Markets are due for a wild ride this week as events will hinge on Europe's navigation through its debt crisis as well as reaction to U.S. President Barack Obama's jobs plan, which will be unveiled this week, says Mohamed El-Erian, CEO of Pimco, the world's largest bond fund.
"Once again, already fragile U.S. markets will be influenced by developments on the other side of the Atlantic — and in a week in which there is great anticipation for President Obama's 'mission critical' speech on the American economy," El-Erian writes in a CNBC guest blog.
"Europe's deepening debt and growth crisis amplifies the importance of President Obama's effort to deal with America's deepening unemployment and growth crisis; and does so by raising both the stakes and the challenges for the President."
(Associated Press photo)
Fears the debt issues in European countries like Greece and Italy may spread and pummel financial systems across the continent and even in the U.S. have sent shockwaves across the world.
Plus economic indicators in the U.S., especially doggedly high unemployment rates, are fueling fears that the world is headed back into recession.
Relax, says World Bank President Robert Zoellick.
Economies are going through rough times but they will continue to grow.
"I don't believe that the United States or the world will go into a double-dip but there's high degrees of uncertainty," Zoellick says, Reuters reports.
Still, market watchers should buckle up for a roller-coaster week,
"Tighten those seat belts. It will be a bumpy and volatile week as markets are held hostage to policy developments in both America and Europe," El-Erian concludes.
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