Off to a flying start: Domestic equities soared after Congress struck a fiscal cliff deal in the wee hours of the new year, and those who believe that January suggests something about the rest of 2013 were rejoicing. The Dow industrials haven't seen a January this good since 1989; the index is now just over 2% away from its pre-2008 high. The S&P500 had its best January since 1997, and is roughly 4% from achieving a similar milestone. The Nasdaq was hampered in part by Apple's fall from favor but still had its best month since last August, while the small-cap Russell 2000 handily beat the large caps. And the Global Dow gained in a single month more than half of the 10.8% it earned in all of 2012.
The renewed interest in equities cut into bond demand; the 10-year Treasury yield rose above 2% for the first time since last April. Oil prices rose almost 5% to more than $97 a barrel during the month, while the dollar lost roughly 1.5% against a basket of six foreign currencies. Despite some volatility, gold ended January at roughly $1,680, only slightly higher than it started.
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