Today risk appetite returns in full force, as investors received encouragement from medical experts regarding the Omicron strain of Covid-19. It appears that the new variant causes milder symptoms than its predecessors. Being more highly transmissible, many are beginning to theorize that Omicron will displace Delta and thus eradicate the more dangerous strains.
If Omicron becomes the dominant form of coronavirus and if it is not as lethal as other variants have been, we may actually begin to see the end of the pandemic. Scientists have long suspected that we might not be able to kill off Covid-19 completely, but merely turn it into a less dangerous, endemic virus like the flu. Omicron appears to be a step in that direction.
In addition, there are several antiviral drugs currently undergoing clinical trials, and they all seem to be effective even against the new strains of Covid-19. Unlike the vaccines, which as a first line of defense aim to prevent an infection, these antivirals will be used to actually treat people who got infected already.
Things were also looking up in China, where the central bank is loosening its monetary policy in order to help deal with the economic slowdown exacerbated by the pandemic, and the struggles of the property development sector in particular. China also pleased investors with its trade reports for November.
As is usually the case when risk appetite is on the rise, today will be good for stocks. All major US stock indices are set to open higher today.
Crude oil prices are also going up due to hopes that Omicron won’t cause a big dip in the demand for fuel. Prices are back above $70 per barrel and we might see them reach $80 before the year’s end.
In other news, United States President Joe Biden is going to hold a phone call with Russia’s President Vladimir Putin later today. The two leaders will discuss Ukraine, as Russia has sent thousands of troops to the border in what many suspect might be preparations for another invasion.
Biden has already spoken with his allies in the European Union about imposing sanctions on Russia in case it invades Ukraine. The phone call today will probably constitute an attempt to convince Putin to stand down before the sanctions are imposed.
