Evolution of the main markets in 2016

After the surprises in 2016, what can we expect for 2017?

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Evolution of the main markets in 2016 Did you have fun this year? Well, it was not very bad, because there was some rollercoaster in the stock exchanges: Brexit, the unexpected victory of Donald Trump for the US presidency, the recent rate hike by the Fed, the Italian referendum or the ECB announcement about the cut of the money fuel have been some of the “funny” events for the markets. We are now at the end of the year with the sight on 2017. What can we expect? Certainly, there are some people who do not believe in financial predictions, because they are usually wrong, as Barry Ritholtz jokes in this post. Others make also fun about it with the outrageous predictions, as Saxo Bank has positioned in the last years. Others keep on doing some forecast about probable, but not sure, evolutions of the markets. For instance, Black Rock perceives three main trends:
  • Accelerating reflation in US
  • Low returns in investments that will force investors to more risky assets, as equities or alternatives.
  • Dispersion, with a widen gap between winners and losers in the stock markets.
The main risks for Black Rock are related to politics: the Brexit negotiation, the Trump agenda in US or the next elections in France and Germany are some critical points. The forecasts by Goldman Sachs coincide partially with Black Rock, because the main ideas are: higher growth but higher risks and slightly higher returns. The list could be longer, but there are some common points: investors perceive that politics will play a big role next year and will influence the market evolution and people will have to move to more risky assets. Monetary policy and currency evolution will also main themes, as they will condition trade and bonds. Yes, predictions are usually wrong, but we cannot avoid reading them, because, somehow, experts are anticipating probable trends. Investor: Be ready for risky times.

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