Market Musings 12/2/2021
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
Market rollercoaster since Omicron news broke Black Friday. We’re closely monitoring severity of symptoms, transmissibility and potential vaccine immunity for signal on #COVIDRecovery.
It was a different Black Friday than we were expecting. New #COVID19 variant Omicron was spreading in South Africa with cases already found in other parts of the world. Little known other than Omicron sports about 50 mutations from the Alpha variant. While mutations aren’t necessarily bad, significant uncertainty on a low-volume pseudo holiday sent markets into a panic with S&P 500 down -2%.
Returning from the extended Thanksgiving holiday weekend, market volatility has remained high.
- Monday rose +1% on reports new variant showing mild symptoms
- Tuesday fell -1% on Moderna CEO expecting “material drop” in vaccine effectiveness
- Wednesday tumbled over -1% on first US case in San Francisco
- Thursday surged over +1% on alleviating concerns as few US cases so far exhibiting mild symptoms
The uncertainty is causing considerable market whiplash. With so much unknown, investors look for signal from the smallest bits of news to recalibrate impact to #COVIDRecovery trajectory. Some key factors we’re monitoring include severity of symptoms (mild so far… 🤞), transmissibility and potential vaccine immunity.
Obviously, the doomsday case is highly transmissible and severe symptoms with vaccine immunity. This would potentially reverses the pandemic timeline back to the start with high hospitalizations, lockdowns, travel restrictions, etc. The small chance of this scenario sent markets into panic on Black Friday. Given mild symptoms from initial cases, we’re optimistic this scenario is unlikely.
On a more optimistic note, mild symptoms and still highly-effective vaccines would be a boost for the market with little impact on current #COVIDRecovery momentum. However, investors are also viewing a potential upside scenario. High transmissibility, mild symptoms and effective vaccines potentially speeds up global #COVIDRecovery accelerating #SupplyScare and moderating #InflationFears.
There’s still a lot unknown, but we do expect high volatility to continue as we learn more about Omicron.
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The statements, opinions and analyses presented here are provided as general information. This article is the opinion of the author. Anything within this article should NOT be considered an investment recommendation or advice. See Ursa’s full disclosures here.
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