The January Barometer is one of the most well-known stock market indicators, based on the idea that the market’s performance in January sets the tone for the rest of the year. Dating back to 1950, when the S&P 500 Index (SPX) gained in January — like this year’s 2.7% rise — it averaged a 12% return for the rest of the year, with positive returns 87% of the time. Conversely, when January was negative, the index averaged just a 2% gain for the rest of the year, with 60% of returns positive.
In this article, I’ll further explore this concept by finding individual stocks that exhibit their own January Barometer. Perhaps this will give us additional insight into what to expect from those stocks for the rest of 2025.
Using a decade’s worth of data, I identified SPX stocks with January returns that predicted the rest of the year most often. That is, if January was positive, so was the rest of the year. If January was negative, then the rest of the year was also negative.
The stocks listed below were positive in January and have a history of that return correctly predicting direction. The first two tickers on the table – D. R. Horton (DHI) and Cooper (COO) – had returns for rest of the year follow the same direction as their January return 90% of the time (as is indicated in the “January Barometer” column). Based on this table, mega caps Amazon.com (AMZN) and Alphabet (GOOGL) also have a high probability of moving higher for the rest of the year.
The next table shows stocks likely to go down according to their own January Barometer. Notice the first ticker on the table, Digital Realty Trust (DLR), which is the only stock in the SPX with a January return that has correctly predicted the rest of the year in each of the past 10 years. With a 7.6% loss in January, this does not mean it’s 100% certain to go lower rest of the year, but it’s an interesting stat.
Microsoft (MSFT) is a mega cap that made the list, but in the last 10 years, it’s been lower in January three times, and after two it was higher the rest of the year. This means investors should take this information with grain of salt. Campbell’s (CPB) might be more interesting. Over the past 10 years, it’s been negative in January four times, and every time it’s been down for the rest of the year, averaging a return of about -14%.
Based on the January Barometer, the SPX has an increased probability of moving higher over the next 11 months. Hopefully, we’ve gained insight into the direction of some individual stocks for the rest of the year, given their individual January Barometer performance.
