Hello all, here’s what’s been going on in the markets.
Stocks have had an incredible start to the year and as you can see, have rallied sharply off the lows of late December.
Stocks have had an incredible start to the year and as you can see, have rallied sharply off the lows of late December.
In fact, this January saw an 8% gain for the S&P 500 Index, making it the best January since 1987 (we’ll ignore the fact that 1987 also saw a massive collapse in stocks later that year!).
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Helping fuel that rise was comments from the Fed earlier this month and this week, suggesting they were unlikely to pull back on their stimulus any further. This gave stocks an immediate boost.
The probability of an interest rate hike any time this year currently stands at less than 10%.
It’s clear that the largest contributor to the direction of the market remains the Fed. Their comments in October about a pullback in stimulus created the volatility that lasted until the end of the year. They’ve had to walk these comments back and as they did, stocks have risen.
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Economic reports have been decent this month, too. Out this week was the monthly jobs report, showing we added over 300,000 jobs in January:
The 4th quarter GDP report was due out this week, too, but has been delayed due to the government shutdown. However, economists are predicting a number between 2.5-3%:
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Corporate earnings for the fourth quarter have been coming in above estimates, too. With just over 40% of companies in the S&P reporting results, earnings are on pace to rise over 12% over the past year according to Factset. While this is a slowdown from the numbers north of 20% last year, it’s still a respectable pace.
There were some pockets of weakness worth noting. Big global companies like Caterpillar have not done well due to weakness in other parts of the globe. Overall, though, stocks have done well after reporting earnings.
There were some pockets of weakness worth noting. Big global companies like Caterpillar have not done well due to weakness in other parts of the globe. Overall, though, stocks have done well after reporting earnings.
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Stocks have had a tremendous run over the last month and still have the momentum to move higher. However, they appear a little on the expensive side and we aren’t enthusiastic about putting new money in here. Right now we aren’t doing any selling, but not actively buying, either.
This commentary is for informational purposes and is not investment advice, an indicator of future performance, a solicitation, an offer to buy or sell, or a recommendation for any security. It should not be used as a primary basis for making investment decisions. Consider your own financial circumstances and goals carefully before investing. Past performance cannot guarantee results.
This commentary is for informational purposes and is not investment advice, an indicator of future performance, a solicitation, an offer to buy or sell, or a recommendation for any security. It should not be used as a primary basis for making investment decisions. Consider your own financial circumstances and goals carefully before investing. Past performance cannot guarantee results.
