That’s how many U.S. financial market participants surveyed by Deutsche Bank Monday predict the new omicron variant of the coronavirus will be largely forgotten by the end of the year.
In an eight-hour flash survey answered by 433 bankers, portfolio managers, economists, and other market participants in the U.S., a full one-third shrugged off the threat of omicron while 8% said they expected it to be the biggest topic in financial markets by year's end. The balance (59%) predicted omicron would still be an issue but “only of moderate importance.”
The survey results, which broke down very similarly when global participants were included, show just how uncertain people are about the economic impact of omicron, which was designated a “variant of concern” by the World Health Organization Friday, triggering widespread concern throughout the financial markets. Oil prices plunged 13%, the Dow Jones Industrial Average fell more than it had on any single day in over a year, and 10-year Treasury yields sank as fears that current vaccines may not be as effective against it spurred worries that governments could restore restrictions, sharply slowing economic growth.
By Monday, markets had recovered a bit, with oil rising 3.9%, the Standard & Poor’s 500 Index gaining back about half of the 2.3% it shed, and the Dow going up a little.
“This is not March of 2020 when there was almost no information, no treatments and no vaccines for the virus,” Michael O’Rourke, a chief market strategist at JonesTrading, wrote in a commentary. “Society has made remarkable progress versus the virus since the early days of the pandemic. The vaccine companies have already asserted they can develop new vaccines for new variants in approximately 100 days.”
Indeed, President Joe Biden vowed Monday his administration would fight the new variant “not with shutdowns or lockdowns, but with more widespread vaccinations, boosters, testing and more."
Economists at Goldman Sachs said Sunday they aren’t making any omicron-related changes to their economic forecasts until more is known about the variant. They outlined four scenarios ranging from one in which omicron spreads quickly and evades immunity to one that has no effect or could even have some upsides, including potentially lowering inflation by rebalancing supply and demand.
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