After the disastrous end of the previous year, can investors count on the so-called "January effect" in January? Such expectations may have their basis in the strong rebound on Wall Street last Friday (S&P500 +1.26%, Nadsdaq100 +1.67%, Tesla +8.22%, Nvidia +4.45%), but historical averages also give hope for a good month. And historically, it was the Nasdaq100 that performed quite strongly in January (+1.67% on average (+2.65% median) for the period 2010-2024) - see Figure 1.
Additionally, the Nasdaq100 was positive 11 times in January and negative only 5 times (for the years 2010-2025) - see Table 1.
The stock market correction at the end of last year can also be explained by the earlier strong advance in stocks. See Figure 2. The Nasdaq100 rose by 11% through December 16 (in 2.5 months). Hence, the biggest drop was on the Nasdaq100: a 5% drawdown from the December 16 peak – see Figure 3. The Nasdaq100 also still has the most to make up from the last all-time high…
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