I do not own a crystal ball and therefore what I am writing is not a prediction of things to come, but certainly things which you can look out for in 2018 which can alter the economy and financial dynamics in 2018
A weaker USD, brought about by an uncontrollable spending by the US government and fall in tax revenue. The USD is also being challenged by the adoption of international transactions with alternate currencies (including cryptocurrencies) which will weaken the demand for USD.
A weaker USD will spark inflation, and this is already being seen in the commodity prices and precious metals. The Fed could hike interest rate aggressively or reduce the balance sheet further to prop up the USD, but reducing the balance sheet and hiking interest rate aggressively will hit the economy and stock market, besides increasing the interest payment of debts owed by the public and private sectors.
Geopolitical tensions could remain high in the Korean Peninsula, Middle-East and Ukraine. This could spark an oil rally, and will spread across other commodities, thus pushing inflation higher. Oil E&P and services companies could benefit. However it is best to avoid shale oil producers as their debt level is just too high.
Against a backdrop of weaker USD, inflation and a Fed which is caught in a corner between easing and tightening, precious metals could rise. Miners and related ETFs could benefit
New technology that benefits the environment and green energy plays could be another beneficiary of any significance rally in the oil price. Utilities could also benefit.
Because of the inflationary pressure and higher interest rate, commercial real estate could suffer. Best to avoid this sector. According to CNN, more than 8,000 stores have closed in the US in 2017, more than the 6,000 plus stores closed in 2008 during the height of the Global Financial Crisis
Central Banks and commercial banks will impose many restrictions on crypto currencies trading for fear of the loss of confidence in the fiat curreny system. But their actions could likely backfire as the adoption rate grows and demand escalates, thus pushing the crypto currencies prices to even higher levels. However, volatility will be high with wild swings on both sides.
China could see greater adoption in trade using the RMB instead of the USD. Therefore the RMB could strengthen against the USD. Could see further development of the physical gold trade network among the BRICS nations.
The ECB, like the Fed will be caught in a corner as the peripheral countries in the EU continue to suffer economically and financially. There could a rebellion among some member states with threats of pulling out the of EU. This could cause turmoil within the EU. I would expect more bank crises to happen in Spain and Italy.
In Japan, the only country that allows crypto currencies to flourish, may see surprise economy growth as citizens use their new found wealth to consume. The Yen may strengthen against the USD as a result. This could spark a change of opinion in crypto currencies in some governments and push adoption across many countries.
There you have it. It is entirely my opinion of course and should not be treated as a financial advice.
Have a HAPPY AND PROSPEROUS 2018!