Year of Rooster Brings Wake-Up Call for Investors

2017 marks an awakening to a new day for investors. Maybe it's no coincidence, then, that 2017 is the Year of the Rooster, an animal linked to providing a morning wake-up call.

PNC's investment strategy team, led by Chief Investment Strategist Bill Stone, chose "Mo(u)rning in America" as the theme of their 2017 Investment Outlook. The team provides a look back at the end of 2016 and a look ahead to what promises to be an interesting 2017.

For the last quarter of 2016, the U.S. economy continued its expansion, consistent with PNC's outlook. Looking ahead, "We believe stock market volatility will be high in the near term as the market continues to digest economic data, outlooks and unforeseen events," Stone says.

Markets likely will be tuned to developments in politics, post-election, as well as important votes in France, Italy and elsewhere.

What Investors Will be Thinking About in 2017

Stone and his team focus on these uncertainties that will likely concern investors:

  • The first year of a new presidential term. As with any new presidential administration, "uncertainty is a certainty," especially with a change in party, he adds. In mid-January, Republicans will control both chambers of Congress and the presidency.
  • The timing of Fed interest rate hikes. PNC believes the Fed will raise interest rates twice in 2017.
  • Economic growth. PNC forecasts U.S. growth of 2.2 percent for 2017.
  • Populism and geopolitics. "We view growing populism (working people having the strongest political voice) and political events around the world as key risks for 2017," Stone notes. "Nations globally face key votes in their respective countries, which could have further-reaching ramifications."
  • Oil prices. "Oil prices appear to have bounced off the bottom," he adds. "But we will closely monitor oil supply and unforeseen events that could shift expectations for prices."

With all this uncertainty, Stone and his team emphasize that the best approach is to create a long-term plan with your financial advisor to ensure a healthy balance of diverse assets in your portfolio.

Bill Stone
Bill Stone says significant elections in the U.S. and abroad will likely influence the markets in 2017

The bottom line here is not to panic. There always will be periods of uncertainty, market rises and market falls.