On Friday, investors cheered the
excellent jobs release from the United States, the positive statement from
Jerome Powell, and the announced talks between the United States and China.
Data from the Bureau of Labor Statistics (BLS) showed that the economy added
more than 312K jobs. This was a sharper increase from the previous month’s 176K
and the expected 178K. The unemployment rate increased to 3.9% as the
participation rate increased to 63.1%. Wages, a closely watched metric
increased by 3.2%, which was higher than the estimated 3.0%. It was the fastest
increase in years. The data was followed by an interview of Fed chair Jerome
Powell at the American Economic Institute (AEI). In the interview, he assured
the participants that the Fed will remain flexible when making interest rates
decisions. This was a reassuring statement coming after the Fed hiked rates in
December and pointed to more hikes.
Over the weekend, the deadlock in
Washington continued as the government shutdown entered its third week. The
partial government shutdown continues as differences in the legislative arm of
the government differed with the executive. This is because Donald Trump has
vowed to leave the government closed if he congress fails to fund his border
wall. Last week, the new congress passed a bill to open the government but
senate refused to take it up. Trump has also vowed to leave the government
closed for as long as it takes. As a result of the shutdown, farmers and other
agricultural investors will not receive the World Agricultural Supply and
Demand Estimates (WASDE) that is released by the USDA.
In France, Emmanuel Macron’s
government was under pressure over the weekend as the yellow vest protests
continued. More than 50K protestors took to the streets to protest Macron’s policies.
The protests started in November after the government moved to impose a new tax
on fuel as it tries to battle climate change. They have now metamorphosized to
become a major political movement determined to oppose Emmanuel Macron’s
policies. In response to the protests, the government has organized
consultative meetings in the country to discuss the underlying issues.
In Malaysia, the country’s king
abdicated move in a surprise announcement. The palace announced that King
Mohammed will step down from his role. He was scheduled to leave office after
three years. This came a year after he married a young Russian model. This
decision will not have any impacts on the market because his job is mainly
ceremonial.
Investors continued to worry
about Apple’s future after the company announced that it is experiencing growth
challenges. A Wall Street Journal article blamed the underperformance by the
company to the weaker sales of the low-end iPhone XR. Another company investors
were focusing on was PG&E, the California utility company. On Friday,
Reuters reported that the company was considering going bankrupt as it
continues to face lawsuits regarding the recent fires.
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