We would not be at all surprised by a fairly sharp decline in the market in the first quarter of 2017.
Here are the top five reasons (excluding market technical indicators) that you shouldn't be, either:
1. There Are No Profits
Corporate profits have been virtually flat since 2011 and were below average in the first half of 2016. From 2011Q2 to 2016Q2 (the last quarter for which data is available), profits after taxes and adjusted for inventory and capital consumption averaged just $1,557.1 billion with a mean of $1561.5 billion. But profits in the first half of 2016 averaged just $1,526.3 billion.
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Moreover, given the strength of the dollar in the latter half of 2016, foreign profits, particularly from eurozone countries, will likely be lower in 2016Q4 because they will be translated at the average rate for the fourth quarter. For example, €1,000,000 in sales in…