The first week of the new year will be busy as the December job report will be on Friday, and many investors may be looking for ways to repair their portfolios after battering 2022. After a negative year, the stock market’s biggest losers could be winners next year. Investors may have been hunting for bargains in the most damaged sectors – such as technology and consumer discretionary. The good news for investors is that the broader market is up 81% in the 12 months following a down year, according to CFRA. “History suggests playing from ‘first to worst’ by exiting the best defensive group during a downturn and playing to the most distant sector,” said Sam Stovall, chief investment strategist at CFRA. The defense utility sector was one of the best performers, down only 1.4% and second only to the energy sector’s 59% gain. Stocks closed 2022 with their biggest losses since 2008. The S&P 500 closed at 3,839.50, down 19.4% for the year, although it gained more than 7.1% for the fourth quarter. The index was slightly negative in the last week of the year but fell 5.9% for the month of December. The Nasdaq fared worse, with a 33% decline for the year. What to watch Friday’s jobs report is one of two big events on the market calendar in the coming week. The Federal Reserve released minutes from its December meeting on Wednesday at 2 p.m., and investors are hoping for clues about the size of the next rate hike and its future goals. The jobs report is particularly important because it is the last employment report the Fed will consider before its next meeting, on February 1. After a 50 basis point increase in December, many investors are now looking for a 25 basis point increase in February. A basis point is equal to 0.01 of a percentage point. CNBC’s Pro Guide to Investing in 2023 Here’s how the US economy can escape recession in 2023 Oil is expected to remain volatile in 2023, but prices could depend on China reopening Top Wall Street strategists see a bumpy 2023 ahead with yields the minimum for stocks expected by economists. 217,500 jobs were created in December, compared with 263,000 in November, according to Dow Jones. The unemployment rate is expected to be held at 3.7%, and average hourly wages will rise by 0.4%. “It will be interesting to see how the market interprets a very hot or very cold jobs report,” said Julian Emanuel, head of equities, derivatives and quantitative research at Evercore ISI. “In all likelihood, the good news will continue to be bad news for the stock market as the Fed is all focused on cooling the labor market.” Economists expect the labor market to start slowing, and many expect to see negative numbers for the next few years. The labor market remained strong, even as the Fed raised its target range for the fed funds futures target for the seventh time since March. “Our view is that in the next month or two, the surge in layoff announcements will likely be met by an increase in jobless claims … that you haven’t seen yet,” Emanuel said. “It may be due to the fact that the wave of layoffs so far has been white-collar oriented, so there have been severance packages rather than ‘see you later’ terminations.” History is a guide Before 2022, the S&P 500 was negative for 21 years since 1945 and was higher about four out of five times a year later. The average profit in the following year is 14.2%. But when the losses are greater – double-digit declines – gains are not so great. “Going back to World War II, there were 12 times the market went down by double digits,” said Sam Stovall, chief investment strategist at CFRA. “In the following year, the market rose 7.8%. It rose 73% of the time. For all years since 1945, the S&P 500 has averaged a gain of 8.6% and rose 70% of the time. Stovall said that after every year of decline in the past 31 years, The four worst performing sectors in the negative year rose an average of 14.8% in the next 12 months, and they beat the market 56% of the time. [S & P data on sectors begins in 1991.] But the four outperforming sectors in the down year continued to rise, with an average gain of 11.6% in the new year. However, the sector only beat the market 22% of the time. The worst performing S&P industry sector in 2022 was communications services, down 40.4% on Thursday. The sector includes internet companies such as Meta Platforms, which is down more than 65% on the year. Next is consumer discretionary, off 37.6%. This includes retailers and Amazon, which are down about 50% in 2022. Tech is the third worst, down 28.9% and real estate is down 28.4%. Calendar next week Monday New Year’s holiday Markets close Tuesday 9:45 am S&P global manufacturing PMI [December] 10 am spent construction [November] Wednesday Vehicle sales for December 10 manufacturers ISM [December] 10 am JOLTS [November] 2 pm FOMC minutes Thursday 8:15 am ADP payroll data [December] 8:30 am Weekly unemployment claims start 8:30 am International trade [November] 9:20 am Atlanta Fed President Raphael Bostic 9:45 am S&P Global service PMI [December] 1:20 pm St. Louis President James Bullard Friday 8:30 employment report [December] 10 am ISM service [December] 10 am factory order [November] 11:15 am Fed Governor Lisa Cook 11:15 am Atlanta Fed President Bostic 12:15 pm Richmond Fed President Tom Barkin 3:30 pm Atlanta Fed’s Bostic