The S&P 500 was down almost 3% in January as a variety of negative factors dominated headlines throughout the month.

The month began with concerns about Greek elections and falling oil, and neither of those concerns really abated as the month progressed. The January 25th Greek elections, won by a leftist party that is opposed to Greek austerity measures, rekindled concerns about a Greek exit from the euro zone that have existed for the past several years but had been placed on the “back burner” lately.

Continued imbalances in global supply/demand for oil caused market participants to further question what the oil market could be indicating about the overall global economy. Domestically, we have begun to see some layoffs in the oil industry as a result of lower oil prices.

There were other headwinds throughout the month, including:

  1. Disappointing durable good orders;
  2. Shootings/Hostage Situation in Paris;
  3. Poor bank earnings

Finally, the Fed released minutes that sounded rather upbeat about the economy; however, the market interpreted this as a sign that the Fed could be poised to raise interest rates, possibly as early as this summer.

There were some positives in the month. The European Central Bank proceeded with its “Quantitative Easing” program, which was well-received by the market. We believe that, with our Fed having done its part over the past several years, markets expect global central banks to pick up the slack. So far, we have seen just that out of Europe and Japan.

Employment numbers in January were generally positive, as the unemployment rate dropped to 5.6%. However, this was partially offset by falling wage growth.

Finally, many key technology companies reported stellar earnings, which gave markets something positive to focus on among the sea of negativity throughout the month.

So far, February has started off strong, in part due to oil strength/stabilization and generally encouraging corporate earnings.

Thanks for reading, and congratulations to any New England Patriot fans who might be reading!

Carl Beck

February 5, 2015