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


Traders in New York City work at the New York Stock Exchange (NYSE), on October 14, 2021.

Brendan McDermid | Reuters

Markets could be frightened by uncertainty about the new coronavirus strain, as well as Friday’s Employment Report and the other data for the week ahead.

After Friday’s Thanksgiving session, stocks and other risk assets suffered from reports that there were some financial problems. new variant in South Africa,Investors sought security in Treasurys. The variant is more easily transmissible than Delta, according to preliminary reports. Scientists continue testing vaccines against the virus.

It DowIt was 2.5% lower Friday, down 905 points (or 2.5%) since October 2020. The S&P 500The stock market plunged 2.3% to 4,594 on Friday, making it 2.2% lower for the week.

Peter Boockvar is the chief investment officer of Bleakley Advisory Group. “I believe that’s going override all else we see,” he said. “It is a very data intensive week with ISMs and payrolls. However, I believe that this new variant of the ISMs will stop behavior until more clarity becomes available.”

Economists are expecting a strong Friday payroll report, which will show 500,000 job additions after October’s 531,000 payrolls. The economy should have recovered from the Covid delta slowdown, so growth for the current quarter may be stronger than that of the previous quarter.

Wednesday will see the release of the Institute of Supply Management’s manufacturing survey. This should reveal improvement.

Scott Redler, a partner, stated that traders were often caught in conflicts in Friday’s short session. The market is usually positive during this time, but there are certain key levels to ensure a Santa rally in the weeks ahead.

The market is losing some momentum right now but the problem is not solved. It could be just fine and refuel if the 50-day moving average on the S&P 500 holds next week. He said that it was all fluid.

His current level is at 4,571. The 50-day momentum indicator is widely watched and is basically the average closing of 50 sessions.

He said that the market was already losing momentum and had seen a bearish turn this Monday.

Redler explained that the weakness in the market on Wednesday gave traders false security, which was normal for Friday’s holiday-shortened session.

Chief investment strategist for CFRA Sam Stovall said that the S&P 500The October low is usually followed by a year-end close. But this year the gain was more than 9%.

Stovall on CNBC stated that “We’re ahead and due for some kind of digestion.”

It DowOn Friday, trading saw a drop of more than 1,000 point. The riskier assets suffered even further, due to the Russell 2000Get a Discount of 3.7% on Friday West Texas Intermediate oil futuresPlunged over 12% bitcoinIt was 7.5% lower. 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.

It 10-year TreasuryYield, which represents price’s movement, declined below 1.50%, compared to Wednesday’s record of 1.69%.

The Fed Chairman Jerome Powell will provide guidance to investors. He is scheduled to appear before Congress along with Treasury Secretary Janet Yellen in order for them discuss the coronavirus as well as the CARES Act stimuli package. A hearing will be held before the Senate Banking Committee on Tuesday.

Barry Knapp of Ironsides Macroeconomics stated, “I think it is necessary to assume that the primary case remains the virus is endemic and not to become a pandemic.” It is possible that this variant will spread and slow down activity. This could impact supply chains and increase inflation, while also slowing growth.

Knapp warned that there were risks to stocks and advised investors to take care when purchasing the market in decline.

Knapp suggested that Fed may accelerate its taper of bond purchases. This will increase timeframe for interest rate rises.

He said that the problem when trying to purchase the stock market and tech stocks specifically is that if it’s down by a few percent it will rally into the end and then sell off. He suggests that investors look for cheaper options such as energy or financials. These are two of the most underperforming sectors on Friday.

OPEC+’s Thursday meeting will place oil and energy in the limelight. To lower oil prices, the U.S. and other nations agreed to allow crude oil to be released from their strategically important petroleum reserves. The U.S. intends to release 50 million barrels.

Despite White House requests to slow down the process, OPEC+ stated that it will increase its production by 400,000 barrels each month.

RBC’s global commodities strategist, Helima Croft said that OPEC may decide to halt its production increases due to the SPR release. She said that she believes that OPEC will pause production at its meeting on Thursday. But, they may also pull back barrels due to concerns over the new SPR variant.

According to her, the U.S. has been releasing record amounts of oil. As we are concerned about Covid lockdown restrictions, there will be a lot more barrels on the market. Although it is premature to know if governments will use such measures in the future, the market will remain concerned.

Week ahead calendar


10:00 a.m. Pending home sales

John Williams, President of the New York Fed at 3:00 PM 

3.05 PM: Jerome Powell, Fed Chairman, makes the opening remarks to New York Fed’s New York Innovation Center

5:05 p.m. Fed Governor Michelle Bowman


Earnings:, Box, Hewlett Packard Enterprise, NetApp, Zscaler, Ambarella

 9:00 a.m. FHFA home prices

9:00 a.m. Case-Shiller home prices

Chicago PMI 9:45 am

10:00 a.m. Fed Chairman Jerome Powell, and Treasury Secretary Janet Yellen will speak to Senate Banking on Coronavirus (and the CARES Act).

10:00 AM Consumer confidence

12:00 p.m. Fed Vice Chair Richard Clarida, and Cleveland Fed President Loretta Messter


Earnings:Royal Bank of Canada PVH, Okta,  Five Below, CrowdStrike, Splunk, SnowflakeSynopsys

Sales of vehicles

Mortgage Applications at 7:00 AM

8.15 AM ADP Private Payrolls

10:00 a.m. Powell & Yellen, House Financial Services committee

10:00 am Construction spending

10:00 AM ISM Manufacturing

11:00 a.m. Williams New York Fed

2:00 p.m. Beige book


Earnings: Ulta Beauty,Signet Jewelers Dollar General, Express, Kroger, Toronto Dominion, Imperial Canadian Bank, DocuSign, Assana, Marvell Technology, Ollie’s Bargain Outlet. Zumiez, Smith, and Wesson

8.30 a.m. Jobless claims

8:30 AM Atlanta Fed President Raphael Bostic

Atlanta Fed’s Bostic at 11:30 AM

Randal Quarles (Fed Vice Chairman)


8:15 a.m.

10:00 am. ISM Services

10:00 a.m. Orders in factories