Once again, I write about the upcoming US Stock Markets...
In early 2016, my annual prognostication had stated that the US Stock Markets would be up “in that 10% or better range”. The conditions for that to occur had to be; rising oil prices, a weakening
Turns out, oil did rise, the dollar strengthened, the US economy puddled along, only a .25% increase in
With the US Stock Market at all-time highs, experiencing the 2nd longest and the 4th largest Bull market in history since 2009, it’s hard to see how it could keep going. But it probably will.
Consumer confidence is at its highest level in 15 years, according to the Conference Board Consumer Confidence Index. Our new President has promised policies to spur economic growth and the markets are responding very well to the news and expectations. The Dow Jones is flirting with 20,000 for the first time in history.
My aggressive economist, Brian Wesbury at First Trust, has projected the Dow at 23,750 at the end of 2017 in his weekly “Monday Morning Outlook, December 27th, 2016”, or an 18.75% return for the year! We shall see. Most other economists from the major investment banks project anywhere from 2% - 9% for 2017, according to Business Insider, “Here's what 10 Wall Street pros are predicting for the stock market in 2017, December 19th, 2016”.
Economist Mohamad El-
In conclusion, it is said that bull markets are born in pessimism, grown on skepticism, mature on optimism and die on euphoria. As mentioned above, the current bull market is technically “old” when measured in duration and magnitude, and Investors are seemingly euphoric. That emotion often signals the end of a bull market. Political events (such as the Fiscal Cliff, Brexit or the U.S. election) may create volatility but typically do not end business cycles. Like 2016, we expect a volatile 2017 without a recession.