Elliot Hentov talks about the potential implications of Omicron’s emergence. Video (1:58)
The virus is back, or is it really?
It's been months since investors thought about COVID as a market driver, but the arrival of the Omicron variant does raise several questions. I'll make three quick points here.
The first is uncertainty. Uncertainty usually parallels volatility, and we should still continue to see more of that in the coming days and weeks as a variety of medical data comes to light. Some of it will be from labs, some of it from the real world. But a lot of it has the potential to push markets in different directions.
Given the sensitivity of the topic, the second point is risk. All in all, risks are clearly to the downside. Why? Well, in the best-case scenario, nothing changes. Omicron just, you know, the vaccine wall holds steady. It performs, and you basically have a continued, slow climb out of the pandemic, but the worst-case scenarios could be quite worse. It could lead to some regions of the world reimposing restrictions and curtailing economic activity, and therefore exacerbating the pandemic stress on the global economy.
And that leads me to point 3, which is policy support. It would certainly be weaker. We could not expect the same fiscal easing we had in the last 20 months, but more importantly, central bankers are fighting an enemy today named inflation and given inflationary levels where they are, monetary policy would certainly not be as supportive. And therefore Omicron needs to still be taken seriously. Even if initial signs are promising that the vaccines will hold.
The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor. All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information.
The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without State Street Global Advisors’ express written consent
This document may contain certain statements deemed to be forward-looking statements. Please note that any such statements are not guarantees of any future performance and that actual results or developments may differ materially from those projected in the forward-looking statements.
The views expressed in this material are the views of the author noted through the period ended 07 December 2021 and are subject to change based on material and other conditions. This document contains certain statements that may be deemed forward-looking statements.
Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.
This website is intended for persons resident in Australia. State Street Global Advisors, Australia Services Limited ABN 16 108 671 441, AFSL Number 274900 ("SSGA, ASL") is the product issuer. State Street Global Advisors, Australia, Limited (AFSL Number 238276, ABN 42 003 914 225) (“SSGA Australia”) is the Investment Manager. The material on this website is general information only and does not take into account your individual objectives, financial situation or needs.
You should seek professional advice and consider the Product Disclosure Document (PDS) and target market determination, available at www.ssga.com, before deciding whether to acquire or continue to hold units in the Funds.
You can access our PDS online or by calling us. The offer made in our PDS is available to persons receiving the PDS within Australia and applications from outside Australia will not be accepted. Past performance is not a reliable indicator of future performance. Investing entails risks and there can be no assurance that State Street Global Advisors will achieve profits or avoid incurring losses.
Investing involves risk including the risk of loss of principal. This material should not be considered a solicitation to apply for interests in the Funds and investors should obtain independent financial and other professional advice before making investment decisions. There is no representation or warranty as to the currency or accuracy of, nor liability for, decisions based on such information. Performance quoted represents past performance, which is not a reliable indicator of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted.