Virus is once again on top of the agenda following a massive sell-off on stock exchanges on Friday. Investors fear that new, more dangerous variants will encourage governments to reimpose lockdowns. Big drop in oil prices at the end of the week will also make the upcoming OPEC+ meeting even more interesting. Be sure to watch US100, OIL and GOLD next week.
Virus fears returned to markets at the end of the week with discovery of a new, highly transmissible coronavirus variant in South Africa. Equities took a hit but as one can recall, declines during previous virus waves were short-lived and traders rushed to buy the dip. Will it be the same this time? We shall see. Nasdaq-100 tended to outperform other Wall Street indices throughout the pandemic and tech stock will definitely be on investors' watch in the coming days.
SPR release announcement failed to bring oil prices down. However, risk of demand destruction as a result of new, potential lockdowns sent crude prices into freefall and pushed Brent and WTI to 2-month lows. OPEC+ hinted that it may adjust its output policy after reserve releases were announced and now such a move looks even more likely. Representatives from OPEC+ countries will meet to decide on oil output this Thursday.
Gold jumped on Friday as virus fears triggered flight to safety. Precious metals also benefited as resurgence of pandemic may delay Fed's policy tightening plans. The NFP report for November (Friday, 1:30 pm GMT) will show whether the US economy continued to perform well in the previous month. However, gold traders will also tune in for Powell speeches in Congress on Tuesday and Wednesday. Powell will try to persuade lawmakers to back the second-term nomination he has received from President Biden.
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