Weekly Investor – May 10, 2021
S&P at Record High
The Energy, Materials and Financials sectors led the market last week as the S&P 500® Index rose to a record high. Payroll data released last Friday was well below expectations. Consensus was looking for an incremental one million jobs, instead the official number was a paltry 266,000. That data rattled the markets early on Friday before stocks rallied for the day to close the week up over 1%. Although the market reached new highs, tech stocks by and large moved in the opposite direction. The tech-heavy NASDAQ Composite Index lost value last week.
As mentioned, Energy and Materials led the market. Oil field service company Baker Hughes gained over 20% last week as the oil rig count continues to recover. Steel company Nucor Corporation was also up over 20% after an industry-wide trend of improving sales and margins set the tone for a bullish outlook for the second half of 2021. With economic activity picking up, but the latest jobs numbers weak, policymakers are reluctant to change their conservative views of the recovery. Treasury Secretary Janet Yellen commented that the jobs report “underscores the long-haul climb back to recovery.”
The S&P 500 Index was up 1.2% for the week. Its top-performing sectors were Energy (8.9%) and Basic Materials (5.9%), while the bottom-performing sectors were Utilities (-1.1%) and Consumer Discretionary (-1.2%). In the fixed-income market, the 10-year Treasury yield was down, ending at 1.6%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
LPL Financial Holdings, Inc. was founded in 1968 and is considered the largest independent broker-dealer in the United States. The company offers a platform of proprietary technology, brokerage and investment advisory services to independent financial professionals and financial institutions.
LPL made investments in its technology and product offerings which have resulted in strong organic growth. Additionally, LPL’s growth outlook remains strong as higher technology and regulatory expenses for smaller financial professionals and institutions enhance the trend of outsourcing back-office capabilities. These changes coupled with an attractive valuation make LPL Financial a good fit for Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
|D.R. Horton, Inc.||5.3%|
Small Cap Core
|OneMain Holdings, Inc.||4.2%|
|Medpace Holdings, Inc.||4.0%|
|UFP Industries, Inc.||3.5%|
|JPMorgan Chase & Co.||5.7%|
|United Parcel Service, Inc.||4.2%|
|Eaton Corporation Plc||4.0%|
|Zebra Technologies Corp.||4.1%|
|Builders FirstSource, Inc.||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.