A few weeks back, we took pen to paper on a Weekly Wire that pointed out – at the risk of jinxing it – that the S&P 500 was up 1.4% over the first four trading days of the year, and that if we could close positive for the year through the fifth trading day of 2023 (January 9th), the odds were quite good that US equities would deliver a positive return for the full year (since 1929, when the stock market was up through the first five trading days, it went on to deliver a full year gain 75% of the time, producing an above average annual return of 11.9%).
Well, the S&P 500 didn’t disappoint, as the market was up about 1.3% through Monday, January 9th. Now – at the risk of jinxing it – we find ourselves taking pen to paper on a Weekly Wire that is pointing out that the S&P 500, with two trading days to go in the month of January, is up 6.02% year to date (well above the 1.2% average return the month of January has historically produced; see graph). And this is worth noting as a positive January has historically been associated with a positive year for stocks. More specifically, since 1950, when the market produced a positive return for the month of January it went on to produce a positive return for the full year 85% of the time, providing investors with a well above average return of 17.6%.
As we all know, the market is ultimately driven by fundamental factors, particularly interest rates and earnings (the lower the better as it concerns the former, and the higher the better as it concerns the latter). That said, after an extremely challenging 2022 we have no problem grabbing onto any good news the new year will provide, and the US stock market beginning 2023 on the front foot, and what that might mean for full year returns, certainly counts as very good news to us.
The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital Investments, LLC, a registered investment advisor. 266-BCI-1/30/2023