Investor Concerns Weigh on Stocks into the Weekend – Nasdaq down 0.2%
US stocks closed out the week on a mixed note as ongoing concerns over the government shutdown continued to weigh on investor sentiment. The Dow managed to edge higher, closing up 0.16% at 46,987, while the S&P 500 added 0.13% to finish at 6,728. The tech-heavy Nasdaq lagged behind once again, slipping 0.21% to 23,004. In the bond market, US Treasury yields nudged higher into the close, with the 2-year up 0.6 basis points to 3.562% and the 10-year rising 1.3 basis points to 4.097%. The dollar gave back more of its recent gains, with the DXY easing 0.18% to 99.56 against the majors. Commodities saw a firmer tone, with Brent crude climbing 0.39% to $63.63 and WTI up 0.54% to $59.75 as traders took advantage of the recent dip. Gold extended its recent run, gaining another 0.6% to $4,001.26 as uncertainty around Washington continued to fuel safe-haven demand.
US Government Shutdown in Focus
The longest US government shutdown in history has placed further pressure on US markets that some commentators were already calling well overvalued. However, updates on Friday and over the weekend are pointing to a possible resolution in the coming days, which could see the resumption of key US economic data. The economic calendar was looking very bare at the start of the week; however, if US agencies are back in action in the next couple of days, we could see scheduled CPI, PPI, and Retail Sales numbers released later this week. Given the data vacuum of the last few weeks, if we do start to see numbers released in the coming days, then expect plenty of volatility around them. Even if we do see the government back at work in the next couple of days, there will be a backlog to get through, so investors are not counting on set data releases. However, the return to work will be seen as a positive for markets, and it will remain to be seen if the data backs up that optimism.
Quiet Calendar Day to Kick Off the Week
It looks like being a quiet start to the trading week today, with very little on the macroeconomic calendar to inspire fresh moves in the market. All eyes remain on the US for updates on whether the longest-running government shutdown in history is about to come to an end, with hopes increasing over the weekend leading to a positive start for Asian bourses today. All three trading sessions are lacking any tier-one data or central bank updates today; however, yen traders will be paying close attention to the Bank of Japan Summary of Opinions early in the Japanese day. The latter two sessions of the day will most probably see the main focus remain on the US and any progress with regard to the shutdown; however, as always, traders will not discount any further geopolitical updates from adding some volatility to proceedings.
