Weekly Investor – July 6, 2021
S&P Closes at Another All-Time High
Equities rose again last week, as the S&P 500® Index closed at 4350, an all-time high. Strong economic data coupled with lower odds of a COVID-19 resurgence fueled equity returns. Nonfarm payrolls in June surprised to the upside with a gain of 850k jobs, compared to expectations of 720k. Additionally, May’s job numbers were revised up 24k. In COVID-19 news, Johnson & Johnson announced that its vaccine offered “strong protection” against the more transmissible, but less severe Delta variant.
Looking at the market, growth outperformed value last week as the S&P 500® Growth Index returned 2.9% compared to 0.4% for the S&P 500® Value Index. As the summer driving season heats up, oil climbed over $75 a barrel for the first time since 2018. In stocks, Advanced Micro Devices, Inc. and Xilinx, Inc. were the two top-performing names in the S&P 500 last week, after EU regulators granted unconditional approval for their pending merger. The Boeing Company dropped 4.7% after the FAA said it sees a need for more test flights for Boeing’s new 777X wide-body plane. Walgreens Boots Alliance, Inc. fell 7.7% last week after announcing disappointing forward guidance as part of its quarterly results.
The S&P 500 Index was up 1.7% for the week. Its top-performing sectors were Technology (3.2%) and Consumer Discretionary (2.1%), while the bottom-performing sectors were Financials (1.3%) and Energy (0.7%). In the fixed-income market, the 10-year Treasury yield was down, ending at 1.4%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Starbucks Corporation is a coffee company and coffeehouse chain. It operates as a roaster, marketer and retailer of specialty coffee worldwide. The company was founded in Seattle, Washington in 1971 and operates over 30,000 locations worldwide.
Starbucks is finding new ways to improve margins and speed of delivery from its enhanced technology, platforms and processes within its cafes and mobile ordering application. Additionally, Starbucks has significant growth opportunities such as the Chinese market and increased cold beverage and food sales worldwide. While the company is being impacted by the coronavirus today we believe Starbucks’ positive growth opportunities will be realized over time for our long-term investors.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet, Inc.(Google) | 7.6% |
| Target Corporation | 6.8% |
| Apple, Inc. | 6.1% |
| Danaher Corporation | 5.2% |
| Mastercard Incorporated | 4.7% |
Small Cap Core
| Fortinet, Inc. | 4.9% |
| OneMain Holdings, Inc. | 4.5% |
| Medpace Holdings, Inc. | 4.4% |
| Select Medical Holdings | 3.3% |
| Telos Corporation | 2.9% |
Dividend Select
| Target Corporation | 7.9% |
| Microsoft Corporation | 6.1% |
| JPMorgan Chase & Co. | 5.4% |
| Eaton Corporation Plc | 4.1% |
| Life Storage, Inc. | 4.0% |
Mid Cap
| Zebra Technologies Corp. | 4.5% |
| Marvell Technology, Inc. | 3.9% |
| CDW Corporation | 3.9% |
| Cintas Corporation | 3.8% |
| NVR, Inc. | 3.1% |
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.
