It would be difficult to describe 2016 as anything but unpredictable. For all of the year’s ups and downs, investors head into 2017 with more optimism than we’ve seen in a number of years. The University of Michigan Index of Consumer Sentiment ended the year at 98.2 up 6% for the year leading to the highest level of the Sentiment Index since January 2004. An all-time record number of consumers (18%) spontaneously mentioned the expected favorable impact of Trump's policies on the economy. The prior peak (9%) was recorded in 1981 when Reagan took office. These “animal spirit” forces helped drive the S&P 500 approximately 6% higher from election day through year-end. Investors anticipate that friendlier fiscal policies will provide a shot in the arm to sluggish growth.
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