News & Our Thinking

Weekly Investor

Weekly Investor – May 14, 2018

14 May 2018

S&P Posts Big Gain

The S&P 500® Index posted its first weekly gain in the past three weeks, with a 2.4% return and the best weekly gain over the past two months. Investors are more confident that inflation will remain at bay after global trade tensions have eased.

The U.S. dollar exhibited a calmer week, as it was little changed, while the 10-year Treasury steadied under 3%. Volatility is still present in other markets, with oil bouncing off highs not reached since the end of 2014. In turn, energy stocks traded higher to post the best weekly gain in the S&P 500. The gains in oil were spurred by President Trump’s decision to quit the Iran nuclear deal.

A bullish feeling fell over the market this week after a plethora of U.S. companies posted quarterly results that beat analyst estimates. The sentiment emanated from executives’ less cautious feelings concerning inflation, rising global interest rates and trade wars with foreign countries – specifically China. Emerging stocks also rallied around the news of a June 12 meeting between Kim Jong Un and Trump in Singapore.

The S&P 500 was up 2.4% for the week. Its top-performing sectors included Energy (3.8%) and Financials (3.6%), while bottom-performing sectors included Utilities (-2.3%) and Consumer Staples (-5.0%). In the fixed-income market, the 10-year Treasury yield was steady for the week, ending at nearly 3%.

We continue to seek companies that reflect our Change Based InvestingSM approach.

Facebook: Social Media Leader

Facebook Inc. (FB) provides social networking products for mobile devices, personal computers and other electronic devices worldwide. Its solutions include the Facebook website and app, Instagram and WhatsApp Messenger. FB was founded in 2004 in Menlo Park, California.

With 2.2 billion active users, FB has established itself as the undisputed leader in social media. From dorm room startup to becoming one of the largest companies in the world, FB’s rapid rise has brought much praise over the years. As of late, however, criticism of the company has been more prominent, reaching a boiling point when Cambridge Analytica was discovered to have gathered and exploited user data from FB. The breach culimated in two days of testimony on Capitol Hill by FB founder Mark Zuckerberg. Overall, the news of compromised user information and Zuckerberg’s testimony did little to change FB user behavior. New users continue to subscribe at a rapid pace and advertisers continue to bid up the prices they’re willing to pay for ads. While it’s impossible to know the impact of future regulations on FB’s business model, we believe its growth prospects remain strong and the company’s stock continues to be a favorable choice for our clients.

 Top 5 Equity Holdings

Large Cap Growth

Alphabet Inc. 7.4%
Red Hat Inc. 5.8%
Baxter International 4.8%
Marvell Technology 4.3%
JP Morgan Chase & Co. 4.2%

Small Cap Core

Wintrust Financial 3.2%
Fortinet Inc. 3.0%
Lumentum Holdings Inc. 2.4%
Mastec Inc. 2.3%
Merit Medical Systems 2.3%

Dividend Select

JP Morgan Chase & Co. 5.8%
Occidental Petroleum 4.7%
ConocoPhillips 4.3%
Las Vegas Sands Corp. 4.0%
Marvell Technology Group 3.8%

Mid Cap 

NVIDIA Corporation 3.4%
Cintas Corporation 3.1%
NVR Inc. 3.1%
E*Trade Financial Corp. 2.9%
NetApp Inc. 2.9%

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.