January's Stock Market Winners: Can They Keep It Up?

According to Yale Hirsch, the founder of the Stock Trader's Almanac, "As goes January, so goes this year."

‍
The S&P 500 is up 5% in the first month of the year, after a poor performance in 2022. The Nasdaq, which is heavy on technology stocks, has gained 9%.

‍
Get a head start on the day with a morning briefing on the latest news and exclusive commentary from Barron's and MarketWatch writers.
Salesforce is leading the comeback among some of the worst hit companies by the market slump last year. The tech giant is up 24.2% since Jan. 1, helped higher by a big round of job cuts and the arrival of a slew of activist investors. Salesforce Gains Another Activist InvestorElliott Management is the latest agitator for change at Salesforce. It plans to nominate a slate of directors to the software giant’s board.Continue reading.

‍
Elliott Management, an activist investor, is pushing for change at Salesforce. It plans to nominate a slate of directors to the software giant’s board.
Other companies that had a good month include Micron Technology, which was up 24.3%, and Dow Inc., a chemicals company that gained 17.1%. This was the best month for both companies since 2020.

‍
It appears that the S&P 500 may have hit a bottom in mid-October. This may not be a coincidence, as the International Monetary Fund upgraded its forecasts from that month. Whereas a world recession was seen as a risk just a few months ago, it now appears unlikely. Despite anecdotal evidence of job cuts, the overall labor market still looks strong. If that keeps inflation sticky over the next few months, the Federal Reserve will have to keep rates higher for longer. That's the main question for Chairman Jerome Powell at Wednesday's press conference. The Federal Reserve will monitor the situation closely as it seeks to keep inflation in check.

‍
Other factors could also keep prices rising faster. Energy prices could spike back up. China’s reopening after years of Covid-19 lockdowns could be bumpy, possibly disrupting supply chains again.

‍
Since officials eased Covid restrictions, the country's stocks have increased by 50%. This is good news for Alibaba, Yum China, and other companies.
‍
The global economy is looking up, according to the International Monetary Fund. The IMF has revised its forecast for global growth upwards, and now believes that a recession is unlikely. The U.S. economy is predicted to grow 1.4% this year, down from 2% in 2022, but slowing inflation and resilient consumers have brightened worldwide prospects.

‍
The U.S. economy is predicted to grow 1.4% this year, down from 2% in 2022. Slowing inflation and resilient consumers have brightened worldwide prospects. However, some economists are predicting a slowdown in the U.S. economy due to the current trade war with China. IMF Chief Economist Pierre-Olivier Gourinchas has said that a global recession is unlikely. This is a different tone from the outlook given in October, though resurging inflation and an escalation in Russia’s war in Ukraine remain risks.

‍
Ford Motor Company has cut prices on its Mustang Mach-E electric vehicle (EV), following a similar move by Tesla. The reduction will allow the base model Mach-E to qualify for a purchase tax credit. Ford said the price cuts are to stay competitive as the supply chain for its electric vehicles comes online, seizing on streamlined costs. The Wall Street Journal reported that this move by Ford is likely in response to Tesla's recent price reductions on some of its own models.

‍
After Tesla made a similar move, Ford has now reduced the price of its base model Mach-E in order to make it eligible for a purchase tax credit.
analyst Adrian Yanoshik has upgraded shares of Tesla to Buy from Hold, citing affordability and demand concerns as well as supply-chain risks. He believes that softer demand in 2023 is becoming increasingly likely.

‍
Memory chip prices have been falling sharply and are expected to continue to fall in the first half of 2023. This is putting pressure on the semiconductor industry, which has already cut spending and jobs. Wall Street is nervous about the semiconductor industry after Intel reported demand struggles and swelling inventories.

‍
What's next for the major players in the semiconductor industry? Micron Technology, SK Hynix, Western Digital, and Kioxia Holdings have all revealed plans to cut spending on capacity expansion or to lower output in order to address a worsening supply glut. However, Samsung bucked the trend Tuesday by reporting its weakest quarterly profit in 8 years. Despite the slowdown, Samsung did not cut capital expenditure plans for 2023 and said it sees demand recovering in the second half.
Despite the slowdown, Samsung has not cut capital expenditure plans for 2023 and said it sees demand recovering in the second half. This is in contrast to its peers, who have taken measures to reduce their spending.

‍
Johnson & Johnson shares fell 3.7% on Monday after a panel of federal appeals judges rejected its effort to push lawsuits over its talc-based baby powder products into bankruptcy court. The opinion raises questions about the future of the more than 40,000 lawsuits claiming that J&J's talc products caused cancer. Johnson & Johnson has vowed to challenge the court’s decision.

‍
The opinion raises questions about the future of the more than 40,000 lawsuits claiming that J&J's talc products caused cancer. The opinion could have implications for other companies that make products containing talc, and it will be interesting to see how the courts handle these cases in the future.
The future of Johnson & Johnson's talc strategy and new publicly traded company, Kenvue, remains unclear. Cantor Fitzgerald analyst Louise Chen wrote Monday that investors are asking, among other things, whether the development could impact or delay plans for the Kenvue spin out.

‍
Super Bowl fans have something to cheer about this year, even if their favorite team doesn't win. According to Wells Fargo's annual survey, prices for party favorites like chicken wings and avocados have dropped by double digits, even though food prices have gone up by 10.4% over the past year. So there's no need to break the bank to enjoy the game.

‍
The Eagles are currently two-point favorites over the Chiefs in the Super Bowl, according to DraftKings Sportsbook. The cost of a 30-second Super Bowl ad on television has gone up to $7 million this year, according to Front Office Sports. This is a significant increase from the $5.2 million that was charged for ads during the 2019 Super Bowl.

‍
This month, join the Barron's Daily virtual stock exchange challenge and show off your skills. With prizes to be won, it's a great way to test your investment strategies and see how you stack up against other investors. So sign up today and see if you can top the leaderboard. We'll be starting a new challenge each month, inviting newsletter readers to build a portfolio using virtual money and compete against the Barron's and MarketWatch community.

‍
The challenge will start with everyone having the same amount of money. They can trade as often or as little as they want. The leaders will be tracked, and at the end of the challenge, the person whose portfolio has the most value will be announced in The Barron's Daily newsletter.