After the 4th quarter sell-off, January followed with a strong rebound. By the end of last week, the S&P 500 was up 8% and is approximately 7.5% short of its all-time high set last year.
The most significant event of the month was the January 4th comments from the Federal Reserve Chair, Jerome Powell. He backed off previous comments about expected Fed Funds rate increases in 2019 expressing the committee’s intention of not raising rates again until inflation accelerates. It was welcome news to investors, and it played a role in the January rally.
It was a broad-based rally as small cap stocks, internationally developed countries and emerging economies also participated in the market good fortunes.
The energy and industrial sectors led the market advance while defensive sectors like the utilities and consumer staples sector lagged.
Notable Market and Economic Happenings:
- 80% of S&P 500 stocks are trading above their 50-day moving average. It is the highest reading in a year and suggests the market rally is benefiting a broad group of companies.
- New home sales surged in November to 657,000 SAARs. This is the strongest reading since Q1 of 2018.
- The Bureau of Labor Statistics report indicated the economy added 304,000 jobs in January exceeding expectations for the month by a wide margin.
Inspirational Thought for the Day:
“The greatest mistake you can make in life is to continually fear you are going to make one.” – Navjot Singh Sidhu
