Medicare Agent News: The 2023 Rally Marches On

Monday, January 30, 2023

The 2023 Rally Marches On

By Alex Eule Friday, January 27

The January Effect. Stocks closed out another strong week, with the Nasdaq Composite, in particular, benefiting from the 2023 rebound. The tech-heavy index rose another 1% today, pushing its weekly gain to 4.3%. It's the Nasdaq's fourth-straight week in positive territory.

The S&P 500 rose 0.25% on the day and 2.5% on the week, while the Dow Jones Industrial Average was essentially flat on the day but still up 1.8% this week.

As investors look toward an end to rate hikes, growth-focused tech stocks have been the primary beneficiary. The Nasdaq is closing in on its best January in more than 20 years. With two trading days to go, the index is up 11% on the month, its best January since a 12.2% gain in January 2001.

For a lot of folks, the '01 callback will come with bad memories. At the time, the market was still dealing with the dot-com crash. After the strong January, the Nasdaq went on to fall 30% through the rest of 2001. Ultimately, the Nasdaq didn't find its bottom until October 2002.

For today, investors seemed to take solace in the latest personal consumption expenditure data released this morning. The PCE price index was up 5% year over year and just 4.4% excluding food and energy. But personal expenditures were down 0.3% in December, a sign of consumer weakness and potential recession. For investors, the first reaction still comes down to interest rates. A continued slowdown in inflation -- paired with weaker consumer spending -- could be just the formula the Federal Reserve needs to pause its rate hikes.

Here's how Bill Adams, chief economist for Comerica Bank, interpreted the data:

With cooler inflation and increased signs that the economy may have in fact turned, financial markets are pricing in a smaller quarter percentage point rate hike for the Fed’s decision next week—and are now also pricing in the possibility that the Fed holds rates unchanged at their following decision in March.

As of now, futures markets are betting on a 99% chance of that quarter-point rate hike next week.

Watch our weekly TV show on Fox Business Saturday or Sunday at 10 a.m. or 11:30 a.m. ET. This week, investment strategies from Jason Brady, CEO of Thornburg Investment Management. Plus, insights on what corporate earnings reports -- and a growing list of layoffs -- are saying about the market outlook.