2017 was a spectacular year for stocks, as investors rallied behind expectations of faster economic growth under President Trump. The new administration struggled to get its agenda off the ground in its first 11 months in office, but that didn’t stop the U.S. economy from putting together its strongest back-to-back quarters of growth in over two years.
Gains on Wall Street were largely bereft of the fundamental drivers that usually underpin a bull market, leading many to speculate that the rally is overdone. In 2018, the Trump narrative, as well as many others, will be put to the test. Below, we look at five factors that will impact the markets in the coming year.
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Factors to Watch Out For
1. Trump policies
After a year of many failed starts, President Trump will attempt to assert his agenda in 2018. With midterm elections looming, the administration is expected to act with a greater sense of urgency on issues related to tax reform, deregulation and infrastructure. The debate over repealing and replacing Obamacare is also expected to continue as Trump looks to make whole on his campaign promises. A failure to deliver could sap much of the post-election euphoria from the market.
