Weekly Investor – July 11, 2016
Market Rally!
U.S. equity markets rallied last week and ended a holiday-shortened week in positive territory. The S&P 500 Index posted a 1.3% return for the week and is up 5.5% on a year-to-date basis. Concerns over global growth and prolonged financial turbulence from Brexit kept stocks and investors at bay on Tuesday. However, fear quickly subsided on Wednesday and stocks rallied for the remainder of the week. The Friday jobs report significantly beat expectations, which renewed suggestions that the economy is growing at a moderate pace and the Fed may revisit increasing interest rates sooner than expected. News about oil was not as promising. Oil closed the week at $45.41 a barrel, dropping 8% for the week. Looking ahead to this week, investors hope the markets continue to rally!
The S&P 500® Index was up 1.3% for the week. The top-performing sectors in the S&P 500® Index included Consumer Discretionary (2.3%) and Health Care (2.0%), while bottom-performing sectors included Telecommunications (-1.1%) and Energy (-1.1%). In the fixed-income market, the 10-year Treasury yield was down during the week, ending at 1.4%.
We continue to seek those companies possessing identifiable catalysts, and focusing on those stocks with favorable odds.
Growth Above Peer Levels
Ciena Corporation (CIEN) provides equipment, software and services that support the transport, switching, aggregation, service delivery and management of voice, video and data traffic on communications networks worldwide. CIEN was founded in 1992 and is headquartered in Hanover, Maryland.
We have added CIEN to our portfolio as digital traffic is expected to grow exponentially in the coming years. Going forward, we believe carriers, cable operators and businesses will need to sustain a level of communication infrastructure much different than was needed previously. Changes in communication for these industries translate to higher spending in order to upgrade existing networks. Within communication infrastructure, CIEN is offering a platform of products and software which allow for higher network efficiency. Thus, we believe CIEN stands to benefit from industry changes and has the potential to gain market share and sustain growth above peer levels.
Top 10 Equity Holdings
| . | |
|---|---|
| Post Holdings, Inc. | 7.1% |
| Alphabet, Inc. (Google, Inc.) | 6.5% |
| ConAgra Foods, Inc. | 4.4% |
| Baxter International, Inc. | 4.3% |
| Masco Corporation | 4.3% |
| CBS Corporation | 3.7% |
| Danaher Corp. | 3.6% |
| The Hain Celestial Group | 3.6% |
| Lowe’s Companies Inc. | 3.5% |
| Red Hat, Inc. | 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.
