Weekly Investor – September 13, 2021
S&P Down for the Week
The S&P 500® Index returned -1.7% last week, with all four days of the holiday-shortened week posting declines. Equity markets have followed an upward trend most of the year with the S&P 500 currently sitting on an approximate 20% gain year-to-date.
The August non-farm payroll data released the previous Friday showed an increase of 235K jobs which was well under the expectations of 733K. While hospitality and leisure had strong job gains in the previous two months, hiring in the industry appeared to be flat for August with some attributing that to increased concerns over the spread of the COVID-19 Delta variant. This brought downward pressure on stocks last week as the underperforming jobs numbers and Delta may have led some investors to take profits over concerns of future growth.
Moderna, Inc., the biotech best known for its COVID-19 vaccine, was the top-performing stock in the S&P 500 Index returning 7.8%. The stock jumped on Thursday as the company held a research and development day and announced it is in the process of developing a combination vaccine for COVID-19 and the seasonal flu and a vaccine for respiratory syncytial virus (RSV). Apple Inc. declined approximately 3.5% last week after a judge ordered that the company must give application developers an option of sidestepping their commissions from in-app purchases, which could lead to lost revenue of a few billion dollars for Apple.
The S&P 500 Index was down 1.7% for the week. Its top-performing sectors were Consumer Discretionary (-0.3%) and Communication Services (-1.2%), while the bottom-performing sectors were Health Care (-2.7%) and Real Estate (-3.9%). In the fixed-income market, the 10-year Treasury yield was up, ending at 1.4%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
AbbVie Inc. is a U.S.-based pharmaceutical company founded in 2013. The company discovers, develops, manufactures and sells pharmaceutical products worldwide.
While it is widely known that AbbVie’s largest product, Humira, loses patent protection in 2023, recent new product launches, along with the acquisition of Allergan, have changed the growth opportunities for the company. For AbbVie, the acquisition of Allergan holds the potential for durable growth into the next decade with its BOTOX® Cosmetic treatment for wrinkles. Additionally, political uncertainty and concerns over potential changes to the health care system have resulted in an attractive valuation for AbbVie. AbbVie’s growth potential and attractive valuation, make it a good fit for Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
|D.R. Horton, Inc.||4.5%|
Small Cap Core
|Medpace Holdings, Inc.||4.7%|
|OneMain Holdings, Inc.||4.4%|
|JPMorgan Chase & Co.||5.4%|
|Life Storage, Inc.||4.6%|
|Eaton Corporation Plc||4.3%|
|Zebra Technologies Corp.||4.7%|
|Marvell Technology, Inc.||4.0%|
|Builders FirstSource, Inc.||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.