Monday, February 4, 2019

What January Means

The S&P 500 jumped 7.9 percent last month, its best January performance since 1987, and its biggest gain in any month since October 2015. The Dow rose 7.2 percent in January, which was also its largest one-month rise since 2015 and biggest January gain in 30 years.

Remember December? In that month, the S&P 500 fell 9.18 percent and briefly dipped into bear-market territory on Christmas Eve. Since December 24, however, stocks have been on a tear, with the S&P 500 rising about 15 percent.

It’s often said that as goes January, so goes the year. According to Stock Trader’s Almanac, going back to 1950, January’s performance has predicted the year’s returns 87 percent of the time. But the indicator also signaled a positive year last year, and the market’s December sell-off ended up wiping out all of the gains. The S&P 500 ended 2018 down 6.6 percent, despite rising 5.6 percent in January.

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