After gains in 2016, stocks could see pullbacks

Stock markets mostly rose in 2016.

The United States stock market led the major markets. The Standard & Poor's 500 Index rose 9.5 percent.

Asian stocks saw smaller gains. The MSCI All-Country Asia Pacific Index rose 2.3 percent.

However, despite a year-end rally, European stocks failed to completely erase losses at the beginning of the year. The STOXX Europe 600 Index ended the year down 1.2 percent.

Some analysts think a short-term pullback in stocks is likely.

Diane Jaffee, senior portfolio manager at TCW, said that selling to take advantage of possibly lower taxes this year could result in pullbacks.

Mark Arbeter, president of Arbeter Investments, wrote in a note that the softness at the end of 2016 indicates that “some unwinding of the election trade was due”.

However, some anaysts are optimistic for 2017 as a whole.

In an article for ABC News, Dave Sheaff Gilreath, a founding principal of Sheaff Brock Investment Advisors LLC, said that “investors could be in for a very good year”. He wrote that while “the market has probably gotten a little ahead of itself in the short term ... the tea leaves for all of 2017 look good”.