As highlighted in our earlier article (here), 2016 has been a good year for investors. In 2017, after strong uncertainties, investors gained confidence and the stock market experienced a rally during the post election weeks. At the start of 2017, AroniSmartInvest in Action® predicted two major factors expected to impact the stock market performance:
- Federal Reserve's continued policy of raising interest rates in 2017;
- The end-of-year rally was fueled in part by the 2017 US elections outcome. By late January, the new administration would be in place with a new agenda and new policies. Hence, Trump's policy agenda would determine in part, how the investors would behave.
AroniSmartInvest in Action™ promised to incorporate the two factors in analyzing the market and tracking the stock movement over 2017.
Since then the prediction have become true:
- On March 15, 2017, the Federal Reserve raised interest rates for the second time in 3 months. The benchmark was rased to a range between 0.75 percent and 1 percent, signaling the decision of the Federal Reserve to final moving towards end of its nine-year-old economic stimulus campaign, started in the depths of the 2008 financial crisis. What was intersting though, is Federal Reserve Chairwoman, Janet L. Yellen, declining to share the enthusiam observed in the stock market. Janet Yellen told the media: “The data have not notably strengthened, We haven’t changed the outlook. We think we’re moving on the same course we’ve been on."
- The stock market has in fact continued its momentum, confirming the prior analysis by AroniSmartInvest In Action®, that the hopes for Trump's policy agenda would trump the economic data and uplift the markets. After Janer L. Yellin's statements, investors went back to their bullish mood. The Dow Jones industrial average immediately gained 112 points, following the announcement.
Since January 1, 2017, the benchmark indices have performed as follows, in terms of price gain:
- Dow Jones: 5.90%, with a maximum increase of 6.85% reached on March 1, 2017
- S &P 500: 6.29%, with a maximum increase of 7.02%, reached on March 1, 2017
- NASDAQ: 9.66%, with a maximum increase of 9.68%, reached on March 1, 2017
The attribution of the gains varies, depending on who is being asked. However, there is almost a consensus among analysts that the significant portion of the gains can be attributed to the outcome of the US Elections. As of March 2017, AroniSmartInvest has identified the segments that may found in the right here.