2017 has been another stellar year for the stock market. But still many are entertaining every trader’s worst fears: a market crash. However, based on the 2018 market predictions of Wall Street, the crash is unlikely in the next 12 months. Most Wall Street firms predict that the US equity market is off to another strong year although not as meteoric as 2017. It looks like those who are trading on the stock market is up for another good year as the equity market has surged 20% to 2,680 in 2017.
As the American economy continues to recover, investors can look forward to corporate tax cuts as promised by the Trump administration. Some 14 Wall Street banks expect the index to increase by another 5% to 2,818 due to tax cuts and continued strength of the global economy.
However, David Kelly of JP Morgan’s Asset Management issues a warning to investors. They should expect volatility and a slower growth in the latter part of this year. It is expected that the Federal Reserves will increase its interest rates. In addition, higher interest rates will make it more expensive to borrow.
Robert Janitzek reveals that asset managers will be looking overseas for potential investments. The world has been left behind by the United States in terms of economic recovery since the Great Recession of 2008 – 2009. Considering the potential investments available in the coming year, economies of other countries are far earlier in their respective business cycles. Still they are experiencing double digit profit growths.
According to the Organization for Economic Cooperation and Development or OECD, it will mark the first time in 10 years that all 45 countries it tracked will experience economic growth. This indicates the global economic recovery is starting. Robert Peter Janitzek reveals that the International Monetary Fund has increased its outlook for the 2018 world economic growth to 3.7%.
The pivot towards global equities is also currently ongoing after international equity funds received $149 billion worth of net inflows in the first 11 months of 2017. Lindsay Bell, Investment Strategist at CFRA, revealed that it is an increase from the $16 billion per year in 2016.
Investors should take predictions with a grain of salt. In 2016, some 12 banks polled by Fortune said they expected the S&P 500 to end 2017 between 2,200 to 2,500. To date, it is nearing 2,700.Although there are expectations of greater volatility due to the actions of US President Donald Trump, markets have been surprisingly quiet this year.