Weekly Market Commentary 02/10/2017

In a relatively light data week, the financial markets seem to be taking a wait-and-see attitude. For the most part, investors remain upbeat about the economy; stocks forged into record high territory again this week, in part riding the tailwind of last week’s favorable jobs report as well as positive earnings news. More than 60% of the companies in the S&P 500 index that have reported fourth-quarter earnings have beaten expectations so far. That said, investor optimism is tempered by mounting uncertainty regarding the political landscape, including the latest brouhaha between the Trump administration and the courts. To be sure, the battle over an executive-ordered travel ban should have little effect on the economy’s near-term performance. But the escalating tension between two main branches of government could undermine confidence and eventually affect household and business behavior.