January Market Pulse

Have the investment markets pressed F5 Refresh this new year? As promising and raving as October and November were, 2022 wound down with another loud “thump” in the markets, as evidenced in the 3.12 edition of the Market Pulse. This left many wondering what 2023 has in store. More of the same lumpiness of 2022? Or the 2021 euphoria? Or perhaps something more subdued and middle of the road?

It’s been quite the whipsaw, with many of December’s red numbers turning green in January, and tremendously so! Looking back a year ago, we saw the exact opposite happen, with a green December 2021 turning into a red January 2022. Given what we know happened throughout 2022’s investment landscape, is it outside the realm of sound judgement to believe a green January is logically inferring generally strong investment outcomes in 2023?

It may very much be so. Or perhaps not. Of course, only time will tell when we check back in 12 months. In the meantime, it behooves investors to take readings of possible waves on the horizons while navigating investment portfolios in a manner to minimize the turbulence along the investment journey.

Case in point, in Louis James’s January 28th Speculator’s Digest email(1), he was generous in doling up observations about, as he puts it, recent “bellwether corporate earnings reports:

• Microsoft lived down to expectations and delivered gloomy outlook.

• GE missed, blaming its renewable energy division.

• Tesla beat on most metrics and offered very upbeat guidance (orders at 2x production).

• Sherwin Williams served up more gloom.

• Intel missed on almost every line – and delivered the gloomiest outlook of them all.”

While he did include one positive note of five, one can’t help but reflect about the upbeat performance of the markets in January in general. Besides, what about all the corporate workforce layoffs announcements of late? A Business Insider headline recently reminded that:

“The month of January 2023 has already seen more tech layoffs than the entire first half of 2022 combined” (2)

Of course, these layoffs aren’t limited to the tech sector. For instance, Hasbro, the toymaker, announced on January 26th that it’s cutting 15% of its workforce this year.(3)

Let’s face it, what company dismisses workers in good times? It’s a headscratcher, no doubt. Many businesses continue to present gloomy outlooks and yet the investment markets were mostly green in the same month. Seems to be more proof that investment markets may not be as efficient as some argue. But that’s too lengthy a debate for these pages.

It’s foolhardy to believe that investment paradigms have not been shifting over the years, especially since the turn of the millennium. The “set and forget” strategy of yesteryear is akin to investing with crossed fingers. If you find yourself trapped in such thinking, it’s time to connect with us for an information discussion about how we may be better suited to manage your money into the future.

All My Best,

Adrian Harasymiw Investment Advisor Pinnacle Sovereign Investments of ACPI

P.S. To review the January market numbers or download a PDF copy of this commentary, head over to the Monthly Market Pulse page on our website.

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(1.) Speculator's Digest - Beware: Brutal Bull Trap Likely - January 28, 2023

(2.) Business Insider

(3.) Reuters