The year 2016 was a very interesting one for the global stock market. Early on in the year, we saw big declines as the Chinese economy fell apart, sending the global market into a panic. Nonetheless, around the middle of the year, things started to improve in a big way; and by the end of the year, the market ended on a strong note. So, what does the year 2017 have in store? Well, the truth is that there are strong arguments on both the bullish and bearish sides of the equation. Below, we’ll talk about both sides of the argument and what investors should be watching ahead.
The Bullish Side Of The Argument
First and foremost, there are plenty of experts that believe that the year 2017 is going to be an incredible year for the market. Ultimately, there are three reasons for this belief…
- Donald Trump – First and foremost, many argue that Donald Trump is great for the market. At the end of the day, he is the first billionaire business man turned United States President. That will likely bring positive changes for investors and businesses.
- Oil– Another big factor here is oil. In recent months, we have seen big production cuts from both OPEC and non-OPEC members. The bulls argue that this will lead to gains in oil, and ultimately, since oil largely dictates economic conditions, it will lead to gains in the market.
- Global Economy – Finally, the bulls argue that global economic conditions are better than they have been in some time and improving. At the end of the day, positive economic conditions generally lead to positive movement in the market.
Between these factors, the bulls argue that the year 2017 is shaping up to be an overwhelmingly positive one.
The Bearish Side Of The Argument
While there are indeed plenty of experts with bullish perspectives, there are also plenty of experts with bearish expectations of the new year. Here are the reasons the bears are bears.
- Donald Trump – First and foremost, many argue that Donald Trump’s tax plan is the reason that the December profit taking in the United States didn’t quite happen last year. The bears argue that as investors take their profits in January, the start of the declines is imminent.
- Oil – While many are praising the oil production cuts, the bears argue that they are not enough. Nonetheless, they have exaggerated inflation in the price of the commodity. As a result, the bears argue that when the post-cut data starts to surface, oil will start to decline, dragging the market down with it.
- Global Economy – Finally, while global economic conditions are improving, the bears argue that this won’t last. With Central Banks performing experiments and the Brexit still coming down the line quickly, the bears argue that 2017 is going to bring economic hardship for many.
What Investors Should Be Watching For
As you can see from the above, the bullish and bearish arguments both surround Donald Trump, oil and global economic expectations. With that said, investors should watch all of these stories closely in order to determine where the market is headed as we move forward.