John Hancock: Weekly Market Recap Week Ended February 1st
January comeback
After the worst December since 1931, the S&P 500 started the new year off with a bang, posting its best January result since 1987 with a gain of 7.9%. The Dow added 7.2% in the opening month of 2019, which was that index’s best January result since 1989.
8+ years of uninterrupted job gains
The U.S. economy has generated job growth for 100 months in a row, the longest such streak on record. The government reported 304,000 jobs were added in January, with an average monthly gain of 241,000 jobs over the past three months. That’s up from an average of 223,000 for all of 2018.
Earnings momentum
The ongoing earnings season continues to be a positive catalyst for the stock market. Among S&P 500 companies that have reported so far, fourth-quarter earnings have risen an average 12% compared with the same quarter a year ago, according to FactSet. However, that growth rate is expected to decline in coming quarters.
As January goes …
If history is a guide, January’s positive result for stocks could bode well for 2019 as a whole. Going back to 1929, a market gain or loss in January preceded a full-year result in the same up-or-down direction 71% of the time, according to S&P Dow Jones Indices. However, the saying, “As January goes, so goes the year,” didn’t pan out in two of the past three years.
Source: https://wmr.jhinvestments.com