A Month Of Shock And Awe: These Were The Best And Worst Performing Assets In January
As Jim Reid writes, “January managed to both shock and awe in various ways, yet still delivered broad based gains across all global assets in our monthly performance review when measured in USD terms — a genuinely rare occurrence. It was perhaps fitting then, that the month ended with extraordinary volatility: silver saw its largest daily fall since 1980 (36% at the intraday lows, 26.3% at the close), while Gold recorded its biggest one day decline since 2013 ( 8.95%).”
We’ll do a more detailed summary below, but here are the highlights:
The most striking feature in January was the breadth of the rally. Despite an array of risks around Venezuela, Iran, Greenland and Fed independence, nearly every major asset was still in positive territory.
Equities did well across the board, as positive data surprises continued to power risk assets. Indeed, the ISM services index hit a 14-month high, whilst the US jobs report showed unemployment ticking lower. In turn, the S&P 500 (+1.4% in total return terms) briefly poked above 7,000 for the first time, whilst the MSCI EM index (+8.9%) had its best monthly performance since November 2022.
Most notably, it was a historic and extraordinary month for precious metals, even with the late pullback. In fact, gold (+13.3%) saw its best monthly performance since September 1999, and silver (+18.9%) posted a 9th consecutive monthly gain.
Other commodities did very well, and the geopolitical risk pushed Brent crude oil (+16.2%) to $70.69/bbl, marking its biggest monthly jump in four years.
Bitcoin was one of the few major assets to end the month lower, down -10.8% to $78,197. That’s a 4th consecutive monthly decline for Bitcoin, which hasn’t happened since before the pandemic.
The US Dollar also struggled, particularly after Trump was asked about the decline, and he said “No, I think it’s great”. So the US Dollar weakened against every other G10 currency, and the dollar index also saw its worst 4-day slide since the Liberation Day turmoil last April.
Finally, there were some huge moves in Japan, where a snap election was announced for February 8. JGBs sold off amidst election pledges for more consumption tax cuts, with the 10yr yield up +18bps on the month, and the 30yr yield up another +24bps.
So January was an action-packed month. With all that’s going on, February is unlikely to be quiet.
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