The 4 Hottest Stock Market Trends From 2017

These were some of the most notable headline-grabbing stock market trends of 2017

By Josh Enomoto, InvestorPlace Contributor

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Picking the most shocking or outstanding stock market trends of 2017 is a deceptively difficult task. With both the Dow Jones Industrial Average and the S&P 500 rattling off record-setting points, investor sentiment is obviously strong. In this scenario, one can almost get away with picking random names from hot-running S&P sectors.

However, with so many extraordinary events, a typical stand-out performance seems rather mundane. Inarguably, the most astonishing incident of 2017 was watching the Presidential inauguration of Donald J. Trump. A brash, former reality TV star, and a full-time soundbite, Trump broke every single rule in politics. Yet when the odds were most stacked against him, the mogul found a way to stun everyone.

President Trump’s policies and agendas will reverberate for years to come. Even if he loses the 2020 election, his administration has given a voice to the “disenfranchised majority.” Perhaps Trump’s greatest gift was to boost the political currency of the white working class. Suddenly, jobs that the mainstream didn’t care about (hello, coal!) took front and center stage.

However, Trump didn’t have a Midas touch for every challenge he encountered. His administration might go down as the most contested in U.S. history. Still, those that have doubted him have been proven wrong at every turn. The record-breaking Dow Jones is a testament to the unmistakable power of the “Trump card.”

Certainly, it has been a tough year to digest. Here are the top stock market trends of 2017!

Stock Market Trends: The Hated Bull Market Still Gets No Love

Stock Market Trends: The Hated Bull Market Still Gets No Love
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The election victory of President Trump was a complete shocker for Democrats. In their view, former Secretary of State Hillary Clinton had extensive government experience; based on pure probabilities, Clinton was the safe choice. When the futures market slumped after Trump’s victory was apparent, the left surely felt justified in their candidate of choice.

Indeed, declining investor sentiment was one of the stock market trends of 2017 that was predicted by many analysts should Trump prove victorious. Naturally, a vast number of Americans were jittery about what a Trump administration entailed. Nevertheless, the Dow Jones shrugged off those fears. The benchmark index gained nearly 8% between election day and December close.

January suffered a flat performance, giving one last bit of hope for bitter bears. But come February, the Dow Jones was seemingly hitting record points after record points. Year-to-date, the index is up 19%. Rather than a meltdown, we’re experiencing a “melt-up.”

However, this secular bull market wasn’t all glitter and roses. Primarily, fund managers experienced difficulties justifying their existence. If buying an exchange-traded fund tracking the broader markets could net double-digit returns, individual stock picking had to be phenomenal.

Business-media pundits are correct: this is the most hated bull market. And those that tried to bet against it have so far been burned, badly.

Stock Market Trends: Virtually Every S&P Sector Is a Winner

Stock Market Trends: Virtually Every S&P Sector Is a Winner
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If we look back from the future, 2017 may well be regarded as the year when a record number of stock-market “gurus” were born. As previously mentioned, the Dow Jones is melting-up, creating conflation between a superior strategy and plain luck. So long as you were bullish, the odds were extremely stacked in your favor.

Eight out of the nine S&P sectors are well into the black over a trailing one-year period. Only the Energy Select Sector SPDR (ETF) (NYSEARCA:XLE) is the sole loser. Quite literally, you could take a dart-throwing monkey or take wild shots in the dark: with sector ETFs and other broad-focused funds, you were much more likely to win than to lose.

Many of the S&P sectors had justifiable explanations and arguments. For instance, the top-flyer in 2017 is the Technology Select Sector SPDR Fund (NYSEARCA:XLK). Over the trailing year, the XLK is up 36%, while on a YTD basis, it has gained nearly 33%. Powerhouse companies like Microsoft Corporation (NASDAQ:MSFT) and Nvidia Corporation (NASDAQ:NVDA) make up the XLK’s top holdings.

Other S&P sectors jumped due to politics. The Industrial Select Sector SPDR Fund (NYSEARCA:XLI) responded very positively to Trump’s “Make America Great Again” message. The Financial Select Sector SPDR Fund (NYSEARCA:XLF) also found confidence in the White House’s pro-business approach.

However, I caution against being cavalier come 2018. That all S&P sectors are winning, and winning “bigly,” is rare. At some point, we’re going to experience a correction.

Stock Market Trends: Gold Did Not Glitter

Stock Market Trends: Gold Did Not Glitter
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If you have ever watched conspiracy related programming (think Alex Jones’ Infowars), you’ll notice that gold bullion plays a significant role. Long story short, most conspiracy theorists assert that the U.S. Federal Reserve is out to deliberately destroy the dollar. Once the greenback is out of the way, a new globalist reserve currency will be ushered in; hence, buy gold.

Many doomsday-bunker types bought gold in droves during President Obama’s administration. Although everyday folks may find such actions laughable, to the “doomers,” it makes perfect sense. I’m not here to start a debate, but what I was intrigued about prior to the 2016 election was what would happen to gold prices if we had a Commander-in-Chief that believed in this stuff?

After all, Trump agreed to an interview with Alex Jones, which was absolutely stunning on so many levels. This is the same Alex Jones that publicly cries that “9/11 was an inside job.” Ordinary politicians would be crucified for such a move. Trump became President of the United States.

However, for gold prices, it was largely for naught. Although the yellow metal did have a solid year (up 12.2% year-to-date), it simply failed the doom-and-gloomers’ expectations. The explanation is that gold swings on the fear trade, not the greed trade. Obviously, the Dow Jones rising to all-time records didn’t help matters.

Also, conspiracy theorists are caught in between a rock and a hard place. They want gold prices to rise, but they also want this President to succeed. Based on historical market dynamics, these are mutually exclusive phenomenon.

Watch this space in 2018: it will be very intriguing how this develops!

Stock Market Trends: Bitcoin Destroyed All

Stock Market Trends: Bitcoin Destroyed All

We can debate all we want about the Dow Jones, individual S&P sectors, or the gold market. Undoubtedly, the biggest winner of 2017 by a country mile is Bitcoin and the cryptocurrency markets. Late last year, Bitcoin was trading near the $1,000 level. At the same time, the Dow Jones was flirting with the 20,000 point level.

As I mentioned in January, Bitcoin hit its milestone before the Dow. And while the venerable index added more than 3,000 points since its achievement, Bitcoin added more than $8,600. It’s quite literally the biggest investment of this generation, and may become the biggest of all time. At this rate, the psychological momentum is so strong that $10,000 seems like a foregone conclusion.

Of course, at such an elevated price point, many are calling Bitcoin a bubble. Some day, the critics will be right. For now, I anticipate a war: will Bitcoin become a trillion-dollar currency before Amazon.com, Inc. (NASDAQ:AMZN) becomes a trillion-dollar company?

It may seem like a ridiculous proposition. However, unlike most other bubbles, Bitcoin is built on an emerging technology. The future of financial transactions will use a blockchain architecture similar to what we see in the original cryptocurrency. The same cannot be said about tulip bulbs or Beanie Babies.

Make no doubt about it: Bitcoin is the most important among the stock market trends of 2017. While it’s not legally a security, Bitcoin and cryptocurrencies have the potential to upend the comparatively antiquated Dow Jones.

Josh Enomoto owns Bitcoin and gold.


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