The new week in the financial markets begins with talk of the new coronavirus variant, which was first identified at the end of last week.
Now dubbed Omicron, the new variant has spread from South Africa to reach Israel, Hong Kong, the United Kingdom, at least seven European Union member states, and even Canada and Australia.
The World Health Organization concluded on Friday that the new variant poses a high risk for the further development of the pandemic. Nevertheless, data on its lethality is still not available. It is suspected that despite the high number of mutations in Omicron and it being more highly transmissible than other variants, it is not deadlier.
But due to how different Omicron is from other known Covid-19 strains, the current coronavirus vaccines might not be as effective as desirable. The European Medicines Agency approved booster shots in light of the new variant. They’re also approved in the US and the UK.
Moderna and Pfizer-BioNTech are reportedly working on new versions of their coronavirus vaccines to address the newer, more mutated strains of the coronavirus. Nevertheless, the upgraded vaccines will likely not reach us for a few months.
Thus, the markets will likely remain preoccupied with Omicron for a bit, as it poses the highest risk to the global economy via the prospect of more travel bans and lockdowns around the world.
The EU, the United Kingdom, and the United States have already closed their borders to passengers from South Africa. Japan, on the other hand, banned travel from all foreign countries, considering that the virus has spread and could come from anywhere, not just South Africa.
Still, today the US stock markets are likely to perform a bit better, recovering some of the losses incurred during the Thanksgiving weekend, as the novelty of Omicron wears off. Still, airlines, cruise companies, hotels, and the like will most probably continue to drop in share value.
One company that shines in all of this is the Russian Gazprom, which recorded astonishing profits this year. Western Europe is currently experiencing a wave of colder-than-usual weather but Russia has not increased the supply of natural gas to the region, which means many countries are digging deep into their reserves and gas prices continue to soar.
