The S&P 500 broke above 1,850 earlier today, which puts it on track for a new record-high close and erases the dip earlier this month that had threatened to give the January indicator – as goes January, so goes the rest of the year – a bearish tinge.
But if January does say anything about the stock market for 2014, expect a continuation of 2013: Last year showed a clear preference for economically sensitive areas of the market as the U.S. economy showed signs of improvement – along with health-care stocks – and this year is showing a similar tendency.
Tech stocks and financials are among the three winning sectors in the first 10 trading days of the year. And health care leads the way, after surging nearly 39 per cent last year.
As for the laggards, economically defensive areas of the market – along with resources – lagged last year and they're struggling again. Telecom stocks are the worst performers in 2014, trailing everything last year too. Energy stocks are also down.
The one big difference so far: Consumer discretionary stocks. They led the market higher last year, with gains of 41 per cent. This year, they're down 1.7 per cent.
But agreed: The first 10 trading days of 2014 might be more of an echo from last year than an indication of what's coming.