As 2016 comes to an end many analysts will feature writings that tell you what happened in 2016 and the significance of those events. While it is always nice to know where we came from that doesn't help us make money in 2017. While everyone focuses on the year end reviews I thought I would dive into my thoughts and expectations for 2017.
First some good news. In the latter part of 2016 Gold (NYSE: GLD) became discounted relative to the dollar and many people thought it would bounce. The problem is that gold is a global commodity and relative to other currencies it was still expensive. As we head into next year I expect that to change. As gold begins to look attractive in other currencies I expect gold to move at least the highs of 2016.
Next is the market. I hate to be the pessimist but I expect 2017 to be a down year for the S&P 500 (NYSE: SPY). For the first half of 2017 there is just simply too many unknowns. One of the first unknowns is our new President. While I am not speaking badly of him, we just don't know how a rookie president will be able to perform. The other unknown is earnings. Analysts have some pretty lofty earnings expectations for the S&P. While the banking sector may be able to meet expectations, I see tech, and retail disappointing the street.
So let's talk about retail. Unless you are Amazon (NASDAQ: AMZN) or maybe one or two other names, your dead. I predict that 2017 will be the year of many well known retail names closing shop. We have already lost a few, but with the focus on the elections almost no one noticed. I see this as a major focus in 2017 which will hurt the sector (NYSE: XRT).
Lastly, let's talk Brazil. Much of the bad news in Brazil was missed due to the Olympics and the media coverage of our elections. Between the historic recession over there and political woes Brazil has had a bad year, at least media wise. If you were to look at its stock market (you could use the Brazilian ETF (NYSE: EWZ)) you see a particular interest by the Bulls. I see this as a building trend that continues into the later part of next year.
There you have it. Brazil and Gold to stand out, and Retail and the markets to struggle. No matter how it shapes up I wish everyone of you a safe, healthy, and prosperous 2017.