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After a tumultuous 2022 and mixed earnings reports, January saw the market make a very strong start for the year. There was better than expected GDP growth, increasing evidence of slowing inflation, and most important in the market's view, expectations of the reduced pace of rate hikes and the size of those hikes. The S&P 500 rose a little over 6% for the month, its best January since 2019. Small caps performed relatively better, with the S&P Mid Cap 400 and S&P Small Cap 600 both up 9%.

International equities outperformed US equities, boosted by a weakening US Dollar, the reopening by China, and unexpected economic growth in Europe.

The S&P 500 sectors showed sharp reversals from last year. Consumer Discretionary became the leader. Staples, Utilities, and Health Care lagged.

Yields declined given the expectation of a slowing pace of Fed rate hikes and evidence of a slowing economy. U.S. Fixed Income had price gains across the board.