U.S. stock market indices continue to reach new highs and major global economies are growing in sync for the first time in a decade. Corporate earnings have reached record levels, business confidence indicators are climbing while inflation remains in check. There is the real possibility of tax reform, business deregulation is gaining traction and a new look for the U.S. Federal Reserve is on the horizon. What might it all mean for the markets and investors in 2018?

U.S. economic activity surges

Already buoyed by rising business and consumer confidence, a series of record-setting stock market rallies and an improving labor market – the U.S. economy may further accelerate in 2018.

“Based on our analysis, we project U.S. gross domestic product (GDP) growth in 2018 at 2.9%, up from 2017’s forecast growth of 2.3%,” says Derek Hamilton, Ivy Global Economist.

Overall business optimism is a key component of the U.S. economy and continues trending upward. Heading into 2018, small business owners have lofty expectations on increasing sales and adding headcount, and believe it’s a good time for expansion, according to the Small Business Optimism Index. In November, the index soared to its highest mark since 1983, and the second-highest reading in the index’s 44 years of existence.

Small business optimism still rising

Large companies are equally confident as indicated by the CEO Economic Outlook Index, a composite of corporate executives’ sales projections, capital spending forecasts and hiring plans over the next six months. In December, the index reached its highest level in six years.