Weekly Investor – June 17, 2019
Eyes on the Fed
Stocks rose last week, buoyed by a trade deal between the U.S. and Mexico that averted tariffs being placed on Mexican imports. Economic data was
mostly positive for the week, as retail sales advanced 0.5% in May and April’s number was revised higher. In addition, industrial production surprised to the upside, with growth of 0.4%.
In stock news, Broadcom, a semiconductor manufacturer, slumped after reporting disappointing guidance, citing the current trade dispute between the
U.S. and China. Other semiconductor stocks sold-off in sympathy. In merger news, United Technologies and Raytheon announced a merger of equals, creating an industrial powerhouse with $74 billion of pro-forma revenue. Salesforce.com announced the acquisition of Tableau Software, a leader in data analytics and visualization, for around $15 billion.
Looking ahead, investors will focus on the Fed’s meeting this week as the market is now pricing an interest rate cut before the end of the year. Additionally, headlines around trade and increased geo-political tensions between the U.S. and Iran over the recently damaged tankers will be at the forefront of traders’ minds.
The S&P 500® Index was up 0.5% for the week. Its top-performing sectors were Consumer Discretionary (2.4%) and Communication Services (1.4%), while bottom-performing sectors were Industrials (-0.4%) and Energy (-0.5%). In the fixed-income market, the 10-year Treasury yield was even, ending at 2.1%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
E-Trade Financial Corporation (ETFC) is a New York-based financial services company that provides online brokerage products and services primarily to
individual investors.
Since 2013, E-Trade has been able to achieve growth in accounts and assets while decreasing the size of its troubled legacy home equity loan portfolio. In
October 2016, dissatisfied with the company’s growth rate, E-Trade’s board removed and replaced its CEO. At the same time, the board gave the company a mandate to grow faster. While E-Trade has made some progress in realizing the board’s growth goals, more work remains. We believe the change going on in the company and the consolidations in E-Trade’s industry create a positive backdrop for the stock — and for our clients.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet Inc. (Google) | 7.1% |
| Post Holdings, Inc. | 5.5% |
| Mastercard, Inc. | 5.4% |
| Marvell Technology Group | 4.8% |
| First Data Corporation | 4.5% |
Small Cap Core
| Planet Fitness, Inc. | 3.1% |
| Upland Software Inc. | 3.0% |
| Fortinet Inc. | 2.7% |
| Wintrust Financial | 2.7% |
| Gray Television Inc. | 2.3% |
Dividend Select
| JPMorgan Chase & Co. | 5.6% |
| Microsoft Corp. | 4.3% |
| Marvell Technology Group | 4.2% |
| Pfizer Inc. | 4.2% |
| Target Corporation | 4.2% |
Mid Cap
| Cintas Corporation | 3.8% |
| CDW Corporation | 3.7% |
| NVR Inc. | 3.3% |
| Worldpay Inc. | 3.1% |
| Ciena Corporation | 3.1% |
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.
