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Fatal Attraction was in theaters the last time the S & P 500 did it well in January



The S & P 500 index showed the best January in the last three decades. In fact, the profit from the main benchmark was not so impressive in January since Fatal Attraction made its debut in the theater.

S & P 500

SPX, + 0.86%

according to FactSet, it grew by 7.9% in the best January since 1987. The index profitability index in January 1987 was 13.2%. Dow Jones Industrial Average

DJIA, -0.06%

on Thursday, the final trading session of the month added 7.2%, which is the best indicator of January, since in 1989 it grew by 8% in January, according to Dow Jones Market Data.

The S & P test on the wide market showed its best month overall since October 2015, while January showed the best monthly increase in Dow since March 2016.

Meanwhile, the Nasdaq Composite Index

Comp, + 1.37%

It was the best January since 2001, with a monthly increase of 9.2%.

Check out: MarketWatch Intraday Market Snapshot

This was made possible by a significant change in appetite for stocks, given that December was the worst month for the three main stock indicators after the 2008 financial crisis that shook global markets.

What changed? Not much and quite a bit.

Although many of the catalysts that led to a fall in the market persist, at least the damage caused by the shares made the shares attractive enough for investors seeking to buy out damaged assets with the expected discounts, market participants said. According to one of the evaluation indicators, price-earnings ratios, stocks have become much cheaper: P / Es, based on 12 months for the S & P 500, are at 17.66, compared with 23.09 a year ago (see the chart below ):

Source: FactSet

In addition, in recent weeks, the Federal Reserve has taken a more relaxed position, culminating in the renewal of policy on Wednesday, when the central bank announced that it intends to be “patient” with its plans to normalize the policies of the crisis era.

MarketWatch First Double: Trump could not get his border wall, but gets a sea of ​​liquidity the Fed

Custom: This is the year when the authority of the Federal Reserve finally died.

Good or bad, but all that seems to support the increase in purchases of assets perceived as risky, as stocks. In addition to these factors, corporate quarterly results were not as bad as many investors feared.

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