.1% | 20.2% |
U.S. Credit Rates
| Index | 10/14/13 | 10/04/13 | 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 | 2.7% | 2.6% | 1.8% |
| 30 Year T-Bond | 3.7% | 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.
