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.