The VIX index (volatility index) rose to well above 30 points on Wednesday, reflecting the tensions in the financial markets. Investors have clearly decided to take some money off the table with all the increased uncertainties. Not only is the revival of the coronavirus causing unrest, but tapering also remains a topic of conversation.
Fed Chair Jerome Powell again announced last week that there is talk of an accelerated phasing out of the asset purchase program. Powell also said he no longer considers inflation a 'transitory'. Sky-high inflation remains a difficult issue for central banks and investors, and the only way to slow it down is by raising interest rates.
The November jobs report was a minor setback last Friday. Only 210,000 jobs were added to the US economy, but the unemployment rate fell sharply to 4.2%. Also positive was the fact that the participation rate has risen to 61.8%, the highest level since March 2020. The question now is to what extent a new coronavirus revival will reduce economic growth.
The Chinese and American inflation figures are on the agenda for next week.
Advisory service that offers real-time and end of the day trading ideas.