“January stock market turnaround”: A positive shift in January’s stock market could forecast a promising year ahead.

US stocks rallied powerfully last week following a topsy-turvy start to the month. History suggests that if the market can maintain those gains, it could bode well for the rest of the year. The major Wall Street indexes started the year by breaking a nine-week streak of gains, driven by rising optimism about the Federal Reserve’s ability to manage inflation without causing mass unemployment.

Tech stocks led the broader market higher last week, resulting in all three major indexes turning positive for the year. The S&P 500 and the Dow Jones Industrial Average indexes, both notching record high closes on Friday, are up 1.2% and 1.1% this month, respectively, while the Nasdaq Composite has added 1.7%.

Seasonal indicators such as the January barometer and the First Five Days of January indicator suggest a positive sign for the rally’s longevity. However, the market’s performance during the first five trading days of January has analysts wondering if investors should be concerned.

Despite the conflicting indicators, analysts advise that investors should remain cautious. The University of Michigan’s latest consumer survey indicated a significant improvement in Americans’ attitudes towards the economy, buoyed by slowing inflation. Meanwhile, home sales last year dropped to the lowest level in 28 years, with high prices and low inventory contributing to the decline.

Source: CNN
Source: CNN