Besides, with our corporate headquarters in Kansas City, we can’t help but root for the Chiefs, and we simply can’t accept that such an instinct would be to the detriment of our clients. While the first linkage above holds some credence, there’s not a lot of cause-effect going on there, and certainly you wouldn’t hold much respect for us if we suggested that if the Eagles win the Super Bowl, we would turn even more positive on our market outlook for 2023. Some will talk about the “Super Bowl” effect… the observation that the stock market does well when an NFC team wins the Super Bowl. stock market is positive for the full year over 70% of the time when January returns are positive. Data connoisseurs/junkies will highlight that the U.S. A few might suggest we’re at the “all clear” stage. What does this all mean? Where do we think the market is headed for the rest of the year and what strategies should one employ in this stage of the economy and financial markets? Has the market bottomed and will there be smooth sailing ahead? We do think we are headed higher as the year evolves but caution and patience will still be virtues in the first half of the year, in our opinion. 3 The very cyclical consumer discretionary sector, which includes retailers, auto manufacturers and suppliers as well as leisure companies, was challenged in 2022 but has launched quite nicely in 2023. The defensive sectors, such as staples and utilities that exhibited strength last year, are rolling over in terms of relative performance and surrendering leadership to the cyclical and more aggressive sectors of the market, such as information technology, materials and industrials. To wit, it is the losers of 2022 that are leading early on in 2023. Leadership within the S&P 500 also demonstrated the willingness of investors to take on more risk. A weaker dollar also helped the return figures in these foreign markets. markets and were buoyed by a European economy that is weathering the shocks emanating from the Ukrainian-Russian war better than feared as well as by a Chinese economy that looks to have bottomed and that is benefiting so far this year from reopening and less austere COVID-19 policies. 2 International stocks did even better than the U.S. Small-cap stocks, represented by the Russell 2000, rose almost 10%, while the tech-laden Nasdaq rallied more than 10% in 2023’s first month. Investors showed some “risk-on” attitude for the first time in quite a bit. 1 But it feels like there could be much more to it than this fact when you look below the surface. The S&P 500 advanced over 6% in January, which marked the best January for this index since 2019. It provided a nice breather from the negativity we all felt throughout 2022. stock market broke out of the gate in style and good fashion in this new year.
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