Weekly "Focus" and a January to Remember
Bradley Goldhar - Feb 03, 2023
After a challenging 2022, stock markets got off to a strong start in January.
After a challenging 2022, stock markets got off to a strong start in January. The Canadian market gained in price 7.1% whereas the US market, as represented by the S&P 500, was higher by 6.1% (i). The NASDAQ Index, which has a higher proportion of growth-oriented companies, was up by more than 10.6% (i). Could the gains be a result of “The January Effect”, which suggests there is normally a lot of buying in January after a period of tax loss selling? Maybe, as there certainly was a bounce in many beaten up companies. Could the positive gains in January foretell what may happen the rest of the year as suggested by the “January Barometer”? This concept looks at whether a gain in the first month of the year is an indicator for a positive gain for the full year. This idea was floated by the founder of the Stock Trader’s Almanac and from 1950 to 2021, it has been accurate 84% of the time (ii). Let’s check back next January to see if 2023 is another example – here’s hopin’!
This week’s "Focus" from our economics team is attached.
Have a great weekend,
Brad
Bradley Goldhar | Senior Portfolio Manager and Senior Investment Advisor
Source: (i) ThomsonOne
(ii) Stock Trader’s Almanac