2016 ends with record highs for US stock markets and strong gains elsewhere, as a post-Trump rally carries through into a new year and markets shrug off Brexit. But could 2017 be a year or reckoning as risks to the global outlook become reality? David Pollard reports.
Trump, Brexit, the Italian referendum. With record highs in 2016, it seems like nothing can throw equities off their stride. But if the bulls are in charge for now - the bears are lurking. 2017 a challenge - for Trump and corporate America to 'deliver' .... As a new president takes office. (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "In a nutshell, I think it's going to be quite hard for the equity markets to sustain the performance of 2016, particularly if earnings remain under pressure, as it seems to me they will." (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT, 7IM, JUSTIN URQUHART STEWART, SAYING: "What he says and what he can do may very well be very separate things indeed. So actually delivering on the promises is going to be his most difficult. And at that stage the markets get disappointed, and that's where your bubble goes 'bang'." Inflation is also back on the risk list - Trump's talk of infrastructure spending already driving up bond yields. Stock markets still unfazed - despite aggressive rhetoric from the Fed. (SOUNDBITE) (English) DARREN SINDEN, INDEPENDENT MARKET ANALYST, SAYING: "They've talked about multiple rate rises in 2017. Of course, they said that about 2016, and we only had one." Trump's own aggressive rhetoric towards China may also stoke fears of a trade war. Though China on its own may be enough to rattle sentiment. (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "Of course we know there are profound vulnerabilities and in particular the vulnerabilities that have not gone away associated with still mountainous levels of indebtedness." Something that could also be said of Europe's banking system ... (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT, 7IM, JUSTIN URQUHART STEWART, SAYING: "You've had the festering losses within the banking system in Europe lurking under the surface. Only now are some of these coming out and you can see the horrific banking pus which is there." 2016 - a year to remember, say the analysts. 2017 - already shaping up as one some may want to forget.