2017 Market Outlook: A Look At Key Sectors And Asset Classes


It looks like investors finally got it through there heads that many assets were stretched too far, and that some unwinding of the election trade was due.

Here is what I see for the first half of 2017:

S&P 500 Index (INDEXSP:.INX):  Short term bearish, potential pullback toward 2,200 – 2,230 area, then new highs in 2,400 – 2,500+ region. I have shared this 2017 market outlook / price target several times.

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Some areas of stock market seeing the most pain currently (and over the near-term): Russell 2000 (NYSEARCA:IWM), Financials sector (NYSEARCA:XLF), and Industrials sector (NYSEARCA:XLI).

Areas doing well in the near term: Consumer Staples sector (NYSEARCA:XLP), Utilities sector (NYSEARCA:XLU).

However, once this mean reversion ends, it’s very possible that financials and industrials will take us higher.

Emerging markets: EEM, EWZ, ILF – likely to see some leadership early 2017. Another mean reversion trade.

stock market investors research imageUS Treasuries:  I think treasuries have bottomed and could see a nice counter trend rally. I am long TMF (a leveraged short treasuries ETF). Once this counter trend rally ends, Treasuries could be a great short again.

Precious Metals: Looks like this sector has also reached a tradable bottom. I was stopped out of a gold position a couple weeks ago and now I’m looking for a decent entry. Frustrating!

Crude oil:  This could be very bearish here if the minor breakout does not hold.


Thanks for reading.  Reach out to me at arbetermark@gmail.com for inquiries about my newsletter “On The Mark”, if interested.


Twitter:  @MarkArbeter

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.