We’ve been doing some de-cluttering at my house, adapting to life as empty nesters. During a review of some long-forgotten storage bins, I found the very first tax return I ever filed. It listed income of less than $2,000, earned lifeguarding and shelving books at the campus library.
As it is for people, so it is for business cycles, which can become more vulnerable as they continue. This theory will certainly be tested in 2018. The global economy enters this year with considerable momentum and lots of policy support.
The economic news this year could scarcely have been better. Strong growth, low inflation and rising asset prices in major markets will make 2017 one of the most successful years in recent memory.
There has been no let-up to the economic news cycle this year. Even the approach of the holiday season has failed to offer a respite, with tax reform deliberations ongoing through the holidays.
Times have changed, in more ways than one. This December has been especially hectic, with the transition in Brexit negotiations, U.S. tax reform debate and Bitcoin setting new highs every few minutes.
We’re thankful for this year’s economic growth in the U.S., which has exceeded most expectations. A soft first quarter has been followed by two quarters in which real activity expanded at an annual pace exceeding 3%.
Has the stock market gotten too expensive? Overall, we would say it hasn't. But we do feel some sectors are better positioned than others.