According to analysis by Pension Partners’ Charlie Bilello, the streak of total return gains from 2009 through 2016 was surpassed in only one prior period for the S&P 500, 1991–1999, and was tied by the run from 1982 to 1989 (Table 2).
TABLE 1: MAJOR INDEX TOTAL RETURNS (2009–2016)
TABLE 2: S&P 500—LONGEST CONSECUTIVE CALENDAR-YEAR WINNING STREAKS (1928–2016)
Bespoke Investment Group’s 2017 outlook provided a thorough look at how various market indexes, sectors, and geographies performed in 2016 (Table 3). Their analysis covers the post-election period, the second half of 2016, and all of 2016. They note,
TABLE 3: 2016 ASSET-CLASS PERFORMANCE (POST-ELECTION, 2ND HALF, FULL YEAR)
The consensus of major analysts is mildly bullish for the markets in 2017, with the average forecast for the S&P 500 calling for gains around 5%. Bespoke Investment Group cites several positive factors for the market entering 2017, including a pro-business administration in Washington, the potential for corporate earnings improvement, and a U.S. economy that has made significant progress on several fronts.
However, Bespoke notes that valuations may be a headwind for the markets, and that overly positive market sentiment usually leads to some disappointment. Their overall “more-cautious-than-usual tone” might also be partially attributed to a historical political cycle trend that has not been totally favorable: