Stocks slumped for a third day in a row to close out 2016. What a year 2016 was with Brexit, Trump, Syria, Russia and all the other extracurricular activities! The Dow closed Friday off 57 points to 19,762 on weak trading volume.
For the year the Dow gained about 14% and outpaced the S&P 500 (10.8%) and the NASDAQ (9.1%) which usually does not happen but after the election, value type blue chip stocks like banks and materials took off while tech stocks went mostly flat after November 8th.
2017 will be an interesting year since new policies from the White House will take shape and in doing so could cause some volatility while offering potential upside if regulatory reforms are put in place. Economists like Steven Stanley at Amherst Pierpont are generally optimistic especially regarding regulatory reforms and are calling for US GDP growth at 3% or better for the next couple of years. Personally I think the US will continue to be an island of prosperity while Europe will struggle with the Italian banking crisis and rising nationalism while China could struggle with trade, currency issues and internal debt problems which could be made worse if realestate prices decline, unemployment rises and/or jobs begin to move back to the US under new trade deals. Stay tuned.
Markets will be closed on Monday and open on Tuesday.