The end of 2016 marked an inflection point for markets, as many crowded trades unwound and investors placed their bets on how Trump's policies will affect the various sectors of the S&P 500. Below are five key factors to keep an eye on for equity investors.
1. Will we finally get inflation?
For eight years now, global central banks have been working to create inflation via quantitative easing - with little success in the US and outright deflation in Europe and Japan. Trump's election has rekindled "animal spirits" amongst market participants due to multiple inflationary prospects: billions in infrastructure spending, cash repatriation, tax cuts and immigration reform. However, the market appears too sanguine on the chances of full passage given typical government gridlock. With many stocks fully pricing in reflation, investors need to be wary of heightened expectations heading into first-quarter earnings.
2. Macro or micro?
It seems the baton
