Its back to normal service for the US economy, markets, and policy this week.
President Donald Trump’s agreement to sign a funding package temporarily reopening the US government failed to inspire Wall Street on Friday night.
US shares finished higher for a third straight day on Friday, but that was about it as they assessed the impact of the month plus shutdown on first-quarter growth and US consumer confidence.
Share prices retreated from their highs of the day and the S&P 500 fell 0.2% for the four-day week, the first weekly drop since the lead-up to Christmas. The S&P 500 ended Friday up 0.9%.
The Dow rose 0.7% and the Nasdaq Composite added 1.3%, despite a weak update from chip giant, Intel, and worries about a string of tech giants releasing 4th quarter results this week.
Both the Dow and Nasdaq had tint gains of 0.1% last week for the holiday-shortened four-day session on Monday.
It was the fifth consecutive week of gains for both indexes, which was the longest winning streak for blue-chips since July, and the longest weekly run for tech stocks in 14 months.
Data showing China’s economy grew in 2018 at its slowest pace in almost three decades triggered a sharp drop on Tuesday that the S&P 500 struggled to recoup in the subsequent sessions.
Concerns the partial government shutdown would weigh on US economic growth, and that less progress on trade talks between Washington and Beijing was being made than hoped, kept investors cautious through the back part of the week. The sort of inconvenience the shutdown has caused was brought into sharp relief on Friday morning when the Federal Aviation Administration decided to halt flights from a number of airports across the north-east, including some in the New York area, because of an air traffic controller shortage.
Reports that the US Federal Reserve officials are close to agreeing on plans to keep a larger portfolio of Treasury securities than they previously expected (which will be mildly expansive) helped support the market on Friday.
The US central bank releases its first policy decision of 2019 on Wednesday afternoon US time (Thursday morning in Sydney) and economists expect the ‘rate rise looms’ tone seen in previous statements will go and be replaced by a more circumspect commentary.
Friday sees the January jobs report – it will be skewed by the government shutdown and the 800,000 federal workers went home without pay.
