Weekly Investor – October 18, 2021
S&P Posts Best Week Since Mid-July
The S&P 500® Index rose 1.8% last week, the best week since mid-July of this year. Equities rallied on the strength of corporate earnings. The S&P 500 had 20 companies release quarterly results during the week. Some of the more notable announcements were from large banks. JPMorgan Chase & Co. had a positive earnings announcement along with better-than-expected revenues. JPMorgan’s results were driven by investment banking revenue, trading revenue and better-than-expected credit losses. Bank of America Corporation posted similar results, with earnings and revenue ahead of street expectations fueled by higher trading revenue and lower loan losses. Strong bank earnings announcements further confirm that the U.S. economy is healthy despite supply chain and employment headwinds.
Looking to this week, earnings season continues with 76 companies in the S&P 500 expected to report quarterly results. Some notable names include American Express Company, Honeywell International Inc., Netflix, Inc., Tesla, Inc. and Union Pacific Corporation.
The S&P 500 Index was up 1.8% for the week. Its top-performing sectors were Basic Materials (3.6%) and Consumer Discretionary (3.5%), while the bottom-performing sectors were Health Care (0.8%) and Communication Services (-0.4%). In the fixed-income market, the 10-year Treasury yield was even, ending at 1.6%.
We continue to seek companies that reflect our Change-BasedSM investment approach.
Change Based Investment
Applied Materials, Inc. is a U.S. corporation that supplies equipment, services and software for the manufacture of semiconductor chips for electronics, smartphones, televisions, flat panel displays and solar products.
Applied Materials is a well-run company and considered a “best-in-breed” semiconductor equipment supplier. Additionally, there is a trend in the industry toward more complexity in semiconductors. This trend should drive a higher level of spending for semiconductor manufacturing equipment and as a consequence, higher earnings for Applied Materials. Recently, concerns over global shortages of semiconductors have prompted manufacturers to increase their capital expenditure plans. This should improve Applied Materials’ prospects. Longer term, the positive changes going on at the company make Applied Materials a good fit for our Change-BasedSM investment approach.
Top 5 Equity Holdings
Large Cap Growth
| Alphabet, Inc.(Google) | 8.4% |
| Apple, Inc. | 6.3% |
| Danaher Corporation | 5.7% |
| Target Corporation | 5.7% |
| LPL Financial Holdings | 4.5% |
Small Cap Core
| OneMain Holdings, Inc. | 4.6% |
| Medpace Holdings, Inc. | 4.6% |
| Fortinet, Inc. | 4.6% |
| ASGN Incorporated | 3.3% |
| FirstService Corporation | 3.2% |
Dividend Select
| Target Corporation | 6.7% |
| Microsoft Corporation | 6.5% |
| JPMorgan Chase & Co. | 5.6% |
| Eaton Corporation Plc | 4.2% |
| Truist Financial Corp. | 3.7% |
Mid Cap
| Marvell Technology, Inc. | 4.2% |
| Zebra Technologies Corp. | 4.1% |
| Cintas Corporation | 4.0% |
| CDW Corporation | 3.7% |
| Builders FirstSource, Inc. | 3.7% |
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.
