Weekly Investor – May 4, 2020
Weekly Jobless Claims Fall
Last week, U.S. equities were on a seesaw, rallying to close Wednesday at highs not seen since early March, then down through Friday to end the week nearly flat. There were several economic announcements last week: 1Q Gross Domestic Product declined 4.8%, quarterly personal consumptions fell 7.6%, March home sales dropped 20%, and personal income was down 2%. Weekly jobless claims were 3.8 million, falling from 4.4 million the previous week, with continuing claims of 18 millions. On March 13th, continuing claims were 1.7 million, so in a brief five-week span over 16.3 million more people claimed unemployment benefits.
Late Friday, President Trump announced that Gilead Science’s drug Remdesivir had been granted FDA approval for emergency use. Earnings season was in full swing last week as more than 150 companies in the S&P 500® Index announced quarterly results. Mega cap consumer technology names Microsoft Corporation, Apple, Inc., Amazon.com, Inc., and Google’s parent Alphabet, Inc. all announced quarterly results that were roughly in line with analyst expectations and were generally positive for their stock price. Facebook, Inc. rallied over 6% last week after announcing 1Q revenue above expectations along with 2Q guidance that was stronger than anticipated as digital ad revenue has remained strong during the shutdown. Earnings season will continue this week as over 160 companies in the S&P 500 are expected to announce quarterly results.
The S&P 500 Index was down 0.2% for the week. Its top-performing sectors were Energy (2.9%) and Communication Services (2.0%), while the bottom-performing sectors were Health Care (-2.6%) and Utilities (-4.3%). In the fixed-income market, the 10-year Treasury yield was even, ending at 0.6%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Truist Financial Corporation is a bank holding company headquartered in Charlotte, North Carolina. The company was formed by the merger of BB&T and SunTrust Bank, both regional banks based in the south. The bank operated 2,049 branches in 15 states and Washington, D.C,
Argent believes Truist’s enhanced scale will allow it to focus on best of breed systems and processes in order to drive a competitive advantage.Additionally, the combined company will be able to leverage complementary businesses in an attempt to generate additional sales. While the impact from Covid-19 certainly will impact Truist’s operation, Argent believes the unique features of the bank offers upside for our clients over the long term.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet Inc. (Google) | 8.7% |
| Mastercard Incorporated | 5.6% |
| Apple, Inc. | 5.3% |
| Fiserv, Inc. | 5.2% |
| Danaher Corporation | 5.1% |
Small Cap Core
| Fortinet, Inc. | 3.3% |
| UFP Technologies, Inc. | 3.2% |
| Lumentum Holdings, Inc. | 3.0% |
| PetIQ, Inc. | 2.5% |
| OneMain Holdings, Inc. | 2.5% |
Dividend Select
| Microsoft Corporation | 6.2% |
| Target Corporation | 5.6% |
| JPMorgan Chase & Co. | 5.2% |
| General Mills, Inc. | 4.6% |
| PepsiCo, Inc. | 3.7% |
Mid Cap
| CDW Corporation | 4.2% |
| NVIDIA Corporation | 4.1% |
| Ciena Corporation | 3.8% |
| Cintas Corporation | 3.8% |
| Helen of Troy Limited | 3.6% |
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.
