Expect a US Stocks Rally From ‘January Effect,’ Says Citadel Securities

The promise of the “January effect” looks all too real this year as early capital flows and a broadening of the market rally set the stage for gains across US equities, according to Citadel Securities.

Arguably the strongest month for inflows, still-elevated money-market balances are sitting at a record $7.6 trillion promise to support the theory that US stocks tend to rise more in January than in other months, according to Scott Rubner, Citadel Securities’ head of equity and equity derivatives strategy. As markets reopened after the holiday pause, cash linked to retirement contributions, year-end bonuses and discretionary wealth mandates is moving quickly into passive risk assets.