Weekly S&P500 ChartStorm - 2 February 2025
This week: monthly chart, January impact, growing optimism, small caps vs large caps outlook, darkening markets, CFA trends, corporate life expectancy, rotation...
Welcome to the latest Weekly S&P500 #ChartStorm!
Learnings and conclusions from this week’s charts:
The S&P 500 closed up +2.7% in January.
The equal-weighted index did +3.4% (sign of things to come?).
Companies are sounding more optimistic in earnings calls.
Investor confidence is down, economic confidence is up.
The scene is set for rotation (especially small vs large).
Overall, despite some volatility, January marked a solid start to the year, and the maintenance of momentum is a good sign (historically speaking — as the charts show). The intriguing uptick in economic optimism actually provides more of a prompt to ponder rotation and ranging rather than more of the same of the past few years. Change is in the air…
1. Happy New Month: The S&P500 closed January up +2.7% on the month, extending its bull run and 15-month streak above the 10-month moving average. Interestingly the equal-weighted S&P500 outperformed the cap-weighted; up +3.4% — a harbinger for some much overdue rotation?
Source:
2. Good January, Good Year? Stockmarket returns tend to be better when January is an up month. I’m guessing this is a trend/momentum thing — in other words, if stocks went up in January then there’s probably a good chance the market is already in an uptrend, and uptrends tend to …trend. I think Newtown said it best: “a body in motion at a constant velocity will remain in motion in a straight line unless acted upon by an outside force.”
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