#237: +4% for January?

Massive thank you & welcome to 38 new wise apes joining the community since our last post!

In this email:

• It’s inauguration month - how does that look historically for stocks?

• What’s the key focus for January in macroeconomics?

• Earnings to watch out for

How does inauguration month look historically for stocks??

Above is the S&P 500's return (specifically SPY 0.00%↑) in the first 30 days after inauguration, based on the five most recent inaugurations (from Bush's first inauguration in 2001 to Biden's in 2021)

A few observations:

• Whether the newly elected is Democratic or Republican (based on this small sample size) does not show strong hint to an “up or down month”

  • ‘01 and ‘09 were unusual — namely, the dot com bubble and the great financial crisis

• That said, one could point to most three inauguration months showing green and the fact that Trump’s inauguration month was the greatest positive (~4.3%) to think that this coming inauguration month could be positive and of similar magnitude

  • IMO: though probable, that is a dangerous conclusion — there are different macroeconimic and policy background factors that govern '17 and now that we should consider

Key macroeconomics in January

Below are key US events that may take a huge effect on the S&P500 leading up to Trump’s inauguration out to one month post-inauguration:

• 1/7 (Tues): JOLTs

• 1/10 (Fri): Nonfarm payrolls & unemployment rate

• 1/15 (Wed): CPI

• 1/20 (Mon): Trump inauguration

• 1/29 (Wed): Fed interest rate decision

Market is still spooked from Fed’s hawkish announcement in December.

Sure, S&P 500’s recovered this past week, but for the market to test new highs and spike higher we’d need to see promisingly low JOLTs, low nonfarm payrolls, high unemployment rate, or lower CPI — or any combination in between — to see a rate-cut-optimism driven rally in equities

January earnings I will be watching

Leading up to Trump's inauguration, I see the below setting the tone for the broader US equities markets:

• 1/9 (Thurs): Walgreens

• 1/10 (Fri): Delta Air Lines

• 1/15 (Wed): JPMorgan

What’s interesting is we won't be able to get a more updated hint at the tech sector — nonetheless, QQQ 0.00%↑ will likely move in correlation with SPY 0.00%↑

TOGETHER WITH: Stock Calendar App (Sponsored)

“Stock calendar is a macOS menu bar app that displays upcoming stock events, such as dividends and stock splits. You can track updates on starred stocks!”

✨ Track the market with the Stock Calendar App!

Ask a Wise Ape is a reader-supported newsletter. Since you're here already, consider signing up for a paid subscription for $5/month which will give you access to the full archive (posts are archived after three months). Thank you for your contribution!

It’s a crazy world - we Apes will keep you informed.

---

Disclaimer

The information provided on Ask a Wise Ape (the "Substack") is strictly for informational and educational purposes only and should not be considered as investment, financial, trading, or any other type of advice. Investing in financial markets involves substantial risk, including possible loss of principal. Past performance is not indicative of future results. Ask a Wise Ape makes no representations or warranties about the completeness, accuracy, reliability, suitability, or availability of the information provided.

This Substack may contain links to external websites not affiliated with the author, and the accuracy of information on these sites is not guaranteed. Nothing contained in this Substack constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments. Always seek the advice of a qualified financial advisor before making any investment decisions.