Global financial markets have been rocked by the emergence of a potentially highly infectious variant of the virus that causes Covid-19. Airline and travel stocks were hit particularly hard on worries that the pandemic may be far from over.
Infectious disease specialists are anxious about a new strain that’s been identified in South Africa called B.1.1.529.
What has experts wary is that this variant has a high number of mutations in its spike protein, which allows the SARS-CoV-2 virus to attach to and hijack healthy human cells.
Vaccine Efficacy
The Covid-19 vaccines now on the market are designed to neutralize that spike protein. The concern is that this new variant will be able to evade the vaccines or lessen their effectiveness.
Scientists at the World Health Organization and other public health bodies need to get a better read on the transmissibility and lethality of this new strain. There’s much we still don’t know and it will be several weeks before we do.
On November 26, the WHO characterized the variant, which it named Omicron, as a viral strain of concern.
Testing results in South Africa suggest that the new variant is expanding quickly in the province that includes Johannesburg. A traveler from that region also was identified as having the B.1.1.529 variant in Hong Kong.
Spreading Fast
United Kingdom health authorities said the R value, or effective reproduction number, of the B.1.1.529 variant in some parts of the South African province of Gauteng was at a level of 2. Anything over 1 allows for exponential spread of a virus.
Until we learn more, global markets are likely to remain edgy. The US and the United Kingdom have placed restrictions on travelers from South Africa after news of the new variant.
If we are moving back into a period of travel restrictions and lockdowns, that may be a drag on economic growth heading into 2022.
Global Vulnerabilities
The latest setback is also a reminder of the importance of better vaccine distribution globally. The developed world has the lion’s share of vaccine supplies.
If big chunks of the developing world remain unvaccinated, the Covid-19 virus has more opportunities to mutate into more troubling strains.
Unfortunately, the pandemic seems far from over as the year draws to a close.
—
Originally Posted on November 27, 2021 – Why A New Covid-19 Variant Has Jolted Global Markets
DISCLOSURE
This piece is provided as educational information only and is not intended to provide investment or other advice. This material is not to be construed as a recommendation or solicitation to buy or sell any security, financial product, instrument, or to participate in any particular trading strategy.
Disclosure: Interactive Advisors
This material is not intended as investment advice. Interactive Advisors or portfolio managers on its marketplace may hold long or short positions in the companies mentioned through stocks, options or other securities.
Pursuant to the Investment Management Agreement between Interactive Advisors and its clients, all brokerage transactions occur through Interactive Brokers LLC, an affiliate of Interactive Advisors. Interactive Advisors does not offer services through any other broker-dealer. The use of an affiliate for brokerage services represents a conflict of interest. Interactive Advisors clients acknowledge this conflict of interest and authorize Interactive Advisors to execute transactions through Interactive Brokers LLC when they open an Interactive Advisors account. Clients should consider the commissions and other expenses, execution, clearance, and settlement capabilities of Interactive Brokers LLC as a factor in their decision to invest in an Interactive Advisors Portfolio. Interactive Advisors believes it can meet its best execution obligation by trading its clients’ trades through Interactive Brokers LLC. While there can be no assurance that it will in fact achieve best execution, Interactive Advisors does periodically monitor the execution quality of transactions to ensure that clients receive the best overall trade execution pursuant to regulatory requirements.
Disclosure: Interactive Brokers
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Interactive Advisors and is being posted with its permission. The views expressed in this material are solely those of the author and/or Interactive Advisors and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
