2016 has been a good year for investors. After strong uncertainties early to mid-year, fueled by the saga of the unusual U.S. elections, investors gained confidence and the stock market experienced a rally during the post election weeks. At the start of 2017, the stock market indices are at their new peaks. Yet, the investors may be wondering what to expect for the upcoming year: a decline, an uncertain seasaw movement, or a sustained rally.
As of the end of 2016, the benchmark indices have performed as follows, in terms of price gain:
- Dow Jones: 13.42%
- S &P 500: 19.54%
- NASDAQ: 7.5%
A significant portion of the gains is attributed to the outcome of the US Elections. As investors are contemplating what to do for next year, some trends may have started to emerge. Over 2017, two major factors will be impacting the stock market performance:
- Federal Reserve is expected to continue its policy of raising interest rates in 2017;
- The end-of-year rally has been fueled in part by the 2017 US elections outcome. By late January, the new administration will be in place with a new agenda and new policies. That is when the drivers of the latest rally will be tested. a market lifted in part by hopes for Trump's policy agenda could be deflated should any of those hopes be dented once he begins in office.
Usually, January is a difficult month for equities. Futures for all major indices are already trending down. However, this trend may not be an indicator of what to expect, yet.
AroniSmartInvest in Action™ will incorporate the two factors in analyzing the market and tracking the stock movement over 2017.