January is the #1 S&P 500 Index and Nasdaq best performing month in pre-election years. We are mindful that all Pre-Election years since 1949 have an average gain of 16.8%, the ones after a mid-term bear market like 2022 average 20.3%. That history suggests that the mid-term bear market bottom should be in. There are some encouraging signs.
Unlike 2008 consumer credit is still healthy with delinquency rates much lower and corporations seem to be better able to manage a credit contraction with a significant amount of cash and better staggered credit maturities and banks were more extended. A set up for a mild recession but not a steep serious one. However, it may last longer than most expect.
Our December 2022 Market Commentary provided by Derwood S. Chase, Jr. Founder & Chairman Emeritus.