The government reopened and earnings season rolled forward, but a polar vortex slowed momentum in the Midwest on Tuesday and Wednesday this week. Freezing in a different way, the Federal Reserve Open Market Committee held rates steady and signaled a more accommodative stance. The markets responded favorably to this as higher rates will act as a drag on earnings. Despite concerns that the Fed tightened too fast, the economy continues to churn out strong data – evidenced by January’s healthy employment report. In global news, Venezuela is in a state of crisis as opposition leader Juan Guaidó, who has US support, disputes the controversial election of President Nicolas Maduro.
The markets breathed another sigh of relief as the Fed held rates steady and fears of a global slowdown subsided. With another week of gains, the S&P 500 knocked out its highest January return since 1987 after a sharp, but not unusual, drop at the end of 2018. With the pause in rate hikes, the US dollar softened giving international stocks a boost. Emerging markets experienced a solid rebound in January (but still have a wide gap to cover to catch up to US stocks on a one-year basis). Bond funds had a relatively strong start to the year – prices generally rising with the downward slide in interest rates. Commodities also jumped with rises in both oil and gold prices last month.