Weekly Market Commentary 04/28/2017

The financial markets continue to navigate a litany of contradictions, reflecting mixed readings on the economic, fiscal and geopolitical fronts. With a light calendar of data this week, the economy took a back seat to other developments that stand out for their ambivalent consequences. The French elections, for example, elicited a strong positive response in the markets as the far-right candidate Marine Le Pen came in second to a more centrist candidate, whose likely victory in the May 7 run-off reduces the odds that France would bolt from the EU. But neither Le Pen nor the likely victor, Emmanuel Macron, belong to mainstream parties, thus keeping alive the anti-establishment sentiment that has roiled investor psychology since the U.S. elections last November. That said, the French election registered on the positive side of the geopolitical ledger, igniting a risk-on trade early in the week that sent stock prices sharply higher.