What Could Derail the Bull Market in 2017?

2016 is coming to an end and it’s doing so with a proverbial bang. It is remarkable really considering 2016 started with a proverbial bust. What lays ahead for certain is unknown to all, yet the capital markets sure do have some predilections about what might unfold in 2017.
Those predilections boil down to two words: stronger growth.
That outlook has been forged on the expectation that President-elect Trump and the Republican-controlled Congress will put their words into action and implement policies that lead to lower tax rates, reduced regulations, infrastructure spending, and a repeal and replacement of the Affordable Care Act.
In brief, there is a presumption that both consumers and businesses will have the capacity to spend more in 2017, driving faster rates of economic growth by way of a pickup in personal spending and business investment.
The question before everyone today is, just how much of that expected growth has been pulled forward into stock market returns already?
The objective data says quite a bit, which is why our baseline – and fundamental – outlook for 2017 isn’t wildly optimistic.

This post was published at FinancialSense on 12/19/2016.