Intraday Market Thoughts

The Years Equities Declined in January

by Ashraf Laidi
Jan 24, 2014 18:11

As January deepens losses for most major equity indices, here is a look at the years when US equities, measured by the Dow Jones Industrials index, had a negative January. In fact, the last time we had a negative January was in 2010, when the Eurozone crisis was kicked off and US stocks had a Flash Crash in May. The bust of the technology bubble kicked off in 2000, which also saw a 7% decline in January. Another spectacular year of spectacular losses was 1998, when the Asian currency crisis, coincided with damage in Russia and Brazil, a classic case of emerging markets collapse. Finally, 1990, the year of the Savings & Loans crisis in the US and the 1st Gulf War, started off with a negative January before leading to a 17% decline in Aug-Nov. This analysis does not necessarily imply a decline in the whole of 2014, but 2 or 3 months of sharp declines, including the much-awaited decline of at least 10% from peak to trough in US equity indices. 

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The Years Equities Declined in January - Jan Effect Dow Jan 24 (Chart 1)

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