Brad here. One of the great things about Commonwealth is that we have a team of expert analysts to provide valuable context on pretty much anything we need. Today’s post, from Nathan Parker, highlights the evolving energy landscape in the U.S. We must understand where we came from to know where we are going, and this is a great read that does just that for the energy sector. Over to you, Nathan.

It was the best of times, it was the worst of times. Catchy beginning, yes? Dickens certainly used it to good effect. As I was thinking about 2017 in retrospect, it seemed almost unavoidably appropriate.

Last week had only three major reports, but they covered the spectrum of economic activity. Overall, the news was quite good—with faster income and spending growth, as well as continued industrial and manufacturing expansion.

From an economic standpoint, many of the changes made so far by the Trump administration have been regulatory, not legislative. For all the media coverage on the health care battles, and now the tax reform battle, the real work has been down in the trenches, looking at regulations that constrain different industries and trying to repeal those deemed most onerous.

The latest change—which has received an unusually high profile—is the decision by the Federal Communications Commission (FCC) to repeal what are called the net neutrality rules.

On the economic front, the headline news is that the Fed raised rates another quarter point, as expected. So far, so what? But the details paint a more interesting and useful picture about what the Fed is likely to do with interest rates next year—and what that means for you as an investor.

Yesterday’s news that the Democrats won the Alabama special Senate election, for the first time in 25 years, rattled U.S. politics. By taking the Republican majority in the Senate from 52 to 51, it reduces an already tight margin for difficult votes. By signaling that even the reddest states are now potentially in play for the Democrats, it could be a bellwether for the 2018 midterms. But what does the Alabama election mean for the markets?

Market risks come in three flavors: recession risk, economic shock risk, and risks within the market itself. So, what do these risks look like for December? Let’s take a closer look at the numbers.

Last week was a busy one for economic data, with significant reports across all areas. The news was mixed, with declines in several areas, although the overall levels remain healthy. This suggests that the recovery continues but that it may be peaking.

As expected, November’s data showed some negative effects as the post-hurricane bounce of October moved out of the economic data. Still, the news continues to be positive. November’s results remain supportive of strong growth, with job growth coming in above expectations and confidence staying at high levels for both business and consumers. Fed policy, despite the expected rate hikes ahead, remains stimulative, although less so than in previous months.

Yesterday, we talked about some of the current economic trends that have carried the markets up but that may be shifting in the near term. Indeed, those negatives are potentially very real, and we need to keep an eye on them. But there are also several emerging positive trends that are likely to show up in the next 5 to 10 years that should help us ride out those changes. Consider this the Tigger response to yesterday’s Eeyore message.