The situation on the financial markets is likely to remain turbulent: Not only the expectations for the first increase in the US Federal Reserve interest rate in March and speculation about the further course of its monetary policy are a driving force for investors.
Concerns that the highly contagious omicron variant of the coronavirus will weaken the economy more than expected, as well as the escalation of the crisis between Russia and the West in Ukraine, also cause fluctuations in stock prices.
As a result, strategists expect the leading stock indices to mark new weak weeks.”The reversal in interest rate policy fuels investors’ concerns, especially in combination with geopolitical risks and the coronavirus, and stock market volatility is likely to remain high,” said Sven Streibel, an analyst at DZ Bank, quoted by Handelsblatt.
last week and marked its third consecutive weekly loss. This is the longest series of losses of more than four months. Last week, volatility increased by almost two-thirds from the beginning of the year and now stands at 34%.European indices also fell.
The surprisingly sharp drop of 0.7% in German gross domestic product in the fourth quarter spoiled investor sentiment at the end of the week. They fear that the German economy could continue to suffer from coronavirus and material difficulties.
However, economists believe that the economy is likely to recover to some extent in the first quarter. In the United States, the wide S&P 500 barometer and the Nasdaq technology index also saw strong ups and downs. However, thanks to the positive Friday, both indices recorded a slight weekly increase. Concerns about interest rates were mixed with hopes of very good business results in the fourth quarter of 2021, for example from Apple and Visa.