S&P Hits New High

Last Thursday, the S&P 500® Index closed over 4,000 for the first time. The index was under 2,500 on April 1, 2020, rising 65.5% in the last 12 months. Last weekend it was revealed that Archegos Capital Management was behind a selloff in many Chinese technology and American media companies. Archegos, the family office of Bill Hwang, a former Tiger Fund trader, participated in complex trades, including total return swaps. The $10B Archegos fund lost $8B in a mere ten days. Facilitating Archegos were investment banks Nomura Holdings, Inc. and Credit Suisse Group AG, among others. Total losses for the investment banks are unknown, but last week Nomura fell 19.5% and Credit Suisse dropped 18.9% as losses for these two firms mounted.

On the plus side last week, The Boeing Company gained 3.0% after Southwest Airlines Co. announced an order of 100 additional Boeing 737 Max jets. In addition, the Transportation Security Administration announced that U.S. air passenger traffic was up 3.9% from the prior week and averaged 1.4M over the last seven days. This is up over 700% from last year but is still 40% below the 2.3M average in 2019. Semiconductor capital equipment makers Applied Materials, Inc., Lam Research Corporation and Kulicke and Soffa Industries, Inc. were three of the four best performing stocks in the S&P 500 Index. All returned more than 8.5% for the week as global chip demand remains high and supply is tight, making semiconductor capital equipment more valuable.

The S&P 500 Index was up 1.1% for the week. Its top-performing sectors were Communication Services (3.4%) and Consumer Discretionary (2.2%), while the bottom-performing sectors were Health Care (-0.6%) and Consumer Staples (-0.8%). In the fixed-income market, the 10-year Treasury yield was even, ending at 1.7%.

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

Change Based Investment

Danaher Corporation, headquartered in Washington, D.C., designs, manufactures and markets healthcare equipment. Its product line includes Life Sciences and Diagnostics tools and products.

Danaher has a long history of delivering consistent earnings growth by continually improving its business. The company also is adept at acquiring businesses that are fast-growing and improving the returns of those businesses. Over the years, Danaher’s management team has demonstrated skill and discipline in selecting and integrating its many purchases. Danaher’s management team has not been afraid to cull its businesses as well in order to drive shareholder value. For instance, in 2016, Danaher spun off its industrial businesses to shareholders as Fortive. In mid-2018, the company announced its intent to spin off its dental operations. These changes leave the stand-alone Danaher as a more focused healthcare organization with higher organic growth prospects. We believe Danaher’s management embraces Argent’s Change-Based^SM investment approach.

Top 5 Equity Holdings

Large Cap Growth