Traditionally, a new president enjoys a "honeymoon" period during his first few months in office but it seems that Goldman Sachs (GS) doesn't like tradition. The investment bank tried to puncture the euphoria in the stock market over Donald Trump's victory by issuing a sober forecast of what the US can expect from his regime next year. Their conclusion:
The prediction comes as part of the team's annual not about the top ten market themes for 2017. Theme No. 1: Utter disappointment.
Actually, the theme was closer to "more of the same." GS thinks stocks are pricey already and the economy won't improve enough for profits to relieve some of the altitude in valuations. They are probably right and things might actually get worse if we get the long overdue recession.
GS expects bonds to drop another 0.5% over the coming year, which means they assume higher inflation and the…