This week in the markets is likely to be a tumultuous one. With a flood of news hitting investors from all angles, some of the latest predictions suggest that odds are in favor of a further selloff.
It has been a roller coaster ride in recent weeks as investors parsed through multiple economic and political headlines. This week could further complicate the situation with key developments coming out of the Biden administration and the European Union.
First, the backing of the infrastructure package by President Biden is likely to create further volatility in the markets. The package could provide much needed economic stimulus, but the lack of bipartisanship suggests some division amongst investors and politicians.
Second, the European Union’s continued battle with Brexit could also have major impacts this week. Negotiations over trade and financial issues have been going on for months, with a resolution still unclear. The outcome could have major implications for markets both in Europe and the US.
Third, interest rates are likely to come into play this week. The Federal Reserve recently announced a decision to stay the course and keep rates steady, which puts pressure on investors to find ways to make money in a low-interest environment.
Finally, corporate earnings reports will continue to be released in the coming days, potentially influencing investor sentiment. Major companies such as Apple, Microsoft, and Amazon, have yet to announce their earnings, and those results could factor heavily into the week’s trading.
All of this points to further selling, perhaps in greater volume than what we have seen in recent weeks. Investing in this environment requires a long-term view, and investors should be aware of potential pitfalls. Keeping a close eye on news developments and exercising prudence in decision-making is a must.
No matter the outcome, it’s likely to be another harrowing week in the markets.