December is over and Santa Claus seems not to have made his stellar appearance on Wall Street as we did not see his well-known Santa Rally this year. But, for stock market optimists who were hoping to take it easy in January, the week and the year are off to a positive start. In fact, and despite Jerome Powell acting like the Grinch, leading investors to trim some gains in the latter part of December, the S&P 500 closed out the memorable 2024 with an impressive gain of more than 20%.
Why is January so important? In particular, in this 2025 it is largely due to politics. The 20th Amendment to the U.S. Constitution moved the date of the inauguration of the president and the convening of a new Congress from March to January. Market performance in January, especially in post-election years, reflects investors' assessments of how government policies are likely to affect the economy and investments.
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