The late-year rally fueled by the U.S. election has pushed stocks to peaks, which has seen some investors express caution that the market could be primed for a spill to start 2017. While we would be hesitant in broadly buying stocks at the current juncture and would not be surprised to see some consolidation in markets in the near term, we believe stock markets will once again generate positive returns in 2017.
Key themes for the year ahead include:
The continued rise of interest rates, and an increase in inflation, with the pace of rate hikes (from the US Fed) to be watched closely. While rising bond yields/interest rates are usually a negative for earnings growth and company profitability, we believe this will be offset by stronger global economic growth in 2017.
Politics featured heavily in 2016, and 2017 will see more of the same. There has been a shift towards the right in recent times, as populist politics have taken advantage of disgruntled voters. There are...
Stock Markets, Simplified.