The first few trading days of January have reminded investors that we’re still operating in a manic market. Each of the major indexes has closed at a new all-time high in January, and as of the market opening on Jan. 8, all the indexes were positive for the year. That could confirm the January effect, which would keep the bull market running.
However, there have been several red days to dampen the bullish sentiment. Many of the same themes from 2025 continue to bubble up: interest rates, earnings durability, and valuation risk. Growth is still growth, but it looks like a year where many stocks may rally more on liquidity and capital gains as opposed to earnings growth and dividend payouts.
