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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.
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.