2017 look ahead: global stock markets

Richard Hunter, of Wilson King Investment Management discusses what may impact global markets in 2017.

After what was one of the worst starts to a calendar year in history, 2016 looks to end the year on a high, with US markets at or near record levels.

The Dow is up about 14% year to date, and flirting with the 20,000 level, the S&P has seen gains of 11% and the Nasdaq is aiming for a 9% gain.

In Europe, the FTSE 100 hit a three-year low in February when talk about another financial crisis reared its head. But the indices rallied back, with the main London market up 28% since those lows – for the year, thats a 13%  advance. The DAX is up over 7% year-to-date and the CAC has posted a 25% gain since February.

The other two key market-moving events of 2016 took place in June with the EU referendum and November when Donald Trump won the US presidential election.

But Richard Hunter, from Wilson King Investment Management says despite initial plunges for sterling after the Brexit vote and Trumps surprise win, the markets showed resilience.

Richard also discusses the sectors which could benefit from a Trump presidency, including financials which have rallied on the prospect of lighter regulation. Infrastructure is another area that will do well with Trump promising to rebuild the country with a $1 trillion investment in roads, bridges and buildings to create an infrastructure which, he says, 'will become, by the way, second to none.

Richard also says Trump's proposal to offer US companies a one-time tax rate of 10% to repatriate their overseas cash could be positive not just for stocks, but for sentiment generally. Estimates vary, but some have suggested that as much as $200 billion could find its way back to the US, and of that figure as much as $150 billion could find its way into share buybacks.

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