Weekly Investor – September 27, 2021
S&P Up for the Week
The S&P 500® Index rose 0.5% last week. To begin the week, investors were spooked by the debt crisis at Chinese property developer Evergrande Group. In addition, NIKE, Inc. fell by as much as 4.5% in premarket trading after the company lowered its sales outlook due to production and shipping delays. Production in Vietnam has remained shut down by government mandates since mid-July.
In the US, Federal Reserve Chairman Jerome Powell took note of the global supply chain disruptions. Powell said Friday, “I’ve never seen these kind of supply-chain issues, never seen an economy that combines drastic labor shortages with lots of unemployed people and a lot of slack in the labor market.” His comments came after the Federal Reserve’s meeting on Wednesday. During the meeting the Fed outlined its planned reduction of monthly asset purchases as soon as its next meeting in November. The other noteworthy item announced was that half of the 18 Fed officials expect to raise interest rates by the end of next year. This is in contrast to the June meeting where most Fed officials expected rate increases in 2023. Looking ahead to this week and the end of the third quarter, Durable Goods Orders will be released today, followed by inventory data later in the week.
The S&P 500 Index was up 0.5% for the week. Its top-performing sectors were Energy (4.7%) and Financials (2.2%), while the bottom-performing sectors were Utilities (-1.2%) and Real Estate (-1.5%). In the fixed-income market, the 10-year Treasury yield was up, ending at 1.5%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Ameriprise Financial is a diversified financial services and bank holding company headquartered in Minneapolis. It provides financial planning products and services such as asset management, wealth management, annuities, insurance and estate planning. The company continues to shift towards asset and wealth management. With the recent acquisition of BMO’s EMEA asset management business, asset and wealth management will represent 75% of the company’s earnings. Additionally, Ameriprise decreased its exposure to life insurance, which will free up capital. We believe these changes will drive higher cash flow and boost the company’s value, making it a good fit for Argent’s Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
|D.R. Horton, Inc.||4.4%|
Small Cap Core
|Medpace Holdings, Inc.||4.9%|
|OneMain Holdings, Inc.||4.5%|
|Select Medical Holdings||3.2%|
|JPMorgan Chase & Co.||5.6%|
|Life Storage, Inc.||4.3%|
|Eaton Corporation Plc||4.2%|
|Zebra Technologies Corp.||4.5%|
|Marvell Technology, Inc.||4.1%|
|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.