January is often a great fortune teller. Since 1900, when the Dow is up in January, median gain for the year is 10.4%. When it is down in January, median gain for the year is .3%.
The market got off to a great start, up over 1.5% during just the first half of the first trading day of the year. The ISM's gauge of manufacturing showed growth for a fifth straight month, rising to 55.9 in December from 53.6 in November. Economists had expected a more modest uptick to 54.1.
Additionally, the U.S. dollar fell against both the yen and the euro. A weaker dollar makes U.S. products less expensive in foreign markets. Additionally, a weaker currency makes foreign products more expensive in the U.S., leading Americans to buy local products, which supports the national economy.
More importantly, the Labor Department's report on employment comes out Friday, and there are high expectations. The buzz is that this report may show jobs were actually added to the economy in December — the first time that would've happened in two years. Estimates are around 30,000 to 40,000 new positions.
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