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January 2025 Market Recap
Across the equity markets, January started off slowly, encountering a bit of volatility before recovering into the month end. Investors had a lot of news to digest from corporate announcements of year end results to potential resolution of geopolitical issues.
Throw in all the pronouncements by the new Trump administration on trade, tariffs, fiscal policy, and immigration, and it is not surprising January had a bit more volatility.
US interest rates bounced around some and as expected, the Fed held rates steady at their late January meeting, citing the need for a clearer picture on inflation and employment trends before any additional rate cuts will occur.
Here are a few observations about what occurred across the public markets during the month:
Overall
- The S&P 500 Index was up 2.8% in January and was up 26.4% on the trailing one year.
- The MSCI ACWI ex USA MSCI Index was up 4.0% in January and was up 10.9% on the trailing one year.
- The Bloomberg Aggregate Bond Index was up 0.5% in January and was up 2.1% on the trailing one year.
Domestic Equity
- US stock categories were positive across the board in January, with mixed results across size and style, reflecting more stock specific drivers than one dominant positive theme.
- Large cap value outperformed large cap growth largely due to the weakness in select tech stocks. In the mid and small caps, growth outperformed value. Increased market breadth led to the equal weighted S&P 500 outperforming the cap weighted by 0.72%.
International and Global Equities
- Overseas stocks outperformed US stocks despite the trade rhetoric from the new administration. The USDollar weakened during the month, helping non-US stocks.
- Emerging market stocks lagged developed market stocks due to their greater sensitivity to US trade tariffs.
Fixed Income Markets
- Bonds delivered modest returns for the month as interest rates were largely range bound and credit fundamentals remain strong.
Specialty Markets
- Commodities performed well despite a late month collapse in natural gas prices. REITs recovered from a difficult December to deliver modest gains in the month.
US Equity Sectors
- Communication Services, Healthcare, and Financials were the top performing sectors in January, illustrating the greater market breadth. The collapse in many AI stocks dragged down the Information Technology sector, the only negative performing sector.
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Disclaimer:
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change. References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. Connor & Gallagher OneSource doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, Connor & Gallagher OneSource makes no representation as to its completeness or accuracy.
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