News & Our Thinking


“As Goes January, So Goes the Year” – Yale Hirsch

21 February 2023

In our latest Market Insights video, Ward Brown, Chairman of the Argent Investment Committee, discusses the potential impacts of mixed economic data for the trajectory of the stock market in 2023.

Hello, I’m Ward Brown. January and February can be pretty dreary months here in Saint Louis. It’s a pretty nice day today.  

The month of January is named for the Roman God Janus. In ancient Roman religion and myth, Janus is the God of beginnings and transitions. Among other things, Janus is usually depicted as having two faces, which we think is a fitting reference to the current stock market. Let’s take a look.

I probably don’t need to remind anyone of how tough a year it was for investors in 2022. However, 2023 is off to a really solid start. That’s welcome news, particularly given that strong gains like we experienced in January tend to be followed by above average returns in the following 11 months. That remainder of the year success is particularly noteworthy when coming off a bad prior year like we had in 2022.

Since World War II, there have been 12 times when the stock market had a positive January following a down prior year. In 10 of those 12 years, the market was even higher at year end, with an average gain of about 16%. It’s pretty good. Of course, data like this needs to be taken with a grain of salt, and it wouldn’t be much of an investment commentary without mentioning that. Past performance is no guarantee of future results.

But it is interesting to note that January performance was led by stocks and industries you would think would be suffering given all the recession talk: semiconductors, home builders, consumer retailers and a bunch of industrials. It’s pretty unusual, but we think it says a lot about what investors believe about future economic growth.

Here is where the two faces of Janus ties in. On the one hand, lots of key economic data points to a continuation of the deterioration we saw in 2022. Interest rate increases are not yet done and the economy is clearly slowed. You would think home builders, for example, might be weak, not stronger. On that news, got some Mardi Gras for you.

On the other hand, the deterioration we have experienced is at a very low bar of evidence for economic improvement. Here’s the good side in the other face. Indeed, some of their areas of the economy are already proving more resilient than expected. Jobs data is quite strong, handily beating expectations, and inflation while still elevated, is trending lower.

Looking at home builders again, perhaps that is the good news investors are focusing on: that buyers are employed and that lower inflation creates more confidence in making a home purchase.

In addition, we can’t overlook the impact of corporate earnings, the ultimate driver of stock market growth. We are currently in the midst of companies reporting their earnings for the fourth quarter. Overall, they’ve been okay, not great, but okay. Earnings are slowing, but a lot of companies are still beating Wall Street estimates, even if at a slower pace than last year. That’s a nice surprise for a low bar market.

Questions will remain on the direction of the economy and whether the gains of January can continue to build. Time will tell. At Argent, however, we still see the glass as half full and continue to find numerous opportunities where we believe the current market is mispricing the underlying long term value of a business. For patient long term stock market investors like us, that’s a very good thing.

Thanks for watching. 

Disclaimer: Performance returns cited represent past performance, which does not guarantee future results. Returns assume reinvestment of dividend and interest but returns do not reflect the effect of taxes and/or fees that an investment would incur. References to specific company securities should not be construed as investment advice. Not all Argent clients may own each company’s stock discussed. Argent portfolio managers may recommend the purchase or sale of these and other securities for their client’s accounts.  A list of all stocks recommended by Argent during the past year is available upon request.  Some data represented in this article is derived from non-affiliated sources Argent deems reliable. However, Argent does not perform any independent research to determine the accuracy of such information.  Please visit our compliance page for additional details and disclaimers.