The new year might just be a couple weeks old, but holy cow have they been busy ones. Good news: There are decent odds youve got a bit of a reprieve today.

Today marks the 40th anniversary of MLK Day, a celebration of Civil Rights leader Martin Luther King Jr., but its also an opportunity to recharge after the sprint many workers have at the beginning of the year, following time off around the holidays. If youre planning to use the day to get some personal business done, though, its going to be hit and miss depending on what that business is. Government organizations will largely be closed. But, shoppers shouldnt have too many problems.

Heres a look at whats open and closed on MLK Day 2023 and a brief history about the holiday.

What is MLK Day?

Designed to honor Martin Luther King Jr., MLK Day became a federal holiday in 1983, though some states took a bit longer to adopt it as a paid state holiday. It falls on the third Monday of every January. It was the first federal holiday in the U.S. to honor an African American.

Are banks open on MLK Day?

No. Since MLK Day is a federal holiday, banks will be closed. You can, however, still use ATM machines and online banking to conduct most business with your financial institution.

Will there be any mail delivery on MLK Day?

The U.S. Postal Service will not be operatingagain, because of MLK Days status as a federal holiday. UPS and FedEx will both remain open, though, so if youre expecting a package, it will likely arrive on time (though weather delays could be a factor this year, especially in California). All of the drop off locations of both companies will have normal hours, as well.

Is the stock market open on MLK Day?

The New York Stock Exchange, Nasdaq and bond markets are all closed. Theyll reopen on Tuesday.

Are schools open on MLK Day?

Turn off the alarm clocks. Most K-12 schools, colleges, and universities dont hold classes on this day.

Are government offices open on MLK Day?

There might be the very rare exception, but generally city, county, state and federal offices are closed.

Are National Parks open on MLK Day?

Yesand its actually a great day to go as there are some tremendous cost savings. While theyre run by the government, national parks are open on MLK Dayand this happens to be one of five days this year when the ones that charge an entrance fee will waive that.

How about libraries? Are those open on MLK Day?

Theyre not. Finish that book!  

Which stores are closed on MLK Day?

Virtually none. Retailers generally choose to stay open on MLK Day, luring shoppers in with inventory clearance sales as they get rid of the last of their holiday inventory. Everyone from Walmart to Target to Home Depot to Walgreens and CVS will likely be open, though perhaps with adjusted hours.

Similarly, big grocery chains, such as Harris Teeter, Kroger and Whole Foods, as well as restaurants will also be open. Some small businesses are closed on the holiday, due to staffing issues.

Whats this Im hearing about Robert E. Lee Day?

As mind-boggling as it might be, the birthday of Confederate general Robert E. Lee is still celebrated in some states and the observance falls on the same day as MLK Day. Its a state holiday in Alabama and Mississippi (in conjunction with MLK Day) and its observed in Florida, though schools and offices are not closed for it.

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New movies like Plane and House Party were no match for Avatar: The Way of Water and the killer doll horror M3GAN at the box office this weekend. The two holdovers topped the charts again according to studio estimates Sunday.

In first place for the fifth weekend in a row was James Camerons Avatar sequel, which added an estimated $31.1 million through Sunday. That total will likely balloon to $38.5 million by the end of Mondays Martin Luther King holiday. As of Sunday, the films domestic total now rests at $562.9 million (the 13th biggest of all time) and its global total is $1.89 billion. Avatar 2 needs to pass $1.92 billion to trump Spider-Man: No Way Home, which is currently the sixth highest grossing film of all time globally.

There were such huge expectations and a lot of naysayers that opening weekend, said Paul Dergarabedian, the senior media analyst for Comscore. But Avatar, for a James Cameron movie, is moving at lightning speed up the domestic and global box office chart. I think he always knew this would be a $2 billion movie.

Second place went to Universal and Blumhouses M3GAN which in its second weekend in theaters added $17.9 million through Sunday and an estimated $21.2 million including Monday. The modestly budgeted thriller that cost a reported $12 million to produce has made $59.8 million in North America.

Horror movies typically have very steep second weekend drop offs in ticket sales, but M3GAN only fell 41%. Dergarabedian said thats almost unheard of for a horror picture and shows world class staying power.

Universal also claimed the third place spot, with Puss in Boots: The Last Wish, which audiences continued to seek out in theaters even though its currently available to rent at home. The family-friendly animated film added $13.4 million in its fourth weekend, bringing its domestic total to $110.3 million.

A Man Called Otto, from Columbia Pictures, expanded to 3,802 theaters this weekend, adding $12.7 million through Sunday, and $15 million including Monday, to take fourth place. Directed by Marc Forster, the adaptation of A Man Called Ove starring Tom Hanks is proving to be something of a rarity in the theatrical marketplace as an adult-targeted drama that is doing well.

The Gerard Butler action pic Plane, a Lionsgate acquisition for release in North America, rounded out the top five with a better-than-expected $10 million in its first three days. In the film, Butler plays a pilot whose crash landing on an island is only the first of his troubles. On the island, most of the passengers are taken hostage. Plane got better-than-average reviews with 75% positive from critics on Rotten Tomatoes.

Sixth place went to the second major new offering this weekend, House Party, a reboot of Reginald Hudlins 1990 hit that spawned several spinoffs. The film, which made $3.9 million through Sunday from 1,400 locations, was originally intended as a straight-to-HBO Max property but Warner Bros. pivoted to a theatrical release as a gesture to audiences and exhibitors hungry for new films. The R-rated, youth-oriented comedy did not score well with critics.

Overall, the three-day box office total is going to net out around $100 million, which is not quite at pre-pandemic levels, but still up some 44% from the same weekend last year.

January is not going to be the slow month we thought. Its a great combination of films out there thats not just dominated by Avatar: The Way of Water, Dergarabedian said. Theaters need movies and the studios are supplying those.

Estimated ticket sales for Friday through Sunday at U.S. and Canadian theaters, according to Comscore, with Wednesday through Sunday in parentheses. Final domestic figures will be released Monday.

  1. Avatar: The Way of Water, $31.1 million.
  2. M3GAN, $17.9 million.
  3. Puss in Boots: The Last Wish, $13.4 million.
  4. A Man Called Otto, $12.7 million.
  5. Plane, $10 million.
  6. House Party, $3.9 million.
  7. Black Panther: Wakanda Forever, $2.2 million.
  8. The Whale, $1.5 million.
  9. I Wanna Dance With Somebody, $1.2 million.
  10. Waltair Veeraya, 905,000.

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As thousands of business executives descend on the Swiss ski resort of Davos this week, its easy to be cynical. Their stated goal of stimulating bold collective action is sound, even noble. Solving todays macro crisesclimate change, energy security, and global inflation, to name but a fewrequires business to be proactive.

However, many Davos delegates believe they have a fiduciary duty to prioritize investors above all. As I often hear in conversations with major businesses, We cant all be Patagonia. And indeed, while most modern companies now boast a slew of environmental and social programs, few genuinely challenge the primacy of quarterly returns. If they do, then the financial markets let the errant chief executive know soon enough.

It doesnt have to be this way. Picture a scenario where leaders measure themselves against a single guiding purpose, be it environmental or social, as well as profit. Using this purpose as a North star, they are accountable for respecting the needs of their workers, suppliers, and the parts of the planet they depend on.

Imagine how much faster the move to a clean, vibrant economy would be if the talent of businesspeople was aligned with what we all want as individuals: a stable civilization, a future for our children, and a continued sense of wonder at the world we have been gifted.

Wishful thinking? Not for the thousands of companies around the world already now building their businesses around the idea of positive returns for society or the planet.  In 2021, there were 4,000 certified benefit corporations, in over 70 countries and 150 industries. Tens of thousands of companies are incorporated as benefit corporations in the U.S. following recent regulation changes. In 2021, over 10 Public Benefit Corporations planned IPOs.

Such models are successful because capital investors are not neglected. Its more a case of rebalancing: By opting to use the magic of the market to deliver a social or environmental purpose, these companies are generating investor returns as a byproduct of their success, not as their central goal.

How can corporate governance be done differently?

Including purpose alongside returns may seem like a subtle shift in emphasisbut it is one that carries huge practical implications for how businesses conduct themselves and the legacies they consequently leave.

Progressive legislation can support that shift. Thats the case as in Italy, France, and the U.S. (where so-called Benefit Corporations have statutory backing in 35 states). Businesses can also opt for longstanding governance alternatives, such as employee ownership and shareholder foundations, or, in the case of U.K.-based beauty company Faith in Nature, giving the natural world a legal say in business strategy with a representative seat on the board.

In a move that generated headlines around the world last year, Patagonia founder Yvon Chouinard transferred ownership of the vast bulk of the company (100% of the nonvoting stock) to a non-profit dedicated to fighting the environmental crisis and defending nature, the Holdfast Collective.

The foundations goal echoes our companys reason for beingto save our home planet. Every dollar we now make, after reinvesting in the business, will be distributed as a dividend to help fight the crisis, connecting profit with our company purpose of being in business to save our home planet. This fundamental shift has implications across every aspect of the business, from the products we make to our campaigning work.

It sounds radical, but, in fact, it has made good business sense for many other successful companies over the past century. The John Lewis Partnership, a U.K. high-street retailer, uses a democratic steward ownership model that ensures its 80,000 employees have an active say in how the business is run. Similarly, roughly 94% of the shares in the German electronics giant, Bosch, are held by a foundation dedicated to pursuing the social purpose of its founder.

Every approach has its own nuances. Some businesses continue issuing shares to investors, for instance, but ensure enough non-transferrable shares (also known as golden shares) exist to safeguard their companys long-term purpose (examples include search engine Ecosia, software firm Sharetribe, and sustainable fashion brand Ziel). Others pass full economic ownership over to a foundation and then assign non-transferrable voting rights to trusted stewards, as we have done at Patagonia.

The result is what countsnamely, to guard a companys social purpose in perpetuity. Executives come and go. Markets shift. Agendas change. Evidence is mounting in favor of the financial performance of for-purpose businesses over their traditional rivals, suggesting the incentive to renege on commitments may dwindle in the future.

How do we scale this governance shift?

A purpose-led approach to capitalism will require advocates for government reform from across the business spectrum. Take the European Unions proposed Corporate Sustainability Due Diligence Directive. If passed, (voting is scheduled for May 2023), the directive will require all large European companies to assess their supply chains for possible human rights abuses and negative environmental impacts. The ripple effects could be huge.

Meanwhile in the U.K., the Better Business Act, which already has the backing of more than 1,500 firms, would legally oblige companies to replace their current focus on shareholder returns with one that takes into account the interests of all their stakeholders.

We need the innovation, resources, and problem-solving capacity of business to take us forward, not backward. Today, even if corporate leaders buy into this proposition, many find their hands tied by antiquated, profit-first governance systems that perpetuate extractive practices.

Its important not to be naïve: shareholder capitalism runs deep, especially at Davos, but alternatives that include other stakeholders are possible. Companies are what makes capitalism tickand with the right governance in place, companies can be a force for good and benefit the many, not the few.

Beth Thoren is the director of environmental action, EMEA, at Patagonia.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

More must-read commentary published by Fortune:

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As the World Economic Forum kicks off in Davos, Switzerland on Monday, it will be hard to miss the dozens of sessions on the global climate crisis. But dont look for the organization that first brought the topic of sustainability to Davos 50 years ago. The Club of Rome, which became famous in the early 1970s for sounding the alarm bell on the planets limits to growthincluding at Davosis sidelined from the event this year.

The reason may be a difference in opinion. Last Friday, the Club and its allies released a letter calling on the leaders at Davos to tax wealth, income, companies and windfall profits more progressively to counter the climate emergency. Among the signatories were a co-author of the original Limits to Growth, Kate Raworth, the economist of Doughnut Economics, and the co-presidents of the club.

But such a message is unlikely to have landed well at the Swiss ski resort. To be sure, addressing the energy, food, and climate crises is one of the five thematic pillars at the Annual Meeting. Climate action is also the subject of dozens of sessions. But the same is not true for discussions on taxes, wealth, or inequality. There is exactly one session on tax reforms, and two on inequality.

Taxes are always going to be a tougher sell to the global business elite, of course. They are a zero-sum game, after all. A dollar paid to the government in taxes is a dollar less in profits for the company and its shareholders. With climate action, that seems less to be the case. Some companies are already making money off the energy transition, profiting from turning the green economy into an opportunity.  

But for Sandrine Dixson-Decleve, co-president of the Club of Rome, that reasoning doesnt make sense. Social tipping points will be our greatest challenge as we move through the 21st century, she told me on the phone, as she was making her way to Davos. We cannot talk about climate without talking about the hypocrisy of our taxation structures.

In their letter, the Club did acknowledge the difficulty in bringing its message across. Business leaders in Davos this week may feel that this strategy [taxing wealth, income, companies and windfall profits] is against their short term and individual interests, they wrote. But they went on to call that a limited and self-destructive view.

Taxes strengthen societies and governments, the reasoning goes, and that will be crucial as the world addresses the so-called polycrisis in climate, energy, food, immigration, and other areas.

But will it be enough of an argument?

There are at least a few tax fans present in Congress Centre this week, who may move the debate forward. Gabriel Zucman, the French economist who known for his research on tax havens, will be one of the participants in the tax session at Davos. Mathias Cormann, Secretary-General of the OECD, the intergovernmental organization that is trying to raise the global tax bar, is another.

From its sideline presence in Davos, the Club of Rome will also be having conversations with governments and individuals it hopes to get on board of their plans to raise taxes. They include John Kerry, the U.S. special presidential envoy for climate; Ursula von der Leyen, president of the European Commission; Kristalina Georgieva, managing director of the International Monetary Fund; and United Nations Secretary-General Antonio Guterres.

As the Club of Rome knows well, convincing the global business elite of something that benefits them in the long run, but not in the short term, is in itself a long game. It took the Club almost 50 years to be vindicated among business leaders in its views on the limits to growth. Already, two thirds of Americans hold a favorable view of the IRS, a jump of 20% compared to the 1980s, 1990s, and as recent as 2010.  

But if the Club is right about the urgency of the social and economic crisis we face this time, they better hope their vindication at Davos is a shorter time coming. And that will either require them joining the debate again directly, or finding some powerful allies in the World Economic Forums orbit. So far, that remains a limit to the Club of Romes own growth at Davos.

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Investing can often be broken down into a few simple rules that investors can follow to be successful. But success can be as much about what to do as it is what not to do. On top of that, our emotions throw a wrench into the whole process. While everyone knows you need to buy low and sell high, our temperament often leads us to selling low and buying high.

So its key to develop a set of golden rules to help guide you through the tough times. Anyone can make money when the market is rising. But when the market gets choppy, investors who succeed and thrive are those who have a long-term plan that works.

Here are 10 golden rules of investing to follow to make you a more successfuland hopefully wealthyinvestor.

Rule No. 1: Never lose money

Lets kick it off with some timeless advice from legendary investor Warren Buffett, who said Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1. The Oracle of Omahas advice stresses the importance of avoiding loss in your portfolio. When you have more money in your portfolio, you can make more money on it. So, a loss hurts your future earning power.

Of course, its easy to say not to lose money. What Buffetts rule essentially means is dont become enchanted with an investments potential gains, but also look for its downsides. If you dont get enough upside for the risks youre taking, the investment may not be worth it. Focus on the downside first, counsels Buffett.

While stocks have been volatile, theyre based on the earning power of global businesses. As earnings rise, so will stocks, at least over time. Contrast that against cryptocurrencies, which usually have no basissuch as earnings or hard assetsto back their valuation. That is, cryptocurrency could ultimately be worth nothingnot the kind of risk that Buffett wants to take.

Rule No. 2: Think like an owner

Think like an owner, says Chris Graff, co-chief investment officer at RMB Capital. Remember that you are investing in businesses, not just stocks.

While many investors treat stocks like gambling, real businesses stand behind those stocks. Stocks are a fractional ownership interest in a business, and as the business performs well or poorly over time, the companys stock is likely to follow the direction of its profitability.

Be aware of your motivation when investing, says Christopher Mizer, CEO of Vivaris Capital in La Jolla, California. Are you investing or gambling? Investing involves an analysis of fundamentals, valuation, and an opinion about how the business will perform in the future.

Make sure the management team is strong and aligned with the interests of shareholders, and that the company is in a strong financial and competitive position, says Graff.

Rule No. 3: Stick to your process

The best investors develop a process that is consistent and successful over many market cycles, says Sam Hendel, portfolio manager at Kepos Capital. Dont deviate from the tried and true, even if there are short-term challenges that cause you to doubt yourself.

One of the best strategies for investors: a long-term buy-and-hold approach. You can buy stock funds regularly in a 401(k), for example, and then hold on for decades. But it can be easy when the market gets volatile to deviate from your plan because youre temporarily losing money. Dont do it.

Rule No. 4: Buy when everyone is fearful

When the market is down, investors often sell or simply quit paying attention to it. But thats when the bargains are out in droves. Its true: the stock market is the only market where the goods go on sale and everyone is too afraid to buy. As Buffett has famously said, Be fearful when others are greedy, and greedy when others are fearful.

The good news if youre a 401(k) investor is that once you set up your account you dont have to do anything else to continue buying in. This structure keeps your emotions out of the game. Youll continue purchasing stocks when theyre cheaper and offer better long-term values.

Investors who continued to buy throughout the 2020 downturn rode stocks up throughout 2021, and the same will likely apply to future downturns as well.

Rule No. 5: Keep your investing discipline

Its important that investors continue to save over time, in rough climates and good, even if they can put away only a little. By continuing to invest regularly, youll get in the habit of living below your means even as you build up a nest egg of assets in your portfolio over time.

The 401(k) is an ideal vehicle for this discipline, because it takes money from your paycheck automatically without you having to decide to do so. Its also important to pick your investments skillfullyheres how to select your 401(k) investments.

Rule No. 6: Stay diversified

Keeping your portfolio diversified is important for reducing risk. Having your portfolio in only one or two stocks is unsafe, no matter how well theyve performed for you. So experts advise spreading your investments around in a diversified portfolio.

If I had to choose one strategy to keep in mind when investing, it would be diversification, says Mindy Yu, former director of investing at Betterment. Diversification can help you better weather the stock markets ups and downs.

The good news: Diversification can be easy to achieve. An investment in a Standard & Poors 500 Index fund, which holds hundreds of investments in Americas top companies, provides immediate diversification for a portfolio. If you want to diversify more, you can add a bond fund or other choices such as a real estate fund that may perform differently in various economic climates.

Rule No. 7: Avoid timing the market

Experts routinely advise clients to avoid trying to time the market, that is, trying to buy or sell at the right time, as is popularized in TV and films. Rather, they routinely reference the saying Time in the market is more important than timing the market. The idea here is that you need to stay invested to get strong returns and avoid jumping in and out of the market.

And thats what Veronica Willis, an investment strategy analyst at Wells Fargo Investment Institute recommends: The best and worst days are typically close together and occur when markets are at their most volatile, during a bear market or economic recession. An investor would need expert precision to be in the market one day, out of the market the next day and back in again the following day.

Experts typically advise buying regularly to take advantage of dollar-cost averaging.

Rule No. 8: Understand everything you invest in

Dont invest in a product you dont understand and ensure the risks have been clearly disclosed to you before investing, says Chris Rawley, founder and CEO at Harvest Returns, a fintech marketplace for investing in agriculture.

Whatever youre investing in, you need to understand how it works. If youre buying a stock, you need to know why it makes sense to do so and when the stock is likely to profit. If youre buying a fund, you want to understand its track record and costs, among other things. If youre buying an annuity, its vital to understand how the annuity works and what your rights are.

Rule No. 9: Review your investing plan regularly

While it can be a good idea to set up a solid investing plan and then only tinker with it, its advisable to review your plan regularly to see if it still fits your needs. You could do this whenever you check your accounts for tax purposes.

Remember, though, your first financial plan wont be your last, says Kevin Driscoll, vice president of investment services at Navy Federal Financial Group in the Pensacola area. You can take a look at your plan and should review it at least annuallyparticularly when you reach milestones like starting a family, moving, or changing jobs.

Rule No. 10: Stay in the game, have an emergency fund

Its absolutely vital that you have an emergency fund, not only to tide you over during tough times, but also so that you can stay invested long term.

Keep 5% of your assets in cash, because challenges happen in life, says Craig Kirsner, president of retirement planning services at Kirsner Wealth Management in Pompano Beach, Florida. He adds: It makes sense to have at least six months of expenses in your savings account.

If you must sell some of your investments during a rough spot, its often likely to be when they are down. An emergency fund can help you stay in the investing game longer. Money that you might need in the short term (less than three years) needs to stay in cash, ideally in a high-yield online savings account or perhaps in a CD. Shop around to get the best deal.

Bottom line

Investing well is about doing the right things as much as it is about avoiding the wrong things. And amid all of that, its important to manage your temperament so that youre able to motivate yourself to do the right things even as they may feel risky or unsafe.

Tech giants are busy laying off workers and reducing office space. In the process, they might also be setting in motion the emergence of new entrepreneurs and startupswho will be able to collaborate in suddenly affordable prime commercial real estate.

Angel investor Jason Calacanis predicted on the All-In podcast that the big business winners of 2023 will be laid-off tech workers who choose to take control of their destiny and start companies.

I think laid-off tech workers who get together in groups of two, three, or fourdevelopers, product managers, people who actually build stuffand start companies together are going to become extremely successful, and theyre going to make incredible lemonade from these lemons of these big tech layoffs, he said earlier this month.

Some of those employees-turned-entrepreneurs might come for example from Meta, which recently laid off about 11,000 workers. The Facebook owner is also shedding office space, both to reduce costs and because its embraced remote work. On Friday, it confirmed it will sublease office space in Seattle it no longer needs, according to the Seattle Times. It also recently gave up real estate in New York City. 

Subleased office space is typically rented out at a discount, which could allow startups who otherwise couldnt afford it to move in, noted Colliers leasing expert Connor McClain to the Seattle Times.

It isnt just Meta thats both laying off workers and letting go of real estate. Plenty of major tech companies are, among them Microsoft, Salesforce, and Twitter.

Salesforce recently announced layoffsabout 10% of its staffwhile also indicating it will shed real estate. CEO Marc Benioff said in an all-hands meeting.

This is a larger moment for cost restructuring, we want to takesomewhere between $3 to $5 billion out of the business, he said. When we look at how are we going to do that, real estate is going to be a major part of it.

The company is headquartered in San Francisco. A Jan. 7 exchange between PayPal co-founder David Sacks and Tesla CEO Elon Musk highlighted the commercial real estate situation there. Sacks tweeted, Just got offered office space in San Francisco (SOMA) for the same price as 2009. Yikes.

Musk replied, It will go lower. 

As it does, entrepreneurs emerging from the tech layoffs could take advantage of the cheaper real estate to house new businesses. 

Of course, some startups might choose to save money by not renting commercial real estate and having everyone work from home. But as CEOs at large companies like Disney and Starbucks have recently indicatedwhile insisting remote workers return to the officethere are clear business advantages to collaborating face to face.  

As Disney CEO Bob Iger wrote to employees in a recent memo, In a creative business like ours, nothing can replace the ability to connect, observe, and create with peers that comes from being physically together. 

That might be especially true for tech entrepreneurs determined to make lemonade from the lemons of being laid off. 

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Stock-market investors hoping for a breather after a brutally volatile 2022 have history and options traders on their side. 

With a slowdown in inflation buttressing speculation that the Federal Reserve is nearing the end of its interest-rate hikes, equity-derivative traders are expecting a break from the turmoil that kept racing through markets last year. Thats driven the so-called volatility curve a plot that shows expectations for the severity of price swings in the months ahead lower at every point than it was a year ago. 

Other historical data points also suggest that the optimism of the past two weeks isnt misplaced. Among them: there have only been two back-to-back annual stock-market drops since 1950, during the recession of the early 1970s and after the bursting of the dot-com bubble at the start of this century, which lasted three years. Nothing along those lines is expected in 2023, at least among the base-case scenarios from most Wall Street strategists.

With how bad last year was, there is so much bad news thats likely already priced into markets, said Ryan Detrick, chief market strategist at Carson Group. He thinks the US can avoid a recession, which would be a major positive catalyst for stocks. Were seeing steps in the right direction with inflation. Thats the key to the whole puzzle.

Of course, investors shouldnt expect completely smooth sailing from here. In fact, the January after a double-digit yearly slump historically has been a rough month for the S&P 500 Index. 

Still, the S&P 500 rose 2.7% last week and is up more than 4% for the year. On Thursday, the Labor Department reported that the consumer price index dropped in December from the month before and posted its smallest annual increase since October 2021. The data were widely seen as giving Fed officials room to further downshift the pace of rate hikes at the February meeting.

Those stock-market gains are welcome news for equity bulls after the S&P 500 posted a more than 19% loss in 2022, the worst hit since the 2008 financial crisis. The good news is such down years are usually followed by a rebound: The S&P 500 has rallied back from them by an average of 15% in the next 12 months, according to data since 1950 that was compiled by Carson Group.

Markets may have good reasons to see the glass half full on inflation and dismiss hawkish central bank rhetoric, said Emmanuel Cau, a strategist at Barclays Plc. 

Yet, there are still reasons for lingering anxiety among stock investors, who pulled $2.6 billion from US equity funds in the week through Jan. 11, according to a Citigroup Inc. note citing EPFR Global data. 

Its possible the Fed could ultimately defy the markets expectations. For instance, officials are indicating that traders are wrong to anticipate interest rate cuts later this year. And the latest round of corporate earnings reports are just starting to be released and carry their own risks. 

Those skeptical Januarys gains will be sustained can also point to their own precedent. On the four occasions that markets have posted double-digit declines in a year since the turn of this century, stocks have fallen in the first month of the following year three times.

But for now, traders at the very least arent expecting any big shocks. The months two major economic reports the employment figures and the consumer-price index have already been released and showed that growth is continuing to hold up and inflation is easing. 

The Cboe VIX Index a gauge of projected price swings in the S&P 500 that normally moves in the opposite direction of the index finished last week at around 18, the lowest since last January.

Institutional investors have been covering their short equity bets in the past several weeks and earlier this month boosted their net-long position to the highest since May 2022, Ned Davis Researchs analysis of CFTC data show.

If there is a recession where it lasts about two quarters, by the time we get to the second half of the year, markets should be pricing in a recovery, said Ed Clissold, chief US strategist at Ned Davis Research. If there continues to be favorable inflation data and if earnings come in pretty good, you could make the case that hedge funds will continue to cover their short positions, which would be pretty good fuel for the rally to continue.

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