Bob Doll's 2016 Recap and 2017 Outlook

As the markets diverge in the coming year, investment selectivity will become more important, writes Nuveen’s top strategist in a recent Barron’s article. He says that the post-election shift in financial markets led to his firm’s tweaking of predictions for 2017, and compares the original forecasts with actual trends:


  • US real and nominal GDP remain below 3% and 5%, respectively, for an unprecedented 10th year in a row;
  • US Treasury rates rise for a second year, but high-yield spreads fall;
  • Standard & Poor’s 500 earnings make limited headway as consumer spending advances are partially offset by oil, the dollar and wage rates;
  • Stocks outperform bonds for the fifth consecutive year;
  • Geopolitics, terrorism and cyberattacks continue to haunt investors but have little market impact;
  • Following three years of declines, the deficit rose by $150 billion this fiscal year to nearly $600 billion;
  • Republicans retain the House and the Senate and capture the White House.

Too Early to Call:

  • For the first time in almost 40 years, U.S. equities experience a single-digit percentage change for the second year in a row;
  • Information technology, financials and telecommunication services outperform energy, materials and utilities;


  • Non-U.S. equities outperform domestic equities, while non-U.S. fixed income outperforms domestic fixed income.

Doll says his predictions for 2017 (which will be available in January) will offer “broad themes” and that the firm expects economic growth to “accelerate modestly in the U.S. partially due to a range of pro-growth initiatives from the Trump administration. We think some of these same factors will likely put upward pressure on inflation, and [we] expect corporate earnings to continue to recover.”