Weekly Investor – December 16, 2013
Taper Talk Strikes Again!
Market Summary:
U.S. equity markets pulled back last week and the S&P 500® Index posted a negative return for the first time in nine weeks. Of course, the equity markets have had a strong run and the S&P 500® has gained approximately 27% year-to-date. The week began with investors searching for clues on the future of the Fed’s monetary policy and Wednesday was the worst performing day of the week as speculation of tapering within the next few months increased investor concern. Stocks declined further on Thursday as U.S. initial jobless claims were much higher than expected. Finally, the House of Representatives passed its first U.S. budget in four years, aiming to avert another government shutdown. The House budget plan, which should ease some of the sequester cuts and provide stability to the financial system, should be addressed by the Senate this week. Going forward, investors hope for happy news from Corporate America as they prepare for the New Year.
The S&P 500® was down 1.6% for the week. The top-performing sectors in the S&P 500® Index included Basic Materials (-0.7%) and Industrials (-1.1%), while bottom-performing sectors included Telecommunications (-2.4%) and Health Care (-2.6%). In the fixed-income market, the 10-year Treasury yield was even during the week, ending at 2.9%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Positive Change
Amgen Inc. (AMGN) is a biotechnology company that engages in the discovery, development, manufacture, and marketing of human therapeutic products in the areas of cancer care, inflammation, nephrology, and bone diseases primarily in the United States, Europe, and Canada. AMGN was founded in 1980 and is headquartered in Thousand Oaks, CA.
AMGN has a new management team focused on implementing change across the organization, specifically within its research and development department. Additionally, positive data point feedback regarding the stability of AMGN’s base biotechnology business offers the potential for positive surprise as the company’s pipeline matures. We feel AMGN’s attractive valuation and positive change stemming from increased efficiency measures offer favorable odds to our clients.
Top 10 Equity Holdings
| . | |
|---|---|
| Google, Inc. | 6.1% |
| CBS Corp. | 4.8% |
| Lowes Cos. | 4.6% |
| Forest Laboratories | 4.4% |
| MasterCard, Inc. | 4.2% |
| Danaher Corp. | 4.1% |
| Endo Health Solutions | 4.0% |
| SunTrust Banks | 3.8% |
| Amgen Inc. | 3.6% |
| Qualcomm Inc. | 3.6% |
U.S. Equity Indices
| Index | 12/13/13 | Week % Chg | YTD % Chg |
|---|---|---|---|
| DJIA | 15,755.4 | -1.7% | 20.2% |
| NASDAQ | 4,001.0 | -1.5% | 32.5% |
| S&P 500 | 1,775.3 | -1.6% | 24.5% |
| Russell 1000 G | 828.0 | -1.5% | 25.8% |
U.S. Credit Rates
| Index | 12/16/13 | 12/06/13 | 12/31/12 |
|---|---|---|---|
| 3 Month T-Bill | 0.1% | 0.1% | 0.1% |
| 5 Year T-Note | 1.5% | 1.5% | 0.8% |
| 10 Year T-Note | 2.9% | 2.9% | 1.8% |
| 30 Year T-Bond | 3.9% | 3.9% | 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.
