Traders work on the trading floor of the New York Stock Exchange (NYSE) in New York City, USA on October 14, 2021.
Bren Dank Demead | Reuters
The uncertainty of the emerging strain of the coronavirus may continue to disturb the market, just as Friday’s employment report and other data in the coming week show that the economy has been getting stronger.
At the meeting after Thanksgiving on Friday, stocks and other risky assets were hit hard because of reports A new variant of South Africa, Investors seek the safety of national debt. Initial reports on this variant indicate that it may be more contagious than the Delta variant, and scientists are studying the effectiveness of a vaccine against it.
Peter Boockvar, Chief Investment Officer of Bleakley Consulting Group, said: “I think this will surpass other situations we are going to see.” “This is an important data week for ISM, and of course there are employment data, but I think This new variant will freeze behavior until the situation becomes clearer.”
Economists expect a strong employment report to be released on Friday, adding 500,000 jobs after October’s 531,000 jobs. They expect the economy to have gotten rid of the effects of the slowdown associated with the Covid delta variable, and the growth in this quarter may be much stronger than in the third quarter.
The Institute for Supply Management Manufacturing Survey was released on Wednesday, which should show improvement.
T3Live.com partner Scott Redler said that many traders were caught during the shortened trading hours on Friday, which is usually positive for the market, and the market must maintain a key level in the coming week. Held the year-end Santa Unity.
“Currently, the market has lost some momentum, but it hasn’t been broken. If the 50-day moving average of the S&P 500 index stays the same next week, it might be good and come on. It’s all very liquid,” he said.
The level he is watching is 4,571. 50 days is a widely watched momentum indicator, basically the average closing price of the past 50 trading days.
He said that the market had lost momentum last Monday and had a bearish reversal.
“On Wednesday, the market absorbed the weakness and gave traders a false sense of security. This is usually a shortened trading day with a nice relaxing holiday on Friday,” Redler said.
CFRA Chief Investment Strategist Sam Stovall said Standard & Poor’s 500 Index It usually rises by 7% between the October low and the year-end close, but this year it has risen by more than 9%.
“We are ahead of the game and should have some kind of digestion,” Stovall said on CNBC.
this Dow It fell more than 1,000 points in Friday’s trading. High-risk assets have fallen even more, Russell 2000 The price was cut by 3.7% on Friday. West Texas Intermediate Crude Oil Futures Plummeted by more than 12%, and Bitcoin It fell by 7.5%. Some investors began to reverse the futures market’s bet that a strong economic rebound and inflationary pressures will cause the Fed to withdraw from the wait-and-see earlier than expected.
this 10-year treasury Yields are contrary to price movements, falling from Wednesday’s high of 1.69% to below 1.50%.
Investors will seek guidance from Federal Reserve Chairman Jerome Powell, who will attend Congress next week with Treasury Secretary Janet Yellen to discuss the coronavirus and CARES bill stimulus package. On Tuesday, the Senate Banking Committee will hold a hearing.
Barry Knapp, founder of Ironsides Macroeconomics, said: “I think you have to assume that the basic situation is that the virus is still an endemic epidemic, not a pandemic again.” What is worrying is that this change Experience spreading and slowing down activities, further hitting the supply chain and pushing up inflation while slowing growth.
Knapp said that stocks are at risk and investors need to be cautious in buying the market when they fall.
Knapp said that the Fed may eventually accelerate the reduction of bond purchases, which will advance the time frame for possible interest rate hikes.
“The problem with trying to buy the entire market, especially technology stocks, is that if you buy now, because it has fallen by a few percentage points, it will rebound at the end of the year and then the market will sell off,” he said. For this reason, he tends to enter cheaper industries such as energy and finance, which performed the worst on Friday.
Oil and energy will be the focus in the coming week, as OPEC+ will hold a meeting on Thursday. The United States and other governments agreed to release oil from their strategic oil reserves to keep prices down.American plan Release 50 million barrels.
Despite the White House’s call to speed up production, OPEC+ still stated that it will continue to increase production by 400,000 barrels per month.
Helima Croft, head of global commodity strategy at RBC, said that due to the release of SPR, OPEC may decide to suspend its own production increase. She said: “I think when we enter the OPEC meeting on Thursday, the question is not only whether they will be suspended, but also whether they will actually withdraw some barrels due to concerns about this new variant and the very large SPR release. .”
She said that the United States is releasing a record amount of oil. “We will have a lot of oil entering this market because we have these concerns about the new Covid lockdown restrictions,” she said. “Again, it is too early to say whether the government will take such measures, but the market will be worried.”
One week in advance calendar
Homes for sale at 10:00 am
3:00 p.m. New York Fed President John Williams
3:05 PM Fed Chairman Jerome Powell delivered an opening speech at the New York Fed meeting, introducing the New York Innovation Center
5:05 p.m. Fed Governor Michelle Bowman
9:00 AM FHFA Rate
9:00 am Case-Shiller Room Rate
9:45 am Chicago Purchasing Managers Index
10:00 AM Fed Chairman Jerome Powell and Secretary of the Treasury Janet Yellen speak before the Senate responds to the Coronavirus and CARES Act
10:00 AM Consumer Confidence
1:00 pm Fed Vice Chairman Richard Clarida and Cleveland Federal Reserve Chairman Loretta Meister
7:00 AM Mortgage loan application
8:15 am ADP Private Payroll
10:00 a.m. Powell and Yellen at the House Financial Services Committee
10:00 am Construction expenditure
10:00 am ISM manufacturing
10:30 am Williams of the New York Fed
2:00 p.m. Beige Book
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8:30 am Unemployment benefit application
8:30 AM Atlanta Fed President Rafael Bostic
11:30 a.m. Bostic of the Atlanta Fed
1:00 PM Randal Quarles, Vice Chairman of the Federal Reserve
8:30 am Employment report
ISM service at 10:00 am
10:00 am factory order