It appears that the Covid-19 pandemic is far from over. A new, significantly more aggressive strain of the virus has emerged from Southern Africa, threatening to once again send the global economy into a tailspin.
US, European, and Asian stocks were sent plummeting on Friday, as news of a new, highly transmittable Covid-19 variant from South Africa sparked a massive selloff in riskier assets. The Dow Jones was down more than 2.5%, marking the worst trading day since the beginning of the year, meanwhile the Nasdaq slid 2.2% to a session low.
The price of crude also slid on the news, marking the sharpest one-day decline since the beginning of July. Benchmark Brent fell by as much as 5% to $77.70 per barrel on Friday, while WTI was down over 6.6% to around $73.10 per barrel. Investors are also bracing for further announcements from OPEC, which next week is expected to potentially scrap output increases in response to the release of strategic reserves by several countries, particularly the US.
Cryptocurrencies were also sent plummeting, with bitcoin falling by nearly 7% to around $54,000 per coin, just one day after nearly getting back above $60,000. Ethereum also lost its momentum on Friday, tumbling by as much as 6% as investors rapidly exited their riskier positions.
The latest global market slump comes as the World Health Organization announced that a new variant has been detected in South Africa, which is said to contain even more spike proteins than the already-highly contagious delta variant. As a result, scientists are warning that the newest strain— called B.1.1.529, or omicron— may have an increased resistance to current vaccines, thus threatening to derail the current economic recovery via additional lockdowns and restrictions.
Information for this briefing was found via the WHO and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.