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You might think S&P 500 stocks need to take a breather in January. But some like Tesla show what they can really do in the first month of the year.
Nine S&P 500 stocks, including the newly inducted Tesla (TSLA) plus communications services champs Netflix (NFLX) and Facebook(FB), kick off the new year in style. All these stocks jumped four-times or more than the S&P 500 in January the past five years on average, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
In fact, many of the top stocks in January are market leaders. Tesla and Chipotle Mexican Grill(CMG) are on IBD's Leaderboard. And perennial January winner, Amazon.com (AMZN), is on the IBD 50.
"Expectations for improving news on the vaccine and economic fronts as 2020 wore on were rewarded if one used pullbacks in the stock market to take action and put money to work in sectors that would likely benefit from a positive viewpoint looking out into and through next year," said Scott Wren, senior global market strategist at Wells Fargo Investment Institute.
Topping The S&P 500 Isn't Easy In January
Keep in mind, too, topping the market by this much is no small feat in January. It's already a solid month for S&P 500 stocks.
The S&P 500 jumped an average of 2% in January the past five years. And traditionally, the first month of the year is the sixth best, says "Stock Trader's Almanac." The S&P 500 rose 1.1% on average in January since 1950.
And it's done even better. The S&P 500 jumped 7.9% in January 2019 and 5.6% in January 2018. But with that said, January 2020 was a bit disappointing, with the S&P 500 down 0.2%.
But some S&P 500 stocks tend to deliver like clockwork in January.
Looking At The S&P 500 January Winners
Netflix puts up huge gains in January, traditionally. The streaming giant's stock jumped an average 13.7% in January the past five years. That's a bigger gain than any other S&P 500 company. Investors, in part, look forward to Netflix's annual subscription and profit tallies released in January.
When Netflix reports 2020 results on Jan. 19, analysts think it will show 53% higher adjusted profit per share, of $6.30. Additionally, analysts think Netflix's revenue will hit $24.9 billion in 2020, up 23% from 2019.
What about Tesla? The electric-car maker's shares rose 11.8% in January the past five years, on average. Annual vehicle production numbers, revenue and profit are key data points for investors. Analysts usually have high hopes each year. Tesla typically reports annual results in late January. And for 2020, analysts think Tesla's adjusted profit per share will soar nearly 6,000% to $2.41. Revenue is seen jumping more than 25% to $30.8 billion for the year.
But Tesla jumped more than 740% in 2020. How can it rise by much more?
Does A Great 2020 Doom The S&P 500 In January?
The S&P 500 just jumped 16.3% in 2020. That's 60% better than a typical year for the popular index. And it ended the year at a new closing high, something it's only done eight times in history, says Howard Silverblatt, index strategist at S&P Dow Jones Indices.
But strength is a good sign. A strong finish bodes well for the future, says Ryan Detrick, chief market strategist at LPL Financial. He found when the S&P 500 gains 10% or more in the last two months of the year, the S&P 500 gained the following year 100% of the time since World War II. Specifically, Detrick found the S&P 500 put up an 18% gain, on average, in the year following a 10% rise in the last two months of the previous year.
And some could kick off in January. "A big end of year rally could have bulls smiling in 2021," Detrick said.
Top S&P 500 Stocks In January
Sources: IBD, S&P Global Market Intelligence, * January in the past five years
SOURCE: IBD
Quotes For NASDAQ-100 Index
SOURCE: NASDAQ
Nine S&P 500 stocks, including the newly inducted Tesla (TSLA) plus communications services champs Netflix (NFLX) and Facebook(FB), kick off the new year in style. All these stocks jumped four-times or more than the S&P 500 in January the past five years on average, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
In fact, many of the top stocks in January are market leaders. Tesla and Chipotle Mexican Grill(CMG) are on IBD's Leaderboard. And perennial January winner, Amazon.com (AMZN), is on the IBD 50.
"Expectations for improving news on the vaccine and economic fronts as 2020 wore on were rewarded if one used pullbacks in the stock market to take action and put money to work in sectors that would likely benefit from a positive viewpoint looking out into and through next year," said Scott Wren, senior global market strategist at Wells Fargo Investment Institute.
Topping The S&P 500 Isn't Easy In January
Keep in mind, too, topping the market by this much is no small feat in January. It's already a solid month for S&P 500 stocks.
The S&P 500 jumped an average of 2% in January the past five years. And traditionally, the first month of the year is the sixth best, says "Stock Trader's Almanac." The S&P 500 rose 1.1% on average in January since 1950.
And it's done even better. The S&P 500 jumped 7.9% in January 2019 and 5.6% in January 2018. But with that said, January 2020 was a bit disappointing, with the S&P 500 down 0.2%.
But some S&P 500 stocks tend to deliver like clockwork in January.
Looking At The S&P 500 January Winners
Netflix puts up huge gains in January, traditionally. The streaming giant's stock jumped an average 13.7% in January the past five years. That's a bigger gain than any other S&P 500 company. Investors, in part, look forward to Netflix's annual subscription and profit tallies released in January.
When Netflix reports 2020 results on Jan. 19, analysts think it will show 53% higher adjusted profit per share, of $6.30. Additionally, analysts think Netflix's revenue will hit $24.9 billion in 2020, up 23% from 2019.
What about Tesla? The electric-car maker's shares rose 11.8% in January the past five years, on average. Annual vehicle production numbers, revenue and profit are key data points for investors. Analysts usually have high hopes each year. Tesla typically reports annual results in late January. And for 2020, analysts think Tesla's adjusted profit per share will soar nearly 6,000% to $2.41. Revenue is seen jumping more than 25% to $30.8 billion for the year.
But Tesla jumped more than 740% in 2020. How can it rise by much more?
Does A Great 2020 Doom The S&P 500 In January?
The S&P 500 just jumped 16.3% in 2020. That's 60% better than a typical year for the popular index. And it ended the year at a new closing high, something it's only done eight times in history, says Howard Silverblatt, index strategist at S&P Dow Jones Indices.
But strength is a good sign. A strong finish bodes well for the future, says Ryan Detrick, chief market strategist at LPL Financial. He found when the S&P 500 gains 10% or more in the last two months of the year, the S&P 500 gained the following year 100% of the time since World War II. Specifically, Detrick found the S&P 500 put up an 18% gain, on average, in the year following a 10% rise in the last two months of the previous year.
And some could kick off in January. "A big end of year rally could have bulls smiling in 2021," Detrick said.
Top S&P 500 Stocks In January
| Company | Ticker | Avg. Stock % Ch. In January* | Sector | Composite Rating |
|---|---|---|---|---|
| Netflix | (NFLX) | 13.7% | Communication Services | 99 |
| Tesla | (TSLA) | 11.8% | Consumer Discretionary | 99 |
| (FB) | 10.4% | Communication Services | 94 | |
| ServiceNow | (NOW) | 10.3% | Information Technology | 96 |
| DexCom | (DXCM) | 9.8% | Health Care | 77 |
| Chipotle Mexican Grill | (CMG) | 8.9% | Consumer Discretionary | 87 |
| Amazon.com | (AMZN) | 8.8% | Consumer Discretionary | 94 |
| Charter Communications | (CHTR) | 8.2% | Communication Services | 79 |
| Seagate Technology | (STX) | 8.0% | Information Technology | 82 |
SOURCE: IBD
Quotes For NASDAQ-100 Index
SOURCE: NASDAQ
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