Since the November election, the financial markets have priced in a more friendly business environment, with growth boosted by expansionary fiscal policy. However, the White House does not have absolute power.
By now, you have likely heard something, either directly or indirectly, about “The Great Rotation” from bonds into stocks.
The December Employment Report showed the job market to be in good shape. The pace of job growth slowed in 2016, partly reflecting tighter labor market conditions.
We live in a modern world of acronyms and buzzwords, and the financial industry is certainly no exception. In fact, it may be one of the worst culprits, what with FANG, ZIRP, TINA, BREXIT, QUITALY, BRIC, etc. all entering the lexicon over the last few years.
“It’s what you learn after you know it all that counts.” - Earl Weaver
As we enter 2017, we expect the current economic rebound to continue suggesting GDP growth will likely move toward the 3% level by the end of the year based on less monetary stimulus, more fiscal stimulus, a reduction in the corporate tax rate, and deregulation.
“Miracle on 34th Street” is a 1947 movie whose plot takes place between Thanksgiving Day and Christmas in New York City. It focuses on a department store Santa Claus who claims to be the real Santa.
The outlook for 2017 is now shaping up as a battle of ideas, though few seem to be realizing it yet. The stock market has risen since the election.
The absolute price of a stock is unimportant. It is the direction of price movement which counts.
Federal Reserve policymakers are widely expected to raise short-term interest rates this week. The policy statement should continue to suggest that, while the pace of tightening is expected to be gradual, action will remain data-dependent.