Three Stocks to Watch During the Typically Bullish January

Three Stocks to Watch During the Typically Bullish January

January has historically been a strong month for stocks, as some investors reenter the market after selling off some of their holdings at the end of the previous year. This period of bullishness is often referred to as the “January Effect.”

On January 6, US stocks saw their first big rally of the year, with the Dow Jones Industrial Average climbing 2.13%, the S&P 500 gaining 2.28%, and the Nasdaq Composite rising 2.6%. This marked the best day for these indices since late November and December 2022.

With this bullish sentiment in mind, here are three US stocks to watch this January:

1. Amazon.com (AMZN)

Reason to watch: Despite macroeconomic challenges, Amazon remains a strong pick. JP Morgan has named Amazon its top internet stock, forecasting resilience in 2023. However, the company announced 18,000 job layoffs, exceeding earlier expectations.

Recent performance: Despite the layoffs, Amazon’s stock has surged 2.9% on Tuesday and 5.8% on Wednesday.

Outlook: As the second-largest private employer in the US, Amazon’s stock remains strong despite the ongoing restructuring.

2. Tesla (TSLA)

Reason to watch: Tesla is moving forward with a $775.7 million investment to expand its Gigafactory in Texas. Although the company missed its delivery estimates in Q4 2022, it still reported a 40% year-over-year growth in electric vehicle deliveries.

Recent performance: Tesla’s stock rose 3.7% on Wednesday after a 1.6% drop on Tuesday.

Outlook: Despite a volatile CEO and scrutiny over the company’s Autopilot system, Tesla’s expansion plans and long-term growth prospects make it a stock to keep an eye on.

3. McDonald’s (MCD)

Reason to watch: McDonald’s has announced a restructuring plan that includes potential corporate job cuts. The company’s third-quarter 2022 report showed an 8% decline in net income, indicating that it’s facing some challenges.

Recent performance: McDonald’s stock closed up 0.6% on Tuesday but remained flat on Wednesday.

Outlook: Despite a dip in earnings, McDonald’s remains a global leader in the fast-food industry, and its restructuring plans could help improve efficiency in the long run.

Summary

January’s bullish momentum provides an opportunity to closely watch stocks like Amazon, Tesla, and McDonald’s. These companies are navigating challenges but also have the potential for strong performance, making them worthy of attention in the coming weeks.