Weekly: Best January Market in 4 years, 85% Probability of Further Increase?

For the first time in four years, the $S&P 500(.SPX)$ posted a positive result in January, as the index rallied to a 6.2% gain for the month. At the height of quarterly earnings season, the $NASDAQ(.IXIC)$ posted its fifth weekly gain in a row, lifted by strong results from selected technology stocks. The $S&P 500(.SPX)$ posted a more modest gain; the $DJIA(.DJI)$ fell slightly.

As of last Friday, the$Straits Times Index(STI.SI)$ gained 1.6% last week and$S&P/ASX 200(XJO.AU)$ dropped 0.29% last week.

As goes January, so goes the year?

The latest week’s stock market performance extended this year’s sharp divergence. For the week, the $NASDAQ(.IXIC)$ was up 3.3% while the $DJIA(.DJI)$ was down 0.2%. Year to date through Friday, the $NASDAQ(.IXIC)$ was up nearly 14.8% compared with the $DJIA(.DJI)$ ’s 2.4% gain.

Sam Stovall, chief market strategist at CFRA, said:

"Since World War II, if the market has risen in January, it has continued to rise more than 85 percent of the time in the remaining 11 months of the year, with an average gain of about 11.5 percent. Thus, the Stock Trader's Almanac "The old saying: 'as goes January, so goes the year' is true."

Since World War II, the $S&P 500(.SPX)$ has averaged an annual gain of about 9%, according to historical records. But Stovall noted that whenever the $S&P 500(.SPX)$ fell in the previous year, the $S&P 500(.SPX)$ usually rebounded sharply in the following year, with an average gain of 14% - and this also matches the current situation: The $S&P 500(.SPX)$ lost a whopping 19.44% last year.

Sectors & Stocks Performances Review

Across the $S&P 500(.SPX)$ , consumer discretionary and communication services were the top-performing sectors in Janaury, as they added 15% and 14%, respectively; utilities and healthcare were the weakest, with both falling around 2.0%.

Weekly Top Gainers of $S&P 500(.SPX)$

$Align Technology(ALGN)$ ,$W.W. Grainger(GWW)$ ,$Gap(GPS)$, $Pentair PLC(PNR)$ ,$A.O. Smith(AOS)$ ,$Advanced Micro Devices(AMD)$ ,$CarMax(KMX)$ ,$FedEx(FDX)$ ,$PulteGroup(PHM)$$Stryker(SYK)$

Macro Factors

Monetary moves: As expected, the U.S. FED lifted its benchmark rate by a 25 points—smaller than the 50 points hike approved in November—while acknowledging that inflation has recently eased.

Jobs bonanza: Last Friday’s monthly labor report sharply exceeded economists’ expectations, as the economy added 517,000 jobs in January—the most since last July. The unemployment rate slipped to 3.4%, the lowest since 1969.

Mixed earnings results: Halfway through earnings season, the proportion of $S&P 500(.SPX)$ companies that have beaten analysts’ earnings expectations remained slightly smaller than usual. About 70% had exceeded net income expectations as of Friday, trailing the five-year average of 77%. Overall, earnings are expected to decline about 5% relative to a year ago.

Bond volatility: The yield of the 10-year U.S. Treasury bond was little changed overall for the week at around 3.53%, but that flat result wasn’t indicative of its volatility.

Oil slump: The price of U.S. crude oil $Light Crude Oil - main 2303(CLmain)$ fell nearly 8% for the week to around $73 per barrel—the lowest level in about a month. An increase in U.S. crude supplies was among the factors that weighed on oil prices.

The Week Ahead: February 6-10

Notable Earnings to Watch: $Activision Blizzard(ATVI)$ ,$Take-Two(TTWO)$ ,$BP PLC(BP)$ ,$Uber(UBER)$ ,$Walt Disney(DIS)$ ,$Pepsi(PEP)$ ,$Lyft, Inc.(LYFT)$ Key events this Week:

Monday

    • No major reports scheduled

Tuesday

    • Consumer credit, U.S. Federal Reserve
    • Trade balance, U.S. Census Bureau

Wednesday

    • Wholesale inventories, U.S. Census Bureau

Thursday

    • Factory orders, U.S. Census Bureau
    • Weekly unemployment claims, U.S. Department of Labor

Friday

    • University of Michigan Index of Consumer Sentiment, preliminary result
    • Federal budget, U.S. Department of the Treasury


​​How is your trading plan in this week?Any special focus?

Please join the the Daily Discussion with Tigers​​


# 💰 Stocks to watch today?(28 Mar)

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  • Svengers19
    ·2023-02-06
    Thanks for sharing
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    • jerwy
      ok
      2023-02-07
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  • Helen1229
    ·2023-02-06
    👍🏻👍🏻👍🏻👍🏻
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  • Nase
    ·2023-02-06
    When i am bearish the stock market rally c🤣i missed the whole January scared of powel powerplay
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  • jerwy
    ·2023-02-07
    oh
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    ·2023-02-06
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    ·2023-02-06
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    ·2023-02-06
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    ·2023-02-06
    wow
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    ·2023-02-06
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    ·2023-02-06
    okay
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    ·2023-02-06
    👍🏻
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    ·2023-02-06
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    ·2023-02-06
    👍
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    ·2023-02-06
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    ·2023-02-06
    [呆住]
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    ·2023-02-06
    o
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  • AlfonsoDex
    ·2023-02-06
    ok
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  • TKY1978
    ·2023-02-06
    [Smile]
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