• 
• See all for FXstreet.com
• View Print Version

FXstreet.com (Barcelona) - Steadfast gains in the US stock market to start 2013 were quickly followed by a turnaround Thursday as yesterday saw the S&P 500 reverse any prevailing intraday gains to finish the day -0.21% lower after the FOMC minutes hinted the possibility of an earlier policy tightening. Following the +2.5% rally on Wednesday the market was perhaps due for a breather though after one of its strongest starts in history.

"With the US debt ceiling deadline simmering in the background it is perhaps too early to say if the market will rally further from here but if history was any guide then there is some statistical evidence of January being a positive month for markets." notes Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank. Indeed the infamous 'January effect' comes to mind, which has long been used to describe stronger asset returns in the first month of the year.

Using S&P 500 monthly averages since data started in 1928 the average price return for all January months was +1.73%. January also turns out to be the highest monthly return of all calendar months followed by also decent returns in July (+1.26%). The last 84 January months have produced 59 positive outcomes. January also has the narrowest range for returns with a historical maximum and minimum return of +9.2% and -6.8%, respectively. September and October have historically produced negative monthly returns with the latter also affected by the 20% decline in 2008. "Clearly we are not taking a view here based on some historical statistics but it does tell us something about seasonal patterns in markets." they add.

Related Forex and Currencies Articles

• 
  U.S stocks rise for fourth week on sentiment data; Dow gains 0.80%
  5/17/2013 01:27 PM
• 
  Forex - Dollar gains on sentiment data, Fed comments
  5/17/2013 12:27 PM
• 
  Forex - USD/CAD gains on soft Canadian inflation data
  5/17/2013 11:26 AM