US politicians place a lot of bets on Wall Street.
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Global stocks fell Friday as investor concern over the pickup in central-bank action to tackle surging inflation, at a time when the Omicron coronaviruses variant threatens to derail the battle against COVID-19, weighed on the market.
The All-World index was last down by 2%, heading for its fifth weekly loss. The S&P 500 lost 0.4% in US stock futures. The futures of the two major stock exchanges fell, with the Dow Jones falling and the Nasdaq 100 dropping.
This week, central bankers around the world have either raised interest rates or cut back on economic stimulation as rising consumer prices put pressure on growth.
At its December meeting, the Federal Reserve made a more aggressive tone. It said it might need to raise US interest rates three times next year, and that it would end its asset-purchase program by March.
The Bank of England raised interest rates on Thursday. The UK government introduced measures to tackle the spread of Omicron as a backdrop of political instability.
The European Central Bank said Thursday it will cut its bond purchases in three months as it struggles to contain inflation in the eurozone.
While trading volumes are set to abate as we head into the Christmas break, we think global central banks have provided investors with an important toolkit to position for what lies ahead in 2022," ING's Francesco Pesole said.
He said that the central bank messages this week are related to inflation.
The major European indices were all in the red, with the pan-continental Stoxx 600 down around 0.6%.
The London's FTSE 100 was up. Despite the Conservative Party's loss of a key local election, it was one of the strongest performers in the region.
The pound rose to its highest against the dollar since the start of December, having plumbed one-year lows a week ago, as the BoE led the central-bank hawks. The pound was down at $1.3285.
On Friday, gold traded around its highest point in a month, topping $1,800 an ounce. Even though gold's appeal has waned due to rising interest rates and a stronger dollar, it's still likely to attract money next year.
Rhona O'Connell, StoneX head of market analysis for Europe, the Middle East and Asia, said in a note that gold should get back on track next year.
It's possible that investment will go down a bit once the rate hikes start, but on balance it looks as if weak-handed holders are out of the market, and any unknown unknowns are likely to be.
The yellow metal was up 0.6% on the day at $1,808 an ounce, heading for a weekly gain of 1.3%.
Oil was heading for its first weekly loss since the end of November due to concern about the demand impact from Omicron. The price of oil was down 0.7%, at $73.77 and $71.14 a barrel.
Business Insider has an original article.
