Weekly Market Commentary 01/06/2017

As the curtain rises on 2017, the champagne keeps on flowing for stock investors, buttressing the pundits who view the coming year through an optimistic lens. While we too are cautiously optimistic about the economy’s prospects, it is hard to be overly ebullient given the myriad uncertainties regarding fiscal and monetary policies, the potential for global disruptions and the growth slowdown in the closing months of 2016. Clearly, the markets are banking heavily on the incoming administration’s pro-growth, pro-business agenda with its promises to lower taxes, ease regulations and increase spending aimed at jump-starting the economy’s growth engine. And with Republicans in charge of all three branches of government, the odds of getting something done on Capitol Hill are the highest in recent memory. But, as the old saying goes, there is many a slip between the cup and the lip. Indeed, being the majority in Congress still didn’t prevent the Republicans from an embarrassing misstep in their first days back from recess, having to retract a misguided attempt to abolish the independent ethics committee. Regardless of the merits of the attempt, the optics couldn’t be worse.