US stocks were mixed Friday and closed moderately higher on the week ahead of key negotiations this week aimed at preventing another government shutdown and averting a planned increase in tariffs. The Dow finished down 0.3 percent on the day and up 0.2 percent on the week, the S&P rose 0.1 percent on the day and was flat on the week and the Nasdaq advanced 0.1 percent on the day and 0.5 percent on the week.
Reports suggest that negotiations between the Administration and Congress have stalled over the weekend ahead of this Friday’s deadline for extending government funding. Border security issues remain the primary obstacle to agreement. President Trump’s interim chief of staff, Mick Mulvaney, told reporters that he could not rule out the possibility for another government shutdown and that it remains possible that the President could declare a national emergency to authorise funding for border security measures.
Canadian labour market data showed very strong jobs growth in January, with employment increasing by 66,800 after a revised increase of 7,800 in December. These gains were concentrated in the service sector, offset by declines in manufacturing, agricultural and construction payrolls. Despite the increase in employment, the unemployment rate rose from 5.6 percent to 5.8 percent in response to a similar increase in the participation rate to 65.6 percent. Wage growth also accelerated from 1.5 percent on the year in December to 1.8 percent in January. Although the Bank of Canada appears to be in no hurry to tighten policy, these data suggest that such a move remains a possibility later in the year if a tight labour market produces sustained upward pressure on inflation.
These data reflect observations at the close of trading Friday. Gold gained US$4.30 to US$1,318.50 and dated Brent spot crude was up US$0.47 to US$62.10. Currency moves were muted Friday, with the US dollar up moderately against the euro and the Australian dollar, flat against the pound and yuan, and down moderately against the yen, the Swiss franc, and the Canadian dollar. The yield on the US Treasury 30 year bond fell a basis point to 2.98 percent while the 10 year note fell 2 basis points to 2.63 percent.