Tags: WalletHub | predictions | Donald Trump | economy

WalletHub: Stocks to Grow 1 Percent Next Year, Among 10 Predictions

WalletHub: Stocks to Grow 1 Percent Next Year, Among 10 Predictions

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By    |   Thursday, 15 December 2016 11:26 AM

WalletHub, a personal finance website based in Washington, says U.S. economic growth won’t accelerate much while stocks will barely budge in 2017, the first year of the Donald Trump presidency.

Trump’s plans to stimulate the economy with trillion-dollar tax cuts and construction projects may find some resistance among debt-wary Republicans who control Capitol Hill, while higher interest rates may also damp growth, the website says.

The Federal Reserve yesterday raised interest rates for the second time in the past 10 years on signs that the U.S. economy is reaching full employment. Meanwhile, investors have pushed stocks to record highs after Trump’s November victory on the hopes of he’ll bring in a more pro-business administration.

Wallet Hub provides the following 10 financial predictions for next year (more complete data and analysis are on its website):

  1. GDP Growth Will Remain Anemic at 2.1 Percent: “The economy will start off well, but will likely slow after that, partly due to concerns about rising deficits and partly due to monetary policy that will tighten,” Michael W. Klein, professor of international economic affairs at Tufts University, told WalletHub.
     
  2. Unemployment Will End 2017 at 5 Percent: The jobless rate last month declined to 4.6 percent. “Unemployment is currently at the lowest point since 2007, indicating there is little room for further improvement,” WalletHub says.
     
  3. S&P 500 Stock Index Will Rise 1 Percent: “Stocks are still quite expensive, after all, with shares of the average company in the S&P 500 trading at roughly 26 times earnings, compared to a historical average of just under 16 times.”

  4. Auto Sales Will Surpass 17 Million: “It is unlikely that the U.S. auto industry’s boom can continue much beyond 2017. So we can expect sales volume to begin regression toward the historical mean of just over 15 million vehicles sold per year.”

  5. Existing Home Sales Will Rise To 6 Million: “We expect existing home sales to reach 6 million in 2017, increasing by roughly 200,000 units from the 5.8 million forecast for year-end 2016 by the National Association of Realtors."

  6. Federal Reserve Will Raise Rates Twice: “Both the odds and the FOMC’s minutes also indicate more than one rate hike in 2017, and we agree.” The Fed yesterday published a forecast of three rate hikes next year.
     
  7. Credit Card Debt Will Break Records: “With charge-off rates hovering stubbornly near historical lows and consumer performance clearly regressing, debt levels still have more room to run.”
     
  8. Consumer Credit Scores Will Peak at 675: “Credit scores have been rising steadily since the end of the Great Recession, and we can expect this recovery to culminate in 2017, as the last derogatory records from recession-era struggles fall off consumers’ credit reports.”
     
  9. Consumer Financial Protection Bureau Won’t Die: “President-Elect Trump rode a populist wave to the White House, and it’s hard to tell how much grassroots support there would be for eliminating an agency that provided nearly $12 billion in relief for consumers wronged by financial institutions in just its first five years of existence.”
     
  10. Charge-Offs Will Top $30 Billion, Limiting Credit Availability: “There will be a point where people can no longer afford minimum monthly payments on the prodigious amounts we owe, and it’s shaping up to come in 2017.”

 

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WalletHub, a personal finance website based in Washington, says U.S. economic growth won't accelerate much in 2017, the first year of the Donald Trump presidency.
WalletHub, predictions, Donald Trump, economy
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2016-26-15
Thursday, 15 December 2016 11:26 AM
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