The coming weeks will see a lot of volatility in the stock market.
AP Photo/Richard Drew
The CEO of Moderna said he doubts existing vaccines will be effective against the new Omicron COVID-19 strain.
The S&P 500 futures fell as much as 90 points as of 3:20 a.m. The time is later. When markets open later in the day, there is a chance of a reversal of Monday's gains.
The prices of government bonds and the yields on them were pushed up by investors. The yield on the 10-year US Treasury note fell.
The Financial Times published an interview with Moderna boss Stephane Bancel in which he said there is no world in which vaccine effectiveness is the same against Omicron and Delta.
The pharmaceutical company's CEO said it will take months for vaccine-makers to develop and distribute large numbers of effective shots.
The comments unnerved investors, sparking fears that the Omicron variant could lead to new travel restrictions around the world, which could derail the global economy's recovery.
European stocks fell at the open, with the Stoxx 600 down 1.07% and the London's FTSE 100 down 1.08%.
Tokyo's Nikkei 225 index fell into the red in the last hour of trading to close 1.63% lower. Hong Kong's Hang Seng fell.
Lee Hardman of theMUFG said that market participants are fearful of the worst case scenario, that Omicron could become the dominant strain, cause more serious side effects, and reduce vaccine efficacy that would result in a larger slowdown in global growth next year.
The Japanese bank's currency analyst said he expects investors to remain cautious about risk-taking until there is greater clarity over the potential impact from the new Omicron variant.
The World Health Organization has said that more information will emerge in the coming days and weeks.
If central banks are forced to maintain support for economies longer than expected, investors will be watching closely.
The recent rise in COVID-19 cases and the emergence of the omicron variant pose downside risks to employment and economic activity, according to Federal Reserve Chair Powell.
His words came in a prepared statement ahead of a Senate Banking Committee appearance.
Oil prices fell as the Omicron situation put a damper on the demand outlook. The price of oil was lower, with the price of oil falling by 2.19% to $68.42 a barrel.
The meeting of the group of oil- producing countries is scheduled for Thursday.
The dollar index fell as investors sought safety.
As they moved away from riskier assets, the price of Bitcoin fell.
Christian Keller, head of economics research atBarclays, said in a note that "answering key questions about Omicron may take weeks, which could mean elevated uncertainty for the remainder of the year."
The most benign outcome would be the discovery that 'Omicron' is neither more transmissible, nor deadly than earlier versions, and that existing vaccines are effective against it.
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Business Insider has an original article.
