From the desk of Vance Howard:
The market has pulled back to the point of being oversold. After a nice rally a period of consolidation can often be expected. This has little effect on the HCM-BuyLine®, and it remains positive. The S&P has set into what is called a golden cross, where the 50-day moving average crosses above the 200-day moving average, reflecting another bullish pattern. Also, the S&P 500 remains above the 200-day moving average, and a breadth signal occurred on 1/12, another bullish signal. VIX, the volatility index, is now oversold and a reversal is probably imminent. Pullbacks are buyable until the HCM-BuyLine® turns negative, and it has a good amount of room to move before that happens. Remember, you sometimes have to do what is not comfortable to be successful, and sometimes markets are a very uncomfortable place to be.
The S&P Global Flash U.S. Composite PMI climbed 3.4 points in February to 50.2, its best level and in expansion territory for the first time since June 2022. The improvement in private sector activity comes on the back of some better-than-expected economic data for January, including nonfarm payrolls and retail sales. Although the latter may have been impacted by seasonality and benchmark adjustments, and the risk of recession later this year has not been eliminated, the cumulative evidence still suggests that the odds of a soft landing for the economy have improved.
In both services and manufacturing, cost burdens eased but selling prices picked up. This suggests that firms continue to have pricing power, which bodes well for their profitability, but also implies that consumer price inflation may be stickier than anticipated.
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)