Stocks have wrapped up January with some surprises because the benchmark S&P 500 (SP500) finished the month with a gain of 6.2%. An excellent larger advance was seen on the tech-heavy Nasdaq Composite (COMP.IND), which closed the month up 11% to mark its best begin to the 12 months since January 2001. While trades favored growth-oriented sectors, the Dow Jones Industrial Average (DJI) was also within the green, ending the month with an advance of two.8%.
As goes January, so goes the 12 months? The S&P 500’s rally signifies that stocks hit the so-called “January Indicator Trifecta” this 12 months, which supplies the blue-chip index near if not a 100% historical probability of rising strongly for 2023 as a complete, in line with Jeff Hirsch of the Stock Trader’s Almanac. He also told Searching for Alpha that the S&P 500 should rise 15%-20% for 2023 as a complete., calling the present environment “super-bullish.”
It’s a giant turnaround from 2022, when soaring inflation and an aggressive Federal Reserve dented market sentiment. Attitudes are changing, nonetheless, and the central bank is more likely to take its foot further off the accelerator at today’s FOMC meeting. Traders widely expect the pace of rate hikes to slow to 25 basis points, from a 50 bps increase in December, and which followed 4 back-to-back 75 bps hikes. Take a look at the newest Wall Street Breakfast survey to find what the SA community thinks will come next.
The clear leaders of the S&P 500 Index in January have been sectors like Consumer Discretionary, Communication Services, Real Estate, Information Technology and Materials, though individual players have stood out (especially in comparison to their 2022 performance). Here’s a have a look at the highest 10 best-performing stocks:
YTD returns: Tesla (NASDAQ:TSLA) +60.2%, Warner Bros. Discovery (NASDAQ:WBD) +55.4%, Western Digital (NASDAQ:WDC) +39.9%, Nvidia (NASDAQ:NVDA) +36.5% and Carnival Corp. (NYSE:CCL) +35.8%.
Other winners: Paramount Global (NASDAQ:PARA) +35.7%, SVB Financial (NASDAQ:SIVB) +35.3%, Royal Caribbean Cruises (NYSE:RCL) +33.3%, Expedia (NASDAQ:EXPE) +30.4% and MarketAxess (NASDAQ:MKTX) +27.7%.
Additional technical evaluation? Take a look at SA’s charting features. Also discover an AI-driven ETF that doubled the return of the S&P 500 in January.