Trade War Progress

Last week, the S&P 500® Index had its first and only down week in June, declining 0.3%. The index finished with a 7.1% return in June, the second-best month in 2019. Year-to-date the S&P 500 has returned 18.5%, marking its best opening six-month performance since 1997. The market continues to keep a close eye on the United States and China trade conflict. On Saturday, President Trump and China’s President Xi had their meeting on the sidelines of the G-20 meeting. Although a deal did not close, they agreed to a cease fire in the trade war.

In stock news, though the health care sector was a laggard, Allergen PLC, a specialty pharmaceutical company best known for their Botox product, was the week’s best performing stock in the S&P 500, climbing almost 28%. The stock soared over 25% on Tuesday after the news that a takeover deal was reached. AbbVie Inc., the acquiring company, declined 7.7% last week. Micron Technology Inc., a memory chip producer, advanced 16.1% last week on their better than expected earnings announcement and continued growth in global demand for semiconductors. Other semiconductor stocks, such as NVIDIA Corp and Western Digital Corp, also rallied on the announcement as chip demand has been affected by the trade dispute with China.

The S&P 500® Index was down 0.3% for the week. Its top-performing sectors were Basic Materials (1.5%) and Financials (1.5%), while bottom-performing sectors were Utilities (-2.1%) and Real Estate (-2.7%). In the fixed-income market, the 10-year Treasury yield was down, ending at 2.0%.

We continue to seek companies that reflect our Change-Based^SM investment approach.

Change Based Investment

First Data Corporation (FDC), headquartered in Atlanta, Georgia, is a global leader in e-commerce technology. The company processes almost 50% of all U.S. credit and debit transactions, including handling pre-paid gift cards.

Although First Data has struggled to turn itself around in the past, the company is realizing success, thanks in part to the efforts of CEO Frank Bisignano (former executive at JPMorgan Chase), who joined the company in 2013. First Data has reported positive sales growth, particularly within its Global Business Solutions segment. In January of 2019, First Data announced that it will merge with Fiserv to create one of the world’s leading payments and financial technology providers. The merger is expected to close in the second half of 2019. The merger will provide clients an expanded set of solutions, as well as cost savings and revenue synergies. For these reasons, we believe the combined company will offer upside potential for our clients.

Top 5 Equity Holdings

Large Cap Growth