From the desk of Vance Howard:
The market has pulled back to the point where it should be considered buyable. The trend is still very strong, and the HCM-BuyLine® is positive. Pullbacks are healthy; markets always adjust and reset, even in a bull market. I would not be surprised to see a pretty good move back up in the last two weeks of August. Remember, August is historically a weak month for the market. Many managers are behind this year and will be trying to play catch up, and many retail investors are way under-invested, making a strong case for a solid year-end rally.
Chart: SOXX 1-year daily
The Semiconductors ETF (SOXX) has pulled back, along with two stocks tied to AI: Nvidia (NVDA) and AMD (AMD). All three look attractive at these levels.
Chart: AMD 1-year daily
The progress in CPI inflation stalled in July, as shelter and other core services prices continued to exert steady-to-upward pressure. Favorable base effects have waned. The three-month annualized core inflation rate, which sidesteps the base effects, eased to 3.1%, the least since September 2021, but it is still markedly higher than pre-pandemic. Trends and expected stabilization in some core components, such as used vehicle prices, suggest that further progress will be slower and more difficult to achieve. The Fed’s fight on inflation is not yet over. Regardless of whether the Fed hikes again by the end of this year, we expect the Fed to keep rates higher for longer.
The Consumer Price Index (CPI) increased 0.2% in July, in line with the consensus. Core CPI also rose 0.2% and in line with the consensus. It matched the gain in the prior month, which was the smallest since February 2021. Subdued core price growth was due to the outright 0.3% decline in core goods prices, down for the second consecutive month, and by the second most since April 2020. In contrast, core services prices rose 0.4%, which was an acceleration over the prior month’s 0.3% gain.
This communication is issued by Howard Capital Management, Inc. It is for informational purposes and is not an official confirmation of terms. It is not guaranteed as to accuracy, nor is it a complete statement of the financial products or markets referred to. Opinions expressed are subject to change without notice. Howard Capital Management, Inc. may maintain long or short positions in the financial instruments referred to and may transact in them as principal or agent. Unless stated specifically otherwise, this is not a recommendation, offer or solicitation to buy or sell and any prices or quotations contained herein are indicative only. To the extent permitted by law, Howard Capital Management, Inc. does not accept any liability arising from the use of this communication. Howard Capital Management is an SEC-registered investment advisor which only does business where it is properly registered or is otherwise exempt from registration. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability. Past performance is no guarantee of future results.HCM-022223-WW05 (02/2023)