Covid developments to rule the market once again in the week ahead after Friday's rout

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Uncertainty about a new emerging coronavirus strain could continue to spook markets in the week ahead, threatening the potential for a Santa rally.

was down nearly 8%. Some investors began to reverse bets in the futures market that a strong economic rebound and inflationary pressures would pull the Fed off the sidelines sooner-than-expected.Loading chart...

"I think you have to assume the base case is the virus remains endemic, not back to being a pandemic," said Barry Knapp, founder of Ironsides Macroeconomics. The worry is that the variant spreads and slows activity, hitting supply chains even more. That could boost inflation while slowing growth. Knapp said the Fed could end up accelerating the taper of its bond purchases, which would move forward the time frame for potential interest rate hikes.

Oil and energy will be in the spotlight in the coming week, as OPEC+ meets Thursday. The U.S. and other governments agreed to release oil from their strategic petroleum reserves in an attempt to drive prices lower. The U.S. plans toOPEC+ has said it would continue to increase production by 400,000 barrels monthly, despite calls from the White House to speed up the release.

 

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I think the Covid developments will not put our country's market and economy in dangerous zone next week, we want the market and economy to recover strongly next week, after today and this week.

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