Weekly Investor – May 3, 2021
U.S. Weekly Jobless Claims Fall
Markets were mixed last week as good earnings reports resulted in some muted stock price reactions. In addition, many investors feared rising COVID-19 cases in India and other countries could lead to reduced global growth. By contrast, the U.S. economy is gaining steam. The U.S. economy grew by an impressive 6.4% in the first quarter. Meanwhile, U.S. weekly jobless claims fell to their lowest level since the pandemic began. The Federal Reserve signaled it will remain accommodative, even while it noted that labor markets and the economy are strengthening.
Last week, earnings were highlighted by big technology firms which handily beat estimates. However, price reactions were mixed as difficult comparisons and rising valuations led some traders to take profits. Apple, Inc. topped expectations by over 40% on strength in iPhones, Macs, and iPads. Despite beating expectations with 38% bookings growth, shares of Microsoft Corporation fell on conservative guidance. Both Alphabet, Inc. and Facebook, Inc. saw a surge in digital advertising that led to much better-than-expected results for the internet giants. In other earnings news, United Parcel Service, Inc. beat expectations on continued strength in packages. PulteGroup, Inc., a home builder, posted strong results on better-than-expected gross profits. Earnings season continues this week, along with important economic data expected to be released at the end of the week.
The S&P 500® Index ended even for the week. Its top-performing sectors were Energy (3.6%) and Communication Services (2.9%), while the bottom-performing sectors were Health Care (-1.9%) and Technology (-2.1%). In the fixed-income market, the 10-year Treasury yield was up, ending at 1.7%
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 its profitability. We believe JPMorgan also has the potential to gain market share in Europe with the continued weakness in the continent’s financial system. Longer term, we believe the company will continue to grow faster than its banking peers.
Top 5 Equity Holdings
Large Cap Growth
|D.R. Horton, Inc.||5.1%|
Small Cap Core
|OneMain Holdings, Inc.||4.2%|
|Medpace Holdings, Inc.||4.1%|
|UFP Industries, Inc.||3.3%|
|Select Medical Holdings||2.9%|
|JPMorgan Chase & Co.||5.6%|
|Eaton Corporation Plc||4.0%|
|United Parcel Service, Inc.||4.0%|
|Zebra Technologies Corp.||4.2%|
|Builders FirstSource, Inc.||3.4%|
|Marvell Technology Group||3.2%|
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.