Equity markets rebounded in January erasing volatility residue from the end of 2018. Earnings released during the month were mixed but yielded optimism for various sectors and industries. January results posted the best beginning of any year since 1989, a dramatic reversal from what was the worst December since 1931.
Major stock indices experienced among the most dramatic daily point swings ever in January as major indices were driven by bearish sentiment to bullish sentiment in a matter of hours. Such extremes create confusion among traders and analysts, making it difficult to determine where valuations and stock prices might be headed.
Some analysts believe that equities are being driven by stock selection versus economic data, as a focus on earnings intensifies with economic data becoming muted. A growing demand for value stocks occurred in January as dividends and balance sheets became sought after rather than growth.
Sources: Reuters, Bloomberg
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