Wealth Watch: Shaky Markets in July Not Necessarily a Cause For Concern

Wealth Watch: Shaky Markets in July Not Necessarily a Cause For Concern

July 21, 2021

From the desk of Vance Howard:

Bond yields were falling on Monday’s equity selloff, with the selloff helping to push a flight to the relative safety of bonds. The 10-Year Treasury yield fell below its 200-day moving average to the lowest level since February, and that is hurting financial stocks. The Financial Sector SPDR (XLF) is threatening its June low. Furthermore, the Energy SPDR (XLE) fell to a 3-month low after a big drop in the price of oil, making energy shares the day's weakest sector. 


Sufficient panic shown in VIX term structure is associated with market bottoms. July is historically very choppy, and despite the HCM-BuyLine® being positive, being patient for a few days or a week or two during this time of chop could be wise. 


The global story of COVID-19 is the Delta variant. Over the past 8 weeks, the story of COVID-19 has become almost singularly about the Delta variant.  We feel this is more media driven news than a real cause of great concern.

Retail sales rebounded 0.6% in June, contrary to the consensus of -0.4%. It was the third increase in the past four months and followed a downwardly revised -1.7% in May. The surprise increase last month was due in large part to higher consumer prices, as retail sales are reported in nominal terms. Discounting by the CPI for consumer commodities, which was up 1.7% in June, suggests that real retail sales actually declined by about 1.0% for the month.

Nevertheless, the surprise increase in retail sales suggests that companies’ revenues are growing. Most major categories posted solid gains, led by miscellaneous stores (+3.4%) and electronics and appliance sales (+3.3%). Other notables included: apparel (+2.6%), gas station sales (+2.5%), and food services (+2.3%). Those were partly offset by declines in vehicles (-2.0%), furniture (-3.6%), building materials (-1.6%), and sporting goods (-1.7%). Excluding vehicles, retail sales increased 1.3%, above the consensus of 0.5%.  


Vance Howard

Copyright © 2021, All rights reserved.

Our mailing address is:

Howard Capital Management Inc.
1145 Hembree Rd
Roswell, GA 30076

This newsletter is a publication of Howard Capital Management, Inc. It should not be regarded as a complete analysis of the subjects discussed nor should the newsletter be construed as personalized investment advice. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. It should not be viewed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Howard Capital Management, Inc. (“HCM”), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from HCM. Please remember to contact your primary investment professional, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising HCM’s investment management services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment management services. HCM is neither a law firm nor a certified public accounting firm and no portion of the commentary content should be construed as legal or accounting advice. A copy of the HCM’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request.

© 2021 Howard Capital Management, Inc. All rights reserved. Intended for receipt only and not for further distribution without the consent of Howard Capital Management, Inc.

 McCarthy Financial Group's Blog: Market Insights & Wealth Watch

Schedule Appointment