Dow notches 10th straight monthly gain in January

By Economic IndicatorsFOXBusiness

Stocks could see 15 to 20 percent gains this year: Jim McCaughan

Principal Global Investors CEO Jim McCaughan on where the opportunities are for investors, the outlook for the tech sector and concerns about the impact of rising inflation.

Updated 1/31/18

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Stocks finished January on an upbeat note, with the Dow moving into the black on Wednesday, after two consecutive sessions of losses which resulted in more than a 500-point drop for the Dow.

Even including the market hiccup late in January, it was a blockbuster month for stocks with investors continuing to bid up equities, anticipating further growth in their value thanks to tax reform and a more business-friendly environment under President Trump.

The Dow and the S&P 500 completed their 10th straight month of gains, the best market momentum since 1959, when the Dow tallied up a 12-month winning streak ending in February of that year and the S&P 500 enjoyed an 11-month streak that went through January.

The stellar January performance follows a blockbuster 2017 when stock gains accelerated at the end of the year due to the anticipation, and eventual reality of a sweeping tax reform package.

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Now, with tax reform a reality, equities are expected to continue to climb, with extra impetus coming from the dramatically reduced corporate tax rate, to 21% from 35%.

The country’s business leaders widely expect the healthy U.S. economy to grow even further thanks to tax reform. For example, Goldman Sachs analysts recently said they expect that in 2018 S&P 500 earnings per share will grow by 14%, including a 5% boost thanks to tax reform.

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