S&P 500 posts best start to year since 1997
US index rises 5.2 per cent in January, as stock prices beat bonds and currencies
The Standard & Poor's 500 Index returned 5.2 per cent last month in the strongest start to a year since 1997, leading global stocks higher and beating bonds, commodities and currencies.
The S&P GSCI Total Return Index of 24 commodities added 4.4 per cent, the biggest increase since August.
The US Dollar Index declined 0.7 per cent and bonds lost an average 0.7 per cent as of January 30, snapping a six-month rally, according to Bank of America Merrill Lynch's Global Broad Market Index of 20,000 fixed-income securities.
Stock values rose by US$2.6 trillion as better-than-estimated corporate profits, the end of a US political logjam over spending cuts and tax increases, accelerating growth in China, and signs of a recovery in Europe led investors away from the safest assets in search of higher returns.
American equities may rise another 3 per cent this year, while the US dollar strengthens 1.9 per cent and precious metals lead returns in commodities, according to Bloomberg surveys.
"There's a lot of momentum for stocks even after such a good start to the year," said Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, which oversees US$170 billion. "Earnings are strong, the economies around the world are bottoming, and valuations are attractive."