The Times They Are A Changing

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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