This just in: The pros say now’s a great time to buy. Especially bank stocks. Oh yes, load up on those Trump-lovin’ bank stocks. Careful with consumer staples, though. They’re getting a wee bit top heavy. Or just get long the S&P
and relax because 2017 is going to deliver the goods, according to Barron’s “Outlook 2017” round-up.
Yes, the experts have spoken! And we’d like to apologize profusely in advance for any influence they might have on your investment strategy.
“Wall Street’s seers expect the bull’s romp to continue well into next year, and posit a possible awakening among institutional and individual investors of the animal spirits that were dormant for the past seven years,” Barron’s Vito Racanelli wrote, using this chart to summarize the various targets:
As you can see floating around at the top of the bullish pile, Prudential’s Chief Investment Strategist John Praveen is feeling particularly upbeat with his target of S&P 2,575. While that’s a compelling, feelgood figure, and certainly worthy of our call of the day, we’re going to take this another direction and instead bestow the honor upon Salil Mehta of the number-crunching Statistical Ideas blog.
Although, to be fair, his is more of an anti-call than an actual call.
“A year-end market ritual two decades in the making: Celebrated Wall Street seers promote their ‘forward looking’ stock prices,” he said, referring to the Barron’s feature. Mehta backed up his case with a stat-heavy examination that reveals these guys historically perform worse than a coin toss.
Yes, worse than a coin toss.
“They have again obliged us today,” he said, “by misguiding investors and ordinary Americans with more random information that they claim emulates the future.”
Mehta, the former director of research for the Treasury’s Troubled Asset Relief Program, told the New York Times: “It’s not easy to be as bad as they are.”
The fact that Wall Street analysts annual mkt forecasts are bullish every year is a reason to simply ignore them, not to do the opposite.
— Jon Boorman (@JBoorman) December 18, 2016
The pundits occasionally get it right, however. And those that forecast Dow 20,000 by the end of 2016 — they do exist — well, they’re looking pretty good right now. But the clock’s ticking as we step off into the last full trading week of the year.
Key market gauges
Futures on the Dow
are pointing to a positive open, but it’ll take more than they’re currently showing us in these early stages to topple the big, round number. Gold
is moving higher, as is crude. Asian markets
closed mainly lower, and the major exchanges in Europe
aren’t showing much green either.
Read: What does Dow 20,000 mean for investors?
55% — That’s the portion of Americans who are concerned about Russia’s interference in the election, according to a recent poll. Will it matter to electors? Surely doesn’t look like it at this point.
“I am always wary of people who say ‘we have to run the country like a business’ — businesses aren’t responsible for defence or caring for the elderly. Businesses are driven with one guiding principle — to make the most money — and that should not be the role of the government.” — Wayne State University law professor Peter Henning, in a Guardian story about Trump’s wealthy cabinet.
The fake news theme is still raging, but, as this Daily Caller piece points out, the sites known for pushing that stuff out hardly get any traffic. On the flip side, Mark St. Cyr says there could be serious ramifications for Facebook
as it pursues ways to remedy the situation.
“Rogue One: A Star Wars Story” collected a massive $155 million in the U.S. and Canada this week, which, while huge, wasn’t enough to break the December record set by the prior “Star Wars” film. That one debuted with $248 million, to shatter all kinds of records.
Holidays at Mar-a-Lago, in one tweet:
Christmas @ Mar-a-Lago: @realDonaldTrump, relaxed and chatty, hosts press for drinks — off-record but pics OK @axios pic.twitter.com/lysW7FHzIl
— Mike Allen (@mikeallen) December 19, 2016
Ireland says the EU has overstepped its authority by ordering Dublin to recoup $13.6 billion in unpaid taxes from Apple, which plans to launch its own appeal against the decision.
A couple of deals coming in under the pre-holiday wire: Standard Industries will buy Braas Monier after sweetening its bid to seal a $1.15 billion deal. And Canadian insurer Fairfax Financial is buying Swiss-based but NYSE-listed Allied World for $4.9 billion in cash and shares.
As the year winds down, let’s take a look at how the world markets have performed since way back in the salad days of 2000, courtesy of Doug Short’s Advisor Perspectives.
As you can see, while the U.S. comprises about a third of the world stock market capitalization, its performance hasn’t even come close to the rallies we’ve seen in India
since the peak of the dot-com bubble.
It’s not particularly busy on the economic front in the first half of this week, but it picks up later, with some notable data from the housing sector. The University of Michigan’s consumer sentiment index will provide the capper on Friday. As for today, we’ll hear from Fed Chair Janet Yellen at 1:30 p.m. Eastern.
Read: Stocks get trump bounce, but not the real economy.
Another rich guy throwing an orgy or an entrepreneur? Or both?
The train that sounds almost too good to be true.
We read the tweets, but the city died anyway.
Are you a deplorable? Let’s find out.
National Geographic made history with its latest cover.
And now … the most important selfies of 2016, which has to include this shot of Hillary Clinton:
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