Market Rooster Brings On The Fiery Hens!

The Year of The Fire Rooster Part 3

With about 7.5 billion people living on the planet, 1.5 billion of them celebrate the Chinese New Year. Approximately 2.5 billion road journeys will occur while millions more will travel by air or rail to celebrate with family.

Why does this matter?

Modern psychological and economic research identifies herd behavior in humans to explain the phenomena of large numbers of people acting in the same way at the same time. Collective consciousness.

If billions of people optimistically believe that the fire rooster is good for the stock market, then any surprise the Dow finally visited 20,000 just days before the new year begins?

The Trump bump alone cannot take the credit.

If Chinese politics have anything to do with it, President Xi Jinping just stated his intentions to offer a vigorous defense of globalization thereby signaling Beijing’s desire to play a bigger role on the world stage.

I have no knowledge of how closely President Xi follows the predictions for 2017, this year of the fire rooster. However, fun to conjecture whether his recent comments at Davos reflect the open-minded, confident and innovative implications the fire rooster conveys to solve obstacles.

At least, according to Raymond Lo, until August and October, which will bring serious setbacks.

What happens when the fire burns too hot?

In China, Goldman Sachs Research Chief and Asia-Pacific Economist Andrew Tilton sees potential for “additional gains from productivity improvements in India, Indonesia and the Philippines.”

In the U.S., Goldman Sachs Researcher Jan Hatzius sees “above-trend growth and potential fiscal stimulus causing a modest overheating in 2017 and 2018, putting upward pressure on inflation, interest rates and the dollar.”

Coupling those thoughts along with President Trump’s more isolationist stance and withdrawal from the Trans-Pacific Partnership, Lo’s interpretations of the fire rooster could very well turn out spot on.