Stocks showed mixed results last week as recession fears resurfaced in response to weak economic data and a tepid start to a new corporate earnings season.
The Dow Jones Industrial Average skidded 2.70%, while the Standard & Poor’s 500 declined 0.66%. But the Nasdaq Composite index gained 0.55% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, lost 0.50%.1,2,3
Mixed Economic Data
Stocks weakened to start the week amid discouraging corporate earnings and troubling economic data. Disappointing retail sales and manufacturing reports sparked concerns that the Fed may have gone too far in hiking rates, while a drop in initial jobless claims diminished chances of a near-term pause in rate hikes. Welcome news from two big technology names on Friday powered a strong rally that mixed significant indices.
The start of the earnings season was a drag on investor sentiment. While 69% of the S&P 500 constituent companies that reported earnings by Thursday (48 companies) exceeded expectations, the percentage of “beats” is below the three-year average. More concerning, however, was that average earnings declined by more than 2%.4
Retail sales fell 1.1% in December, capping an overall weak holiday shopping season. November retail sales were revised downward to -1.0%, from the earlier estimate of -0.6%. Compared to November-December 2021, sales increased by 5.3%, below the 6 to 8% increase expected by The National Retail Federation.5,6
Many economists viewed these lackluster numbers as evidence of a weakening consumer. A more cautious consumer raises more concerns about a recession at some point this year since the primary driver of U.S. economic growth is consumer spending.
This Week: Key Economic Data
Tuesday: Purchasing Managers’ Index Composite.
Thurday: Gross Domestic Product (GDP). Durable Goods Orders. New Home Sales. Jobless Claims.
Friday: Consumer Sentiment.
Source: Econoday, January 20, 2023
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
This Week: Companies Reporting Earnings
Tuesday: Microsoft Corporation (MSFT), General Electric Company (GE), Verizon Communications, Inc. (VZ), Johnson & Johnson (JNJ), Lockheed Martin Corporation (LMT), Texas Instruments, Inc. (TXN), Union Pacific Corporation (UNP), D.R. Horton, Inc. (DHI), Raytheon Technologies Corporation (RTX).
Wednesday: AT&T, Inc. (T), The Boeing Company (BA), Tesla, Inc. (TSLA), International Business Machines Corporation (IBM), Lam Research Corporation (LRCX), Abbott Laboratories (ABT), CSX Corporation (CSX), NextEra Energy, Inc. (NEE), KimberlyClark Corporation (KMB), Norfolk Southern Corporation (NSC), General Dynamics (GD).
Thursday: Intel Corporation (INTL), Visa, Inc. (V), Mastercard, Inc. (MA), Blackstone, Inc. (BX), Northrop Grumman Corporation (NOC), Southwest Airlines Co. (LUV), Rockwell Automation, Inc. (ROK).
Friday: Chevron Corporation(CVX), HCA Healthcare, Inc. (HCA), American Express Company (AXP), ColgatePalmolive Company (CL).
Source: Zacks, January 20, 2023
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Will The Bull Come Roaring Back? Positive Signs Abound
The HCM-BuyLine® has again firmed up substantially over the last few weeks giving us some optimism that a new uptrend could be materializing. Also, this week the NASDAQ Composite A/D indicator moved to its highest level since September 2021 and QQQ long-term breadth also improved. More indictors are...[READ MORE]7
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.
Beware of Improper Employee Retention Credit Claim
The employee retention credit (ERC) is a refundable tax credit for businesses that continued paying employees while shut down due to the COVID-19 pandemic or had significant declines in gross receipts from March 13, 2020–December 31, 2021. While this tax credit can be a great benefit for employers, there have been third parties promoting improper ERC claims.
Employers should be wary of third parties advising them to claim the employee retention credit when they may not qualify. These third parties often charge hefty upfront fees or a fee contingent on the refund amount.
There are several conditions employers must meet to be eligible for an ERC. If you know of any improper ERC claims, submit Form 3949-A, Information Referral, to the IRS.8
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
What is Dry Brushing?
Let’s face it: the cold winter weather is not friendly to our skin. If you’re struggling with dry, unhappy skin this winter, consider dry brushing!
Dry brushing involves taking a specialized brush and rubbing it on your skin. You can use a dry brush throughout most areas of your body, and the goal is to gently exfoliate your skin to get rid of dry, flakey skin and encourage blood flow. Dry brushing is a favorite skincare routine year-round, but it can be especially beneficial in the winter when your skin might be extra dry.
When dry brushing, make sure to use an appropriate brush and do it gently so as not to cause damage to your skin. Talk to your dermatologist before starting dry brushing if you have sensitive skin.9
Baked Sweet Potato and Egg Cups
Time: 35 mins
Baked Sweet Potato and Egg Cups are a delicious and nutritious breakfast made with grated sweet potatoes, eggs and spices baked in a muffin tin.
- Olive oil spray
- 2 1/2 cups peeled and grated, on large holes sweet potatoes (about 1 8-ounce potato)
- 2 teaspoons chopped fresh thyme leaves
- 1 teaspoon onion powder
- 1/2 teaspoon kosher salt, plus more to taste
- 1/8 teaspoon black pepper, plus more to taste,
- 1 ounce finely grated Pecorino cheese, 2 teaspoons reserved
- 6 large eggs
- Preheat over to 375°F. Spray a 6-cup non-stick muffin tin with oil spray and set aside.
- Toss grated sweet potato, thyme, 1/4 teaspoon salt, 1/8 teaspoon black pepper, onion powder and pecorino cheese (except for reserved 2 teaspoons) together in a mixing bowl to combine.
- Divide potato mixture evenly into six portions (about 1/4 cup plus 1 tablespoon) and place each in a prepared muffin cups.
- Press mixture into the bottom and up along the sides of each cup to form a well making certain there are no open gaps.
- Spray the insides of the potato wells with olive oil spray. Transfer to oven and bake for 8 minutes.
- Remove muffin tin from oven, gently press the bottoms of the sweet potato cups and crack an egg into each.
- Return tin to the oven and bake until white are set and yolk are cooked, 12 minutes for runny eggs, 14 for slightly hardened yolks.
- Let sit one minute before carefully removing using an off set spatula.
- Sprinkle with remains remaining pecorino and more salt and pepper to taste if desired.
Footnotes and Sources
1. The Wall Street Journal, January 20, 2023
2. The Wall Street Journal, January 20, 2023
3. The Wall Street Journal, January 20, 2023
4. The Earnings Scout, January 19, 2023
5. Census.gov, January 18, 2023
6. The Wall Street Journal, January 18, 2023
7. howardcm.com, January 17, 2023
8. IRS.gov, November 7, 2022
9. TODAY, January 31, 2015
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.
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