The equity market rally that followed Trump’s election was in our view largely driven by expectations of tax cuts increasing corporate earnings. For the positive momentum to be sustained there needs to be firmer prospects of economic growth gaining traction. It is here that the picture is complex. 

The past year has been one of multiple surprises. The year started with fears of a sharp deceleration in China, and worries over the implications of rising Fed rates for emerging markets. Some worried that the global economy could slip into recession. Britain was expected to vote to remain in the European Union, and almost all political analysts would have named Donald Trump as the candidate least likely to win the US presidential elections.