Weekly Investor – December 21, 2020
Fed Keeps Interest Rates Near Zero
With a week until Christmas, likely surprising many investors, the S&P 500® Index has recovered from the bottom, returning 16.9% on a year-to-date basis. Last week, the Information Technology and Consumer Discretionary sectors led the index, while Communication Services and Energy lagged. Investors were focused on Washington, D.C. as lawmakers haggled over another stimulus plan. Meanwhile, monetary policy, set by the Federal Reserve, is expected to continue its “easy money” path after the Fed’s Board of Governors voted last Wednesday to keep interest rates near zero. As a sign of confidence, late last Friday the Fed announced that banks will be able to buy back shares following a successful stress test. JPMorgan Chase & Co. was one of the first banks to comment on the news, saying it plans to purchase up to $30 billion worth of its shares in the first quarter of 2021.
This week the Christmas holiday will have markets closed on Friday. The shortened week will have no shortage of economic news, however, as Gross Domestic Product (GDP), home sales and employment data are set to be released.
The S&P 500 Index was up 1.3% for the week. Its top-performing sectors were Technology (3.2%) and Consumer Discretionary (2.3%), while the bottom-performing sectors were Communication Services (-0.5%) and Energy (-4.3%). In the fixed-income market, the 10-year Treasury yield was up, ending at 1.0%.
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.
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
| Apple, Inc. | 6.8% |
| Alphabet, Inc.(Google) | 6.3% |
| Target Corporation | 5.8% |
| Danaher Corporation | 5.3% |
| Mastercard Incorporated | 5.2% |
Small Cap Core
| Medpace Holdings, Inc. | 4.0% |
| OneMain Holdings, Inc. | 3.6% |
| Fortinet, Inc. | 3.4% |
| PetIQ, Inc. | 3.0% |
| Envestnet, Inc. | 2.9% |
Dividend Select
| Target Corporation | 6.6% |
| Microsoft Corporation | 5.8% |
| JPMorgan Chase & Co. | 5.0% |
| Eaton Corporation Plc | 3.8% |
| Comcast Corporation | 3.7% |
Mid Cap
| NVIDIA Corporation | 5.0% |
| Cintas Corporation | 4.2% |
| Marvell Technology Group | 3.8% |
| Zebra Technologies Corp. | 3.7% |
| CDW Corporation | 3.5% |
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.
