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After a wild but winning January, stock market bulls have little to complain about but plenty to cogitate over. The S & P 500’s 1.4% gain in the month annualizes to an 18% advance, which would mean a fourth straight year of superior returns (if things even remotely worked in such a linear progression). The index never fell more than 3% from a record high, the median large-cap stock more than doubled the S & P’s gain. The Citi U.S. Economic Surprise Index, which tracks how macro data are running against forecasts, is close to a two-year high. Earnings growth is doing what’s become the usual thing: blasting through consensus bogeys to reach low double digits, while blended S & P 500 profit margins are pacing at record levels, according to FactSet. Corporate debt spreads remain blissfully snug against Treasury yields. All of that confers bragging rights on the equity optimists and those subscribing to the popular view that upside impetus would shift from tech to cyclical groups. For a broadly positive start to a year, though, there are a striking number of caveats, extremes and oddities for skeptics to invoke. At the headline index level, the S & P 500’s January closing level was reached on the third trading day of the month, with sideways chop and a brief intraday sniff above the 7000 threshold along the way. In fact, the S & P is around flat since just before Halloween, restrained by persistent pressure on the majority of the Magnificent 7 tier. Is there any significance to the index stalling for a few months just as it’s doubled from the trough of the 2022 bear market (when the intraday low was 3491)? .SPX 6M mountain S & P 500, 6 months Beyond a rangebound large-cap benchmark, the erratic flows rushing through precious metals and memory-chip stocks, the flailing action in bitcoin and twitchy behavior in currency markets threaten to spread uneasy vibrations into so-far steady equity and Treasury markets. Silver and Sandisk Friday’s mini-crash in silver and sharp pullback in gold – both from massive multiyear overbought extremes – coincided with a distinct but orderly bounce in the U.S. Dollar Index from a four-year low. Memory stocks likewise surged vertically to generate unstable technical conditions ripe for a violent unwinding. Sandisk shares finished Friday more than $100 off their intraday high on fabulous results and guidance. The fever in silver and memory names had become a self-reinforcing momentum phenomenon, built as always on a germ of truth about favorable supply-demand dynamics and hopeful “This time is different” arguments. Notable that both these trades were energized by a viral narrative of acute physical shortage, forced buying and short squeezes (such as the original meme stocks were). China was reportedly restricting silver exports and metal refiners unable to process enough scrap silver to move the supply needle. Memory-chip production is maxed out globally and bulls tout price-insensitive buyers who need the products for the inference phase of AI-model training. On more than one day last week, the iShares Silver ETF (SLV) saw dollar trading volume equal to about half its entire $60 billion in assets under management. Did the fever break Friday? Will a silver purge take adjacent momentum plays along with it? SLV YTD mountain iShares Silver Trust, YTD Impossible to say. An intriguing side story to the hyper-aggressive moves in metals and memory is the way it reflects a lack of collective investor conviction in once-popular themes. Software, obviously, has been in liquidation mode, seem as likely the most disrupted profit pool by AI coding tools. But look, too, at the poor action in once-bulletproof card-processing leaders Visa and Mastercard , once viewed as premium “compounders” and now perhaps vulnerable to new competition under possible new laws and perhaps AI “agent commerce.” Of course, when crowded growth stocks undergo a disorderly exit, it can mean overshoots are possible and value might be building up. Visa and Mastercard have never been as inexpensive relative to the S & P 500 as they are now in their two decades as public companies. If only for technical reasons involving the forces of mean-reversion, software stocks “should” be approaching at least a relief phase. Renaissance Macro strategist Jeff DeGraaf points out that the performance of the momentum factor within the tech sector – meaning how high-momentum stocks are doing compared to low-momentum – is now in the top 5% of all readings since 2000. “The point is to fade momentum with any predictability when we’re in top 5th percentile,” he says. “It could be as simple as semis vs. software,” meaning to play for a temporary rebound of software over chip leaders. This comes at a time of year when reversals in momentum have become somewhat common. Last year it was the DeepSeek scare in January followed by a violent upending of momentum strategies in mid-February, drove a sharp market pullback even before the tariff panic fully emerged. January Barometer Every year around now we get the stories touting January’s supposed power to indicate the path for stocks over the rest of the year. Sure, returns have been better after an up January than a down one. But other months are even more predictive on this score. And even after a negative January, the S & P 500 has been up 60% of the time over the ensuing 11 months. Further, one of the glaring exceptions to the “January barometer” rule came in 2018, the second year of President Trump’s first term. A ripping January rally gave way to a volatility shock exacerbated by hyperactive flows into specialized trading instruments, and from the late January high the S & P 500 had less than 3% of upside but 18% downside over the rest of that year. Not a prediction, just a note of context. Some other extraordinary features of the current market moment bear a mention: -Potential intervention to strengthen the Japanese yen is being openly discussed, something that could have some knock-on impact on global risk positioning. -The president is nominating a new Federal Reserve chair, in this case Kevin Warsh, who in the past has expressed skepticism toward activist Fed balance sheet policies. As has been repeated constantly, new Fed chairs have tended to be “tested” by market dislocations early on. While not a rule of any sort – and Janet Yellen’s “test” in 2014 was a trivially mild one – the market knows and might try to anticipate this dynamic, which comes atop the understanding that midterm election years often see a meaty correction. -OpenAI, Anthropic and SpaceX continue to raise capital in 11-figure chunks from private investors, each of which expect soon to have their investment marked up through an IPO relatively soon. Can the public equity market absorb this fresh supply at a time when even Mag 7 leaders are being sold to fund other stock purchases and share buyback activity is ebbing? Will the bull broaden? If those are factors that can cause investors to talk themselves into a retreat from risk, the handy counter-argument is that the most global equity markets and a hefty majority of U.S. stocks are in positive trends and deserve the benefit of the doubt. Quite true and a solid macro signal. But can a broader tape turn into too much of a good thing? Deutsche Bank strategists reported on Friday that investor positioning in cyclical sectors now exceeds that in mega-cap growth stocks, a relative rarity that can imply the Street could be overplaying its hand in industrials, materials and energy in the short term. Ned Davis Research strategist Ed Clissold last week also crunched the numbers on what to expect from the market when more than 60% of S & P 500 stocks are outperforming the index itself. As of last Wednesday, that number was 62%, the highest since 2001. Clissold found that in years when 60% or more stocks beat the index, the S & P 500 was down, on average, and small caps and consumer staples outperformed. Bulls should hope for a somewhat narrower rally in which barely more than half of stocks outpace the benchmark. Should bulls be rooting for a “narrowing?” As with so many things in markets and in life, what people want is often not the same as what they need.