US stock bulls are taking heart from a range of market signals pointing to an upbeat year for Wall Street, as equities sit on impressive gains despite worries that the Federal Reserve’s monetary policy tightening may plunge the economy into a recession.
Among these are equities’ positive January performance, a "golden cross" chart pattern on the S&P 500 and more stocks making new highs rather than new lows.
Such signals are far from the only indicators market participants use to make investment decisions, and they are not foolproof.
Weak outlooks for corporate heavyweights such as Amazon and Microsoft and a blowout employment number that heightened expectations for Fed hawkishness injected a fresh note of uncertainty into markets on Friday, though the S&P 500 remains up 7.7 per cent year-to-date.
However, steady improvements in gauges of momentum and sentiment in recent weeks reinforced the view among some investors that asset prices may be heading for a more benign period, after last year saw the S&P 500 lose 19.4 per cent in its biggest annual percentage drop since 2008.
“We think this is a healthy picture that is being painted here,” said Ryan Detrick, chief market strategist at the Carson Group, referring to signals such as January’s gains and the broad range of sectors participating in the rally.
The S&P 500 rose 6.2 per cent in January, driven in part by hopes that the Fed will be able to contain surging inflation without badly damaging the economy.
When the S&P 500 has advanced in January, the market has gone on to rise in the subsequent February-December period 83 per cent of the time, with an average 11-month gain of over 11 per cent, according to an analysis of data going back to World War II by CFRA Research.
An up January after a down year, however, was followed by a gain of 23.1 per cent from February to December with a 92 per cent success rate.
Despite a recent rally that may have made stocks comparatively expensive, “the track record implies that maybe we do have some upside potential", said Sam Stovall, chief investment strategist at CFRA Research.
A 'golden cross' sighting
Meanwhile, chart watchers noted that the S&P 500’s 50-day moving average rose above its 200-day moving average on Thursday, a pattern known as a golden cross.
Since 1950, the S&P 500 has produced an average 12-month return of 10.5 per cent after a golden cross formed, while the overall average annual return since 1950 is 9.1 per cent, according to Adam Turnquist, chief technical strategist at LPL Research.
However, when a golden cross has appeared as the 200-day moving average is declining — as it is now — the average 12-month return for the S&P 500 jumps to 16.8 per cent.
"The recent golden cross adds to the growing technical evidence of a trend change for the S&P 500 and further raises the probabilities of the bear market low being set in October," Mr Turnquist said in a post.
Willie Delwiche, an investment strategist at All Star Charts, said all five indicators on his bull market checklist were fulfilled in January, including upside volume and risk appetite metrics, something that did not occur once in 2022.
The January employment report was unambiguously strong and should be the start of a series of data points showing stronger activity and inflation in early 2023
Citi analysts
One of those indicators showed more stocks on the New York Stock Exchange and Nasdaq making new 52-week highs than lows — a sign that the rally is being led by a broad range of stocks, rather than a cluster of heavyweights. That happened as many times in January as it did during all of 2022, Mr Delwiche said.
However, some investors believe stocks may have gotten ahead of themselves.
Friday's data showing US employment growth accelerating sharply in January renewed the inflation concerns that hammered stocks last year and ignited bets on a more hawkish Fed.
"The January employment report was unambiguously strong and should be the start of a series of data points showing stronger activity and inflation in early 2023," analysts at Citi wrote.
"We expect this emerging trend should push back on too-dovish market pricing."
Company%20Profile
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Greatest Royal Rumble results
John Cena pinned Triple H in a singles match
Cedric Alexander retained the WWE Cruiserweight title against Kalisto
Matt Hardy and Bray Wyatt win the Raw Tag Team titles against Cesaro and Sheamus
Jeff Hardy retained the United States title against Jinder Mahal
Bludgeon Brothers retain the SmackDown Tag Team titles against the Usos
Seth Rollins retains the Intercontinental title against The Miz, Finn Balor and Samoa Joe
AJ Styles remains WWE World Heavyweight champion after he and Shinsuke Nakamura are both counted out
The Undertaker beats Rusev in a casket match
Brock Lesnar retains the WWE Universal title against Roman Reigns in a steel cage match
Braun Strowman won the 50-man Royal Rumble by eliminating Big Cass last
THE SPECS
Range Rover Sport Autobiography Dynamic
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The%20specs
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GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
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MATCH INFO
Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid
When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid
Killing of Qassem Suleimani
A German university was a good fit for the family budget
Annual fees for the Technical University of Munich - £600
Shared rental accommodation per month depending on the location ranges between £200-600
The family had budgeted for food, books, travel, living expenses - £20,000 annually
Overall costs in Germany are lower than the family estimated
As proof that the student has the ability to take care of expenses, international students must open a blocked account with about £8,640
Students are permitted to withdraw £720 per month
Avengers: Endgame
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What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
10 tips for entry-level job seekers
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- Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
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Arda Atalay, head of Mena private sector at LinkedIn Talent Solutions, Rudy Bier, managing partner of Kinetic Business Solutions and Ben Kinerman Daltrey, co-founder of KinFitz
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UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
UAE currency: the story behind the money in your pockets
EPL's youngest
- Ethan Nwaneri (Arsenal)
15 years, 181 days old
- Max Dowman (Arsenal)
15 years, 235 days old
- Jeremy Monga (Leicester)
15 years, 271 days old
- Harvey Elliott (Fulham)
16 years, 30 days old
- Matthew Briggs (Fulham)
16 years, 68 days old
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
