Weekly Investor – September 28, 2020
Hope for Stimulus Package Dims
Stocks closed slightly lower last week, with the S&P 500® Index declining by 0.6%. Hopes of a stimulus package dimmed last week after representatives expressed doubts that a deal between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin could be struck by Election Day.
On Friday, after an up and down week, stocks rallied, driven by strength in the Information Technology sector. Twitter, Inc. gained over 9.0% for the week, after reporting increased user engagements. A sense of hope was felt in the restaurant industry as Darden Restaurants, Inc., the parent company of Olive Garden and Red Lobster, reported better-than-expected earnings. Reduced capacity dining was offset by an increase in carryout orders, boosting the company’s results. Investors will gauge the strength of the economy this week when second quarter data on GDP (Gross Domestic Product) is released on Wednesday. On the horizon is earnings season, as many companies will report their results for the third quarter in October.
The S&P 500 Index was down 0.6% for the week. Its top-performing sectors were Information Technology (2.1%) and Consumer Discretionary (1.2%), while the bottom -performing sectors were Materials (-4.6%) and Energy (-8.6%). In the fixed-income market, the 10-year Treasury yield was even, ending at 0.7%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
JPMorgan Chase & Co. is a financial holding company that provides financial services worldwide. Founded in 1823 and headquartered in New York, JPMorgan operates in several segments: investment banking, commercial banking, asset management, retail finance and credit card and auto finance.
JPMorgan emerged from the U.S. financial crisis with a solid balance sheet that provided its management team the opportunity to execute its business plan. As a result, JPMorgan was able to gain market share and improve profitability. We believe JPMorgan also has the potential to gain market share in Europe with the continued weakness in the continent’s financial system. Recent concern over COVID-19 has put pressure on interest rates. Most likely, this will negatively impact the profitability of JPMorgan Chase along with all other banks. These issues will put near-term pressure on the shares of JPMorgan Chase. Longer term we believe the company will continue to grow faster than its banking peers.
Top 5 Equity Holdings
Large Cap Growth
| Apple, Inc. | 6.9% |
| Alphabet, Inc. (Google) | 6.1% |
| Target Corporation | 6.0% |
| Mastercard Incorporated | 5.8% |
| Danaher Corporation | 5.5% |
Small Cap Core
| Medpace Holdings, Inc. | 3.6% |
| Fortinet, Inc. | 3.1% |
| Addus Homecare Corp. | 2.9% |
| Gibraltar Industries, Inc. | 2.9% |
| PetIQ, Inc. | 2.8% |
Dividend Select
| Target Corporation | 6.9% |
| Microsoft Corporation | 6.3% |
| JPMorgan Chase & Co. | 4.5 |
| Comcast Corporation | 3.9% |
| Eaton Corporation Plc | 3.8% |
Mid Cap
| NVIDIA Corporation | 5.9% |
| Cintas Corporation | 4.7% |
| Marvell Technology Group | 3.7% |
| CDW Corporation | 3.5% |
| NVR, Inc. | 3.4% |
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.
