Shares have experienced their traditional Santa Claus rally over the Christmas/New Year period. The Australian Share Market moved 4.21% higher over the December quarter with the S&P/ASX 200 Index finishing the year at 5,665, relative to the September quarter close of 5,436 points.

But, at some point in the first quarter a correction or consolidation in shares and the $USD is likely, as sentiment has become stretched on the upside. There will also be a nervousness post Trump’s inauguration around what the new US President will actually do, US-China tensions and the negative consequences domestically of a higher $US.

However, we see share markets trending higher over the next 12 months helped by ok valuations, continuing easy global monetary conditions, fiscal stimulus in the US, moderate economic growth and the shift to rising profits for both the US and Australia.

Please click here for further detailed information regarding the market outlook for 2017.