S&P 500: Setting the Stage
The January Barometer
Following the robust finish to 2023, the market kicked off the new year on a challenging note. The S&P 500 dipped 1.5% in the first trading week, while the Nasdaq, laden with tech stocks, faced a steeper decline, doubling that at -3%.
Setting the Stage in January
Bank of America Global Research presented a compelling table last week, indicating that January's performance serves as a reliable predictor for the entire year. According to the table, when January closes positively, the year concludes with an up 80% of the time, with an average annual return of 13%. Conversely, if January ends in the red, the year sees gains only 46% of the time, with a negative annual return averaging -0.7%.
My analysis remains in favor for the current market conditions to continue the correction that has started the new year, consolidating the record advance that ended 2023— this could set up for a down January and set the stage for the remainder of the year.