Friends
Well, though the band had some trouble staying in key this month, things did end on a high note. January was an extremely volatile month for the markets. We’ve explored all the headwinds that we had to deal with as we entered the new year, the Fed, inflation, and valuation and those winds did indeed cause some very choppy waters. An old Wall Street saying says as January goes so does the rest of the year. Well, we have had 11 down Januarys since 2000 (this is #12) and only twice were stocks down for the whole year. So yes, it was a difficult month, and yes, we still have those headwinds to deal with, but where stocks will be 11 months from now, no one knows.
Anyway, for the day, the Dow Jones Industrial was up 406 points to close at 35,131. The S&P 500 was up 83 points to finish the day at 4,515. The Nasdaq Composite Index was up 469 points to close at 14,239. Gold was up $12 to trade at $1,798 per ounce, while oil was up $1.45 to trade at $88.27 per barrel WTI.
I saw a report today that said that individual investors are the most bearish they have been since 2013. It was a miserable start to the year so it’s not surprising that negative sentiment would spike. But sometimes extreme negative sentiment can set up a strong bounce for stocks. Perhaps that partly explains Friday and today’s move higher. But also remember, some of the strongest rallies occur during bear markets. That’s my way of saying don’t get carried away with a day or two’s market action- whichever direction.
Have a nice evening everyone.
