Investors were cautious for much of the month, likely waiting to see what President Trump would do during his first few weeks in office.
January was another positive month for the equity markets. The markets have continued to trend higher based on expectations that the new administration will reduce taxes, reduce regulations, and spend on infrastructure.
Small cap stocks were flat for the month, underperforming the mid and large cap space.
International equities outperformed the U.S. markets in January, and have more potential for upside long term, based on valuations.
Our long-term outlook for emerging market equities remains positive. This was borne out in January returns, up over 5%.
Financial markets have priced in expectations of a fiscal stimulus, higher interest rates, rising inflation, and a stronger U.S. dollar.
The Fed raised short-term interest rates 0.25% in December. Rates were left unchanged on February 1. The committee forecasts 3 additional rates hikes in 2017, presuming the economy and job market continue to improve.
Despite OPEC's agreement to cut production in November, oil prices have remained in the low $50s per barrel for the month.
It was an uneventful month in the U.S. bond market, with rates remaining virtually unchanged.
The high-yield bond market continued its multi-year rally, up another 1.45% in January.
- This information has been compiled using data and other statements of fact derived from sources which we believe to be accurate and reliable. However, such data and other statements of fact have not been verified by us, and we do not make any representations as to their accuracy or completeness. Any opinion expressed herein reflects our judgment at this date and is subject to change.