Panic gripped the financial markets (and the world in general) last week around this time when news about a new dangerous variant of Covid-19 was identified in South Africa. We have learned some things since then, but the situation with the strain now dubbed Omicron remains alarming.
Even last week, when the data was still preliminary, scientists warned that due to its high number of mutations within the spike protein, Omicron appears to have a higher transmissibility rate than all other known variants, including Delta, the most dangerous one so far.
Data from South Africa gathered over the past week proves it. Between September and November, coronavirus infections in South Africa were considerably lower, calming down after the summer Delta outbreak. Up until November 23, the country had fewer than 1,000 new infections per day.
From November 24, when the existence of Omicron became known, the infection rate in South Africa has skyrocketed. Two days ago the country had 8,500 new Covid-19 infections. Yesterday that number was 11,535, the highest in three months. Based on how steep the graph of daily infections is, the numbers are likely going to climb far above that in the coming weeks.
In just a week, Omicron has reached more than 30 countries around the world, as far as Australia, South Korea, and the United States.
Of significant concern is the fact that the new strain of Covid-19 arrived very quickly in Europe, where a new wave of outbreaks was already underway. Countries like Germany, France, Belgium and the Netherlands are currently struggling with massive outbreaks, which can only get worse by the introduction of the new, highly contagious variant.
At the beginning of this week things still looked quite bad, because the CEO of Moderna stated that the company’s vaccine likely offers very limited protection against the highly mutated virus, a sentiment echoed by other vaccine-making companies. It won’t be until 2022 when we finally have updated versions of the Covid-19 vaccines.
Nevertheless, the United Kingdom just published data that indicated an extra jab of any approved coronavirus vaccine would significantly boost immunity, increasing the body’s overall ability to resist or fight the virus.
What is also encouraging, though not officially confirmed yet, is that patients with the Omicron variant appear to have less severe symptoms. In South Africa, daily deaths have not increased at all since the discovery of the virus and the situation in hospitals remains as calm as it can be during a pandemic.
Thus, in a bizarre way, the rapid spread of Omicron might be a good thing. If it becomes the dominant strain of Covid-19 and if it is less deadly than Delta, that means the world will have an easier time with it and fewer lives will be lost while we wait for more efficient pharmaceutical solutions to both prevent and treat the coronavirus.
In this way, we are seeing the markets begin to calm down and the panic over the new variant subsides. The massive risk aversion we observed a week ago is no longer the dominant mood among investors, and neither are safe haven assets that popular.
