Wednesday, November 30, 2016

Stock Market Forecast December, 2016 to June 2017: Flat

My statistical model expects the U.S. stock market to tread water for the first half of 2017: no net gain and just about a 50/50 chance of breaking even.

The model sees no reason for the stock market to do much of anything other than fret.  Stocks are making new highs. Gross Domestic Product and employment have been rising. Interest rates are still incredibly low.  Odds of a near-term recession are fairly low.

The market has priced in all of this good news, so the model sees little upside potential. There could certainly be a significant surprise to the downside -- but the model does not see any of the usual culprits ready to strike.

None of this, of course, means that stock prices will actually laze around.  It just means that the market is going to have to do its gyrations without much of a push from the factors that historically have led to major price movements.

Enjoy the rest of the year!


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