All eyes will be on Wall Street after a blow for the markets

Bang. Just when the west was daring to hope it had managed to get on top of Covid-19, a new variant, omicron, has appeared. And for the world of finance, it has been a devastating blow. On Friday the Dow Jones share index fell by 905 points, its worst decline for more than a year. Other equity markets around the world were savaged too. The FTSE100 index fell by 266 points, down 3.6 per cent. It was indeed a Black Friday for the markets, as well as, in a totally different sense, it was for retailers.

And now? Short-term, what matters is what Wall Street does this week. Everyone will be watching the New York opening on Monday, because US shares account for more than half of global equity valuation. The rest of the world will take the lead from that. The tail does not swing the dog.

Longer-term, there will be a tug of war. On the one hand the central banks – and again it is the US federal reserve that matters most – will keep the money flowing. On the other, the disruption will continue to hit economic activity in unpredictable ways. Up to now, the main blows have been to the travel and hospitality industries. They will continue to be vulnerable. But there may be other second-order damage that is not yet apparent.