Can US stocks in 2018 repeat the huge gains of 2017?

After a banner year for US stocks, that saw the Dow hitting repeated records, Wall Street strategists predicted 2018 would see more moderate gains and increased volatility as markets retreated in the final session of 2017 on Friday.

A late sell-off pushed the market into the red amid declines in Apple, Amazon and some other high-flyers, but the decline didn’t put much of a dent in a year of records and soaring valuations.

Analysts expect many of the positive conditions that boosted equities in 2017 to persist in 2018, including robust earnings growth thanks in part to US tax cut signed into law by President Donald Trump and solid conditions in many overseas economies.

However, on the downside, they see little chance of a repeat of the extraordinarily low volatility seen in 2017, which led to exceptionally few pullbacks in US stocks.

“2018 should be a good year, but not a great year and it might require a little intestinal fortitude,” said Sam Stovall, chief investment strategist at CFRA Research. “We will get more volatility for less return.”

And Matthew Miskin, market strategist at John Hancock Investments, said, “We see more modest returns in 2018 because it’s already priced in.”

“Investors will want to prepare for greater volatility.”

The Dow Jones Industrial Average jumped 25 percent in the year, ending Friday’s sesson at 24,719.22 after scoring 71 new records, the most since the index’ creation in 1896.

The S&P 500 rose 19.4 percent to close 2017 at 2,673.61, while the tech-rich Nasdaq Composite Index surged 28.2 percent to 6,903.39, after briefly crossing 7,000 for the first time earlier in December.

Other leading bourses also enjoyed rich gains, including in Europe and especially Asia, where Hong Kong jumped more than a third and Tokyo pushed nearly 20 percent higher, propelled by strengthening economic conditions in Asia and positive momentum from US markets. (AFP)