Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Top 5 Things to Watch in Markets in the Week Ahead

EconomyNov 28, 2021 12:44
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters

By Noreen Burke

Investing.com -- COVID-19 is back on top of the agenda for investors amid fears that the new Omicron variant could stall the global economic recovery from the nearly two-year pandemic. The new strain may also raise doubts over how quickly the Federal Reserve can move to unwind stimulus to tackle spiraling inflation. Against this background, Friday’s U.S. jobs report and testimony on Tuesday by Fed Chair Jerome Powell and Treasury Secretary Janet Yellen will be closely watched. Oil prices will be in focus ahead of Thursday’s OPEC+ meeting. Meanwhile, Tuesday’s euro zone inflation data will be in the spotlight ahead of December’s keenly anticipated European Central Bank meeting. Here’s what you need to know to start your week.

  1. New pandemic wave?

Wall Street’s three main indices tumbled on Friday as they re-opened after Thursday’s Thanksgiving holiday with energy, financial and travel-related stocks bearing the brunt of the selloff, sparked by the discovery of the new coronavirus strain.

While little is yet known of the new variant first detected in South Africa, scientists said it has a high number of mutations that may make it vaccine resistant and more easily transmissible than the Delta variant.

"Markets were celebrating the end of the pandemic. Slam. It isn't over," David Kotok, chairman and chief investment officer at Cumberland Advisors told Reuters. "All policy issues, meaning monetary policy, business trajectories, GDP growth estimates, leisure and hospitality recovery, the list goes on, are on hold."

Before Friday, investors had been upbeat about the strength of the economic recovery amid broad vaccine availability and advances in treatments, despite fears over steadily rising inflation.

  1. Jobs report

A robust November jobs report could underline the case for the Fed to speed up unwinding its $120 billion-a-month stimulus program at its next meeting in mid-December. But a fresh wave of the pandemic could throw those plans into doubt.

Concerns over spiraling inflation, coupled with signs of an accelerating economic recovery had prompted investors to begin pricing in a faster taper and earlier interest rate hikes.

Friday’s non-farm payrolls report for November is expected to show that the economy added 550,000 jobs, bringing the unemployment rate down slightly to 4.5%.

The economic calendar for the week ahead also features the Institute for Supply Management’s indexes of manufacturing and services, along with data on pending home sales, consumer confidence and the Fed’s Beige Book.

  1. Powell and Yellen testimony

Fed Chairman Jerome Powell, fresh from his nomination for a second term by President Joe Biden, is due to testify on the CARES Act, the central bank’s pandemic-era stimulus program, before the Senate Banking Committee in Washington on Tuesday. Treasury Secretary Janet Yellen is also due to testify. A similar hearing will be held before the House Financial Committee on Wednesday.

Investors will be looking for fresh insights on the outlook for the economic recovery amid renewed pandemic uncertainty.

  1. Oil demand outlook

Oil prices plunged $10 a barrel on Friday, their largest one-day decline since April 2020, as news of the new Omicron variant saw countries rush to restrict travel, adding to concerns that a supply glut could swell in the first quarter.

The Organization of the Petroleum Exporting Countries and its allies (OPEC+) is due to meet on Thursday, after last week’s decision by the U.S. and other governments to release oil from strategic reserves in a bid to lower gasoline prices.

For its part, OPEC+ has stuck to monthly output increases of 400,000 barrels per day (bpd) since August, despite calls to increase output to drive down oil prices.

"OPEC's initial assessment of the coordinated (stockpile) release and the sudden appearance of a new variant of the coronavirus raises serious concerns about economic growth and the oil balance in coming months," PVM analyst Tamas Varga told Reuters.

  1. Euro zone inflation

The euro zone is to release flash inflation data for November on Tuesday. Consumer price inflation hit a 13-year high of 4.1% in October, and it is expected to stay well above the ECB’s 2% target into next year. Germany, Spain, and France are to release CPI figures on Monday and Tuesday.

With inflation surging the ECB is facing growing calls to tighten monetary policy, but with Europe battling a fresh surge of the virus and news of the new strain policy doves have fresh ammunition to push back against those calling for an early end to stimulus.

The ECB is expected to raise its 2022 inflation forecast at its upcoming December meeting. Investors also expect the ECB to announce that its pandemic-era asset purchase program will wind up in March, while stepping up its longer standing bond purchase program to offset the cut to stimulus.

--Reuters contributed to this report

Top 5 Things to Watch in Markets in the Week Ahead
 

Related Articles

Top 5 Things to Watch in Markets in The Week Ahead
Top 5 Things to Watch in Markets in The Week Ahead By Investing.com - Jan 23, 2022 3

By Noreen Burke Investing.com -- It’s set to be a major week for markets, between the Federal Reserve meeting and an avalanche of big-name earnings. Fed Chair Jerome Powell is...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
ace patel
ace patel Nov 28, 2021 23:51
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Will they price in the panic and fear it's causing before the holiday season
Elizabeth Gueniat
Elizabeth Gueniat Nov 28, 2021 17:08
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Interesting. Just when many of us felt we were beginning to see a light at the end of the tunnel. Along comes a new variant to slam the breaks on "freedom".
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email