Wall Street finished the first month of 2023 on a high note, with the S & P 500 rising 6.2% for its best January performance since 2019. Leading the way were many of 2022’s biggest losers, in sectors like technology and communication services — a reversal of fortunes that’s also played out in the Club portfolio. The 10 worst-performing stocks in Jim Cramer’s Charitable Trust in 2022 climbed an average of 21% in January. That compares with a slide of 46.7% for all of last year. Meta Platforms (META) and Advanced Micro Devices (AMD) were the Club’s biggest laggards, but have both soared roughly 25% year-to-date. The other stocks in that category include: Nvidia (NVDA) Amazon (AMZN) Salesforce (CRM) Ford Motor (F) Walt Disney (DIS) Qualcomm (QCOM) Alphabet (GOOGL) Estee Lauder (EL) Meanwhile, the five best-performing Club stocks in 2022 — Halliburton (HAL), Devon Energy (DVN), Eli Lilly (LLY), Coterra Energy (CTRA) and Pioneer Natural Resources (PXD) — individually underperformed the S & P 500 in January. Those holdings, which climbed an average of 39.8% in 2022, only rose an average of 0.9% in the first month of this year. Of the S & P 500’s 11 sectors, energy was the only one to finish 2022 in positive territory, gaining 59%. Utilities was the next-best performer, falling just 1.4% compared with the index’s overall slide of 19.4%. More broadly, the 50 worst-performing stocks in the index last year climbed 20%, on average, through Jan. 27, according to Truist Advisory Services. The index’s top 50 constituents in 2022, by contrast, advanced an average of just 1.9% over the same period last month. Investors may welcome the market’s overall gains in January. But it remains to be seen whether January’s market leaders will continue to power the S & P higher as the year progresses. Keith Lerner, co-chief investment officer at Truist, expects the broad bounceback in 2022’s biggest losers to soon run out of steam. Lerner said factors such as tax-loss harvesting in late December — which accelerated sell-offs in already-downtrodden stocks — created the conditions for this January recovery. “Our view, more generally, is that we don’t think this is a sustainable new trend,” Lerner told CNBC. Some beaten-up stocks may have sold off too much last year, Lerner acknowledged, making it understandable that certain investors would choose to scoop up shares at what they perceive as depressed levels. But he believes the recovery for 2022’s poor performers will eventually splinter. “The tide lifted all boats on this move up, just like it hurt everything before — and I suspect that the next phase is one of distinction and separation,” Lerner said. The Club take The Club isn’t turning completely bullish on the 2022 stragglers that have become January winners. In fact, we trimmed our Qualcomm position Tuesday into strength. Over the long term, we continue to like some of the high-quality tech stocks that have rebounded in 2023. However, we’ve approached the recent rallies with caution over concerns many of those companies may issue lower guidance this earnings season. In general, the market’s winners this year can stretch across sectors, as Wall Street broadens its focus away from mega-cap tech stocks to include so-called old economy stocks that form the backbone of the real economy. The early 2023 weakness in companies like Eli Lilly and Johnson & Johnson (JNJ) — which make tangible products at a profit — provides an opportunity to add to our positions on the expectation they will rise later this year. And the Club did just that Tuesday, buying 50 shares of J & J . (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
In this photo illustration the stock trading graph of Nvidia Corporation seen on a smartphone screen.
Rafael Henrique | Sopa Images | Lightrocket | Getty Images
Wall Street finished the first month of 2023 on a high note, with the S&P 500 rising 6.2% for its best January performance since 2019. Leading the way were many of 2022’s biggest losers, in sectors like technology and communication services — a reversal of fortunes that’s also played out in the Club portfolio.