News & Our Thinking

Weekly Investor

Weekly Investor – July 9, 2018

02 July 2018

S&P 500 Edges Up for the Week

Domestic equities regained some ground after two weeks of downward pressure. The S&P 500® Index returned just over 1.5% last week, bolstered by strong performance in its largest sector, Technology.

The S&P 500 has now returned 4.3% for the year, lagging behind its smaller peers. Some of the outperformance from mid- and small-cap stocks could be because smaller names tend to have more domestic sales, insulating them from escalating trade risks internationally.

The U.S. trade war continues to draw interest from a global and domestic perspective. Last week, tariffs took effect on the initial $34 billion in Chinese imports, which President Donald Trump announced back in April. Toward the end of last week, Trump warned he might expand tariffs on every Chinese import.

In economic news, the June unemployment number rose from an 18-year low (3.8% to 4%), but wage gains unexpectedly slowed, indicating the market continues to absorb excess capacity. Looking ahead to next week, earnings reports from some of the largest banks will be in focus, with JPMorgan Chase, Wells Fargo and Citigroup reporting at the end of next week.

The S&P 500 was up 1.5% for the week. Its top-performing sectors included Health Care (3.1%) and Telecommunications (2.4%), while bottom-performing sectors included Financials (0.3%) and Energy (-0.3%). In the fixed-income market, the 10-year Treasury yield was down slightly, ending at 2.8%.

We continue to seek companies that reflect our Change BasedSM Investing approach.

MasterCard: On the Upswing

Founded in 1966, MasterCard Inc. (MA) provides technology to enable electronic payments for individual consumers, financial institutions, merchants, governments and businesses worldwide. MasterCard’s brands include MasterCard, Maestro and Cirrus.

MasterCard is well-positioned to benefit from the continuing change in payment from cash and checks to electronic transactions. The company has a solid track record of being a technology leader in its industry, consistently delivering growth above its peers. We believe the growth prospects for the company and the change in payments globally make MasterCard a fit for Argent’s Change BasedSM Investing approach.

 Top 5 Equity Holdings

Large Cap Growth

Alphabet Inc. 7.6%
Baxter International 5.0%
Marvell Technology 4.4%
Mastercard Inc. 4.2%
Fortive Corporation 3.9%

Small Cap Core

Fortinet Inc. 3.2%
Wintrust Financial 2.9%
Mastec Inc. 2.5%
Merit Medical Systems 2.3%
Abraxas Petroleum Corp. . 2.2%

Dividend Select

JP Morgan Chase & Co. 5.4%
Occidental Petroleum 4.7%
ConocoPhillips 4.3%
Marvell Technology Group 3.9%
Las Vegas Sands Corp. 3.7%

Mid Cap 

NVIDIA Corporation 3.3%
Cintas Corporation 3.2%
NetApp Inc. 3.1%
CDW Corporation 3.0%
NVR Inc. 3.0%

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.