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Investors generally are bullish to begin a year, putting new money to work in the market and often benefitting from solid market returns in January and the first quarter. To draw that conclusion, we analyzed data collected on S&P 500 performance from 1980-2024. By our calculations, the stock market in January has advanced on average 1.0%, while the 1Q has generated average gains of 2.3%. The first quarter is fairly consistent as well, with a win percentage of 67%. This means that stock returns are positive in 1Q roughly two years out of three. To be sure, 1Q has posted its share of clunkers, including 2022, as investors fretted that the Federal Reserve had fallen behind the inflation curve. Let's also not forget 2020, when the coronavirus emerged and the S&P 500 dropped 20%. In 2009, after the collapse of Lehman Brothers and as the U.S. economy was struggling with a deep recession, stocks fell 12%. And in 2001, as the "dot-com" bear market started growling, stocks slid 12% again. Investors also pay close attention to early-year returns due to the so-called "January Effect." This axiom postulates that the market's returns in January tend to foreshadow full-year results. For example, when January returns are positive, annual returns are positive four-fifths of the time, with an average gain of 20%. When January returns are negative, full-year returns are negative two-fifths of the time, with an average decline of 16%. Of course, market fundamentals ultimately are more important to investors than the calendar. On that score, the economy is growing, profits are expanding, and interest rates appear headed modestly lower this year.

NiSource Inc. is an energy holding company whose subsidiaries are fully regulated natural gas and electric utility companies serving nearly 4 million natural gas customers and 500,000 electric customers in six states. NiSource's principal subsidiaries include Columbia Gas, a natural gas distribution holding company; and NIPSCO, a regulated gas and electric company. NiSource derives substantially all of its revenues and earnings from the operating results of these rate-regulated utilities. The company has approximately 7,200 employees. NI shares are a component of the S&P 500.

CMS Energy is a Michigan-based holding company with electric and natural gas utilities. It is the parent holding company of several subsidiaries, including Consumers, an electric and gas utility, and NorthStar Clean Energy, primarily a domestic independent power producer. Consumers owns and operates electric distribution and generation facilities and gas transmission, storage and distribution facilities serving 6.8 million of Michigan's 10.0 million residents. The company's rates and other aspects of its business are subject to the jurisdiction of the MPSC and FERC. The company has approximately 8,300 employees. The shares are a component of the S&P 500.

The ugly December days are adding up, but indices continue to hold recent lows. Although the S&P SmallCap 600 (SML) made a very minor closing low on Monday, we would not classify that as a breakdown. The S&P 500 (SPX), the S&P 100, the Nasdaq, and the Nasdaq 100 all fell between 1.1% to 1.3%, while the S&P MidCap 400 and SML both gave back 0.7%. Sector weakness was seen in Consumer Discretionary (XLY -1.6%); Materials (XLB) and Information Technology (XLK), down 1.3%; Healthcare (XLV) and Consumer Staples, off 1.2%; and Communication Services (XLC), Industrials (XLI), and Financials (XLF), off 1%. Energy (XLE) led with a flat day as natural-gas futures exploded over $4 and finished at $3.91, up 16%. Coal, Exploration & Production, Pipelines, and Oil Equipment & Services led the Energy sector. Short-term technicals are a bit challenged and we would not be surprised to see further weakness. The five-day/13-day exponential moving average (EMA) crossover is bearish for the SPX and the index already has lost its 50-day average. A break below its recent low near 5,830 would complete a small head-and-shoulders top with declining neckline, adding to the bearishness of the pattern. The SPX also is back below the lower trendline of the bull channel that started in August. The 21-day rate-of-change (ROC) is negative, while the daily Vortex indicator is in bearish territory. The only weekly bearish indicator is the NYSE-Hayes High-Low Signal, which is warning of more downside. Most other weekly indicators are still bullish. A break to new S&P 500 lows would open the door for a possible drop to multiple supports in the 5,600 to 5,700 region.