Equities performed within expectations in 2016. Will it be the same in 2017?

SINGAPORE (Feb 1): Bank of Singapore had been successful in predicting the trends in the equity markets in 2016, but concedes that the uncertainties from Donald Trump’s administration has made the job of making accurate market predictions far more difficult in 2017 than in past years.

According to BoS’ investment strategist James Cheo, a good scenario would be where Trump’s fiscal thrust and deregulation added to the US’ current financial situation. On the other hand, a negative scenario would occur if Trump’s fiscal policies led to inflation outpacing growth.

Cheo admits that either of these scenarios would have a lower probability of occurring. What’s most likely to happen is the position between both scenarios, with moderate fiscal policy and some deregulation, which still leaves plenty of uncertainty in equity returns.

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