Stocks remain on fire in January as most of the major averages are hitting multi-year highs, and in some instances all time highs! For the week, the Dow Jones Industrial Average (chart) closed up 1.8%, the Nasdaq (chart) +0.48%, the S&P 500 (chart) +1.14% and the small-cap Russell 2000 (chart) finished the week higher by 1.39% and closing at an all time high. Once the S&P 500 was able to breakout and remain above the 1475 level, which had been a major resistance level, the money that had been sitting on the sidelines seemingly went to work. Also there has been a slow rotation out of bond funds and into stocks.
One would thing that a pullback of some sort is in the cards for equities. However, with earnings reporting season coming in better than expected so far, and the debt ceiling issue being pushed out, we may very well continue to see this upward trajectory for stocks at least in the short term. There could be one catalyst that may give the market a pause and that is next weeks jobs report. If the employment picture continues to remain weak, I would think that this could be a reason for stocks to take a breather.
In addition to the January jobs report released next week, we will also get earnings reports out of Caterpillar (NYSE: CAT), Yahoo (NasdaqGS: YHOO), Ford (NYSE: F), Amazon (Nasdaq: AMZN), Facebook (NasdaqGS: FB), Mastercard (NYSE: MA) and ExxonMobil (NYSE: XOM) just to name a few. Good luck to all.
Have a great weekend 🙂