The world does not always come at you the way you expect.
In lieu of a “Market Update” this week, I would like to direct your attention to two pieces that we (Baird) published last week.
The first piece is our 2018 Economic & Stock Market Outlook (Clouds Could Test Investor Resolve).
While the weight of the evidence tilts bullish for now, we identify three key themes that could pose a test for stocks next year. The intensity of these challenges remains to be seen, but investors should brace themselves now for a ride that could be considerably rockier than the smooth climb higher experienced in 2017.
We also encourage financial market participants of all stripes (ourselves included) to remember that there is a reality larger than the markets in which we all live.
The second piece is a Weight of the Evidence (Weight of Evidence Bullish as New Year Approaches) update.
As we move toward 2018, the path of least resistance for stocks remains higher. Elevated valuations and excessive optimism remain headwinds, but they are more than offset by bullish economic fundamentals, favorable seasonal patterns & trends, and strong broad market participation.
Fed policy remains neutral in front of this coming week’s FOMC meeting and is going to be an area of great focus as we move into and through 2018.
Finding ways to listen to and interact with those with whom we may not agree is a great way to participate in this reality and enlarge our perspective.
Thanks for reading our research.
Twitter: @WillieDelwiche
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
