Reward 1000 Tiger-coinsAs of the close of January 31, most global stock markets were up. In January, $S&P 500(.SPX)$ rose 6.60%; $NASDAQ(.IXIC)$ rose 11.53% and $HSI(HSI)$ rose 10.42%.
The stock market has an old saying: as goes January, so goes the year.
Although many Wall Street strategists still expect US stocks to continue to shake and may test new lows again before the end of the year, the January rally may signal that US stocks can continue to rise over the next 11 months.
1. Sector Performance REVIEW in January
Typically, sectors that perform well in January will perform strongly for the next 12 months.
By far the biggest gainers in U.S. stocks were non-essential consumer goods, up 13.4%, followed by communication services and technology. Underperformers were utilities, health care and consumer staples.
1) Semiconductor
$NVIDIA Corp(NVDA)$ $ON Semiconductor(ON)$ $Intel(INTC)$ $Advanced Micro Devices(AMD)$ $Semiconductor Bull 3X Shares(SOXL)$ all record positive gorwth in Jan.
$Semiconductor Bull 3X Shares(SOXL)$ leads in the semiconductor sector. It is also said new hot topic of ChaGPT will benefit chips and especially $NVIDIA Corp(NVDA)$.
semiconductor 1-month performance; from tradingview
2) New energy vehicles
$Tesla Motors(TSLA)$ rebounded 33% in a week and recovered much that lost in Dec. It's rumored that $Lucid Group Inc(LCID)$ may gain new investments and surged on the news.
EV 1-month performance; from tradingview
3) China stocks
Although China stocks begin to retrace recently, $HSI(HSI)$ still outperforms global stock markets. $Alibaba(BABA)$ $Pinduoduo Inc.(PDD)$ $HSI(HSI)$ $JD.com(JD)$ $Bilibili Inc.(BILI)$
China stocks 1-month performance; from tradingview
(4) Cloud service
$Salesforce.com(CRM)$ $Atlassian Corporation PLC(TEAM)$ $Cloudflare, Inc.(NET)$
cloud service 1-month performance; from tradingview
2. A 80% chance that US stocks will rise in 2023?
Sam Stovall, chief market strategist at CFRA, said.
"Since World War II, if the market rallies in January, it continues to rise for more than 85% of the remaining 11 months of the year, with an average gain of about 11.5%."
Whenever the S&P 500 declines in the previous year, S&P 500 usually rallies sharply in the following year, with an average gain of 14%. And that matches the current situation: the S&P 500 plunged 19.44% in 2022.
Ryan Detrick, chief market strategist at Carson Group, also said
After the previous year's negative growth, strong returns are more likely when the S&P 500 rises more than 5% in January.
This combination has only occurred five times in history, but the S&P 500 has risen sharply in all five instances in the year they occurred, with an average gain of 30%.
3. Risk of a massive sell-off remains
While historical trends show a high probability that US stocks can rise this year, this is in stark contrast to the current market sentiment: the market is still worried about the risks of a possible recession, continued Fed rate hikes and deteriorating earnings.
Jonathan Krinsky, chief market technical analyst at BTIG, said that although US stocks showed technical improvement in January and the S&P 500 apparently broke its downtrend, this does not mean there will not be a massive sell-off and test of the lows ahead.
Over the past 25 years, the S&P 500 has fallen an average of 0.26% in February. Analysts also said that stock market will face a decline in Q1.
Do you agree that Jan. positive performance will make 2023 a good year?
Can Feburary repeat Jan.'s performance?
Comments
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🌟🌟🌟After the doldrums of 2022, January is like a breath of fresh air with lots of optimism. February looks like it is set to follow the uptrend. Even Jerome Powell's recent speech has ignited more hope for 2023.
With high inflation slowly coming down, and even possibility of recession in 2023, the market sentiment is still positive. CBOE VIX index or the Fear Index is 18.33 currently. It is almost at its lowest point in 1 year from a high of 38.
So 2023, The Year Of The Rabbit will be a great year for investors. As a eternal optimist, I truly believe that the Best is yet to be!
@Tiger_chat