How Omicron Affects Financial Markets | Business | Economic and financial news from a German point of view | DW

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The emergence of omicron has held global markets on their toes, struggling to address the scarcity of often conflicting information about the new variant of COVID-19.

But analysts at US investment bank JP Morgan say it won’t be a bad idea for investors to take advantage of last Friday’s sharp drop in stock prices, one of the biggest sellers of the year. and “to buy the drop”.

They argue that the “more transmissible” but “less lethal” variant of omicron could end up hastening the end of the pandemic.

“While it is likely that omicron is more transmissible, early reports suggest it may also be less lethal – which would match the virus’ pattern of evolution seen historically,” JP Morgan Marko strategists wrote. Kolanovic and Bram Kaplan in a note to customers on Wednesday. .

“If a less severe, more transmissible virus quickly crowds out more severe variants, could the Omicron variant be a catalyst for turning a deadly pandemic into something more similar to the seasonal flu,” they asked, adding that, then, the omicron variant could ultimately prove to be positive for the markets, in the sense that “it could accelerate the end of the pandemic”.

Kolanovic, who is the chief global markets strategist at the US investment bank, and Kaplan say such a development would be in line with historical patterns from previous respiratory virus pandemics, given the wide availability of vaccines and new treatments. which should work on all known variants.

Markets in a “waiting game”

Global markets have fluctuated over the past four days as investors struggle to judge the economic implications of the new variant, which was first reported in Africa last week.

The emergence of Omicron led to a major crash in the global stock and oil markets on Friday. Markets regained some of the ground lost on Monday only to fall back on Tuesday after the chief executive of vaccine maker Moderna warned that the omicron variant could dodge existing COVID vaccines.

Markets were further frightened by governments quickly imposing travel restrictions to keep the new variant at bay.

“We are still waiting for concrete statistics, but there was positive news very early on from the chief scientist of the World Health Organization, who said he believed that vaccines” will always protect against serious diseases as they do. did so against the other variants, “said Jim Reid, Deutsche Bank strategist.

“On the other hand, there was more negative news from South Africa, as the country reported 8,561 infections the day before, with a positivity rate of 16.5% … Thus, all eyes will be on the continuation of this trend, and also on what it means for hospitalization and death rates in the days to come. ”

Edited by: Hardy Graupner


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