Market Commentary – January 2012

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Posted on February 1st, 2012

The Markets

Believers in the January indicator, rejoice! If the first month holds any significance as a barometer of how equities might perform during the rest of the year, January clearly got 2012 off to a good start. For the first time since October 2010, the Nasdaq had the strongest monthly gains of the four domestic indices; it’s now up more than 20% from its 2011 low last October and is just 60 points away from its 2011 closing high. The small caps of the Russell 2000 weren’t far behind for the month, and their 30% gain since last October has outpaced the rest of the domestic indices. The blue chips of the S&P 500 and the Dow industrials had their best January since 1997, and are up more than 19% and 18% respectively since last October. Even the Global Dow saw renewed investor optimism despite a flurry of credit rating downgrades in Europe.

Demand for U.S. Treasuries remained steady, especially after the Fed forecast low interest rates through late 2014. The euro continued to suffer, hitting $1.27 at one point before rebounding to end the month just under $1.32. Oil prices hovered around $100 a barrel, and after retreating for months last fall, gold turned upward once again to end January at roughly $1730 an ounce.

Market/Index 2011 Close Prior Month As of 1/31 Month Change YTD Change*
DJIA 12217.56 12217.56 12632.91 3.40% 3.40%
Nasdaq 2605.15 2605.15 2813.84 8.01% 8.01%
S&P 500 1257.60 1257.60 1312.40 4.36% 4.36%
Russell 2000 740.92 740.92 792.82 7.00% 7.00%
Global Dow 1801.60 1801.60 1915.01 6.29% 6.29%
Fed. Funds .25% .25% .25% 0 bps 0 bps
10-year Treasuries 1.89% 1.89% 1.83% -6 bps -6 bps

*Equities data reflect price changes, not total return.

 

Source: Broadridge