By Anwiti Bahuguna, Ph.D.
There is a palpable enthusiasm that 2017 will be a strong year for markets. The Trump administration's policy focus on taxes, regulation and fiscal spending is expected to create growth. Signals of expanding U.S. economic activity have emerged, and the pickup in growth is global.
But we can't forget issues that defined the market before the election. Equity markets in general, and U.S. stocks in particular, have risen consistently since 2009 so it would be reckless to ignore the risk of a correction. More importantly, risky assets have enjoyed the tailwind provided by central banks, but that may be slowing down. Lastly, risky assets have not responded well to a strong U.S. dollar in recent years - and all signs point to a strong U.S. dollar.…