Fourth Quarter 2016 – “Unprecedented”
After experiencing one of their worst Januarys in recent memory, US equity markets staged an impressive recovery that accelerated during the last few weeks of the year. Questions concerning a deceleration of growth, particularly in the emerging markets, gave way as the year progressed; economic data improved and “animal spirits” appeared to rekindle as investors took a positive view of President-elect Trump’s campaign promises. The year proved to be a lesson in professional forecasters’ fallibility, with the Brexit vote and the US presidential election results catching many by surprise. The economic impact of these events yet unknown, the World Bank projects global GDP to accelerate in 2017 as emerging-market exporters benefit from improving prices for commodities and advanced economies benefit from fiscal stimulus. However, the bank’s report also mentions new risks that could hinder growth, including rising trade protectionism and uncertainty about policy direction in developed economies..