AUSTRALIAN SHARES
Earnings growth, particularly in the revitalised resources sector, and Wall Street gains are expected to push the Australian share market higher in 2017. The majority of companies will report interim earnings in February and annual results in August. However, Donald Trump's US presidency, European political instability - including Britain's exit from the European Union as well as elections in France, Germany and the Netherlands - and a slowing Chinese economy could all weigh on the downside.
THE FORECAST
Deutsche Bank expects 2017 to be a "decent year" for the Australian market, though volatility is likely to remain a key feature. Wilson Asset Management chief investment officer Chris Stott expects the market to be "heavily influenced" by global events, including how and when the UK exits the EU and its ramifications for the giant trading bloc.
RESOURCES
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
With iron ore prices passing US$81 a tonne and other commodity prices gaining ground, the outlook for the heavyweight resource sector looks bright. Giants BHP Billtion and Rio Tinto could see better times after annual losses last year, thanks to higher prices and improved demand.
BANKS
The financial performance of the big four banks - Commonwealth Bank, Westpac, ANZ and National Australia - could prove underwhelming given weak business investment and patchy real estate markets. However, their shares have performed strongly in December and so far in January.
AUSTRALIAN DOLLAR
The Australian dollar has gained ground since the start of 2017 after getting whacked following the US Federal Reserve's rate hike mid-December - hitting a six-week high of 75.19 US cents on Friday. Further gains throughout the year will be largely dictated by the direction of the US dollar.
DONALD TRUMP
US President-elect Trump is set to be sworn in on January 20 and investors will closely watch how his administration plays out against a backdrop of three expected US interest rate rises this year. The businessman has vowed to increase trade protection, declare China a currency manipulator and withdraw from the Trans-Pacific Partnership free trade agreement that includes Australia. He has also promised to boost spending on infrastructure and cut taxes in a bid to stimulate the US economy.
