U.S. unemployment notched down to a very low level of 4.3% while average hourly earnings continued to show healthy growth. Though inflation is still tame, the potential for future wage growth provides the Federal Reserve support for another rate hike. As Janet Yellen’s current term is set to expire February 3, 2018 and it is unclear whether she will be reappointed, there will be heightened attention on all data that may shape Fed policy in the months to come. Global relations heated up this week as President Trump was compelled to sign a bill that limited his power and issued sanctions against Russia, Iran, and North Korea and trade talks with China continue to be tense.

The Dow Jones Industrial Average closed above 22,000 this week as corporate earnings results were stronger than anticipated. The positive news on the earnings side was offset by continued Washington turmoil and stock prices reacted negatively to the news that the Russia investigation added a grand jury. On balance, U.S. large caps posted a slight gain and small cap stocks declined by 1.2%. On the bond front, the strong employment data countered earlier drops in yields while Greenspan’s comments about a potential bond bubble impacted the headlines more than market prices during the week. Commodities were “on sale” again as the five year annualized loss is now nearly 12%.