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Snap Poll: Most predict bullish stock market in ’17

Nearly two-thirds of respondents to this week’s RBJ Daily Report Snap Poll are optimistic about the stock market in 2017. And more than two-thirds are generally optimistic about the U.S. economy.

A quarter of respondents expect a double-digit rise in the stock market next year, and nearly 40 percent predict a single-digit rise. Thirteen percent each predict the market to be flat or a single-digit decline, and 11 percent predict a double-digit decline.

U.S. stock markets reacted swiftly as it became apparent Donald Trump would win the presidency Nov. 8, plunging in overnight trading. But when the closing bell sounded Nov. 9, the Dow Jones Industrial Average was up more than 250 points from its Election Day close.

The post-election surge has continued; on Monday, the Dow, S&P 500, Nasdaq Composite and Russell 1000 Index all closed at record highs—and one day later, the Dow closed above 19,000 for the first time ever.

Many market observers predicted a Trump win would trigger a stock selloff. Even though that has not happened, some still believe a correction next year is likely due to current valuations and global economic factors. Others, however, think the new president’s tax and regulatory policies could spur further stock gains.

Since falling to 6,548 in March 2009, during the Great Recession, the Dow has gained more than 12,300 points.

Last fall, 50 percent of Snap Poll respondents predicted the stock market was headed for a rise over the next 12 months. Of those, 14 percent saw a double-digit rise.

More than 420 respondents participated in this week’s poll, which was conducted Nov. 21.

Where is the stock market headed in 2017?
Double-digit rise: 25%
Single-digit rise: 39%
Basically flat: 13%
Single-digit decline: 13%
Double-digit decline: 11%

Looking ahead to the coming year, are you optimistic or pessimistic about the U.S. economy generally?

Optimistic: 69%
Pessimistic: 31%

COMMENTS:
The past couple of years were break-even in the stock market, no matter what you were invested in. It is time for that to turn with new hands steering the ship. It may take a couple of years to get the economy to start moving, but at least now we have a chance. It would help if we could get the media to give a positive push since there is much emotion involved to the market direction. Let’s all say together: 2017 is going to be a better year!
—Mark Williams

If Trump fulfills his promises and “drains the swamp,” then we will be headed for a short-term recession. We have been living on a massive Keynesian sugar high for far too long and unfortunately we are going to have to take our medicine at some point. However, if he does have the courage to do this, we can take the first steps toward fixing our economy.
—Kenya Burn-Moore, Rochester

With an all-Republican federal government and a large majority of Republican governors, we are headed back to 1950-1960 in terms of domestic policy and in terms of international trade barriers and tense international relations. Look for the markets to follow Washington back into the mid-20th century.
—Wayne Donner, Rush

Single-digit lower. Increasing yields in the bond market will cause shifts from large-cap value dividend aristocrats, utilities and REITs into shifts toward higher-yield bonds with shorter durations. However, all bets are off if there is some black swan event in world geopolitics such as a trade war or such as a catastrophic widespread terrorist event or such as one of the many debt bubbles bursting.
—Jay Birnbaum

The Trump administration is probably going to cut a lot of regulations foisted on business by Obama, causing a nice rise in stock prices.
—Mark Wilson

I believe the market usually declines in the first year of a presidential term. Small increases in the Fed funds rate will probably continue this tendency.
—David Rubin, retired

A new beginning—will have some inflation. Will be good for savers!
—John L. Sackett Jr., Byron

Short-term optimism. Longer term (two to four years) pessimism!
—Art Maurer

It’s gonna be great. Too bad the “SNL” cast doesn’t own stock!
—Jerry McCabe, Irondequoit

The Republicans are once again returning to trickle-down economics to supposedly “grease the wheels of commerce.” This will of course result instead in “lining the pockets of the rich” with little of it trickling down to the average person. Most economists predict a short-term minor burst, followed by long-term inflation and recession. In the meantime, expect scandal after scandal, all uncorrected by a neutered Congress and justice arm, as Trump hands out goodies to his rich friends in energy, the media and other sectors. He’s already using his influence as a “world leader” to pressure other countries to approve buildings in their capital cities. But the Republicans believe he will “clear the swamp.” Get ready for the crocodiles, folks; this swamp is only going to get bigger.
—Lee Drake, CEO, OS-Cubed Inc.

Personally, I am optimistic once again, probably the first time in the last eight years! New brooms sweep clean! An elected president with the backing in both houses of Congress and some pretty gutsy promises to fulfill! Let the good times roll!
—J.A. DePaolis, Penfield

The keys to the rise in the stock market for 2017 will be the tax cut for individuals (we are still a consumer-driven economy) and the severe reduction in corporate income taxes, which will bring back the billions the international companies have kept overseas. Almost everything Trump proposes goes toward jobs. The “shovel-ready jobs” from the Keystone Pipeline will benefit the economy greatly. Clean coal is on the verge of a major breakthrough, and the coal miners will go back to work. We are “the Saudi Arabia of coal” not the “Germany of European Social Democracy.” All moves toward energy independence will protect our economy and stimulate our economy. Hello, Capitalism. Goodbye, Socialism.
—Clifford Jacobson M.D., Vanguard Psychiatric Services PC

11/25/2016 (c) 2016 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.

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