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Vaccines

Global Markets and Oil Prices Plummet Amid Omicron variant Concerns

Strategic Insights

— 1 min read

Global stock markets and oil prices plummeted yesterday after vaccine maker Moderna warned that existing jabs may be less effective against the new omicron variant of Covid-19. The company's chief executive, Stephane Bancel, predicted a significant drop in vaccine effectiveness and said it would take several months for pharmaceutical companies to produce an omicron-specific jab at scale. This warning, coupled with a contrast between Bancel's tone and more optimistic statements from Pfizer and BioNTech, triggered a sharp decline in markets, with the FTSE100 tumbling 1 per cent and oil prices plummeting by 3.2 per cent.

Key Takeaways:

  • Moderna's CEO, Stephane Bancel, warned that existing vaccines may be less effective against the omicron variant, predicting a "material" drop in effectiveness.
  • Bancel stated it would take several months for companies to produce an omicron-specific jab at scale, with Pfizer and BioNTech estimating a 100-day shipping timeframe for their new vaccine.
  • AstraZeneca reassured that existing vaccines provide high levels of protection against severe disease, with no evidence suggesting omicron is different.
  • Governments have begun implementing tighter restrictions, with airlines and hospitality sectors expressing concern, with EasyJet revealing losses of over £1.1bn.
  • EasyJet's CEO, Johan Lundgren, expressed optimism for a post-pandemic recovery, citing strong demand for summer travel.
  • Several countries, including the US and UK, have imposed travel restrictions from southern African countries where the variant first emerged.
  • Public health experts are pushing for mandatory mask-wearing in a wider range of settings beyond public transport.
  • Economic uncertainty is expected to ease in 2022 with the introduction of antiviral drugs, which could mark the transition from pandemic to endemic.

Statistics:

*_Global Markets:_

+ FTSE100 fell by 1% (to 7,021.75)

+ Brent crude oil prices plunged by 3.2% (to $71)

+ West Texas Intermediate oil prices dropped by 2.8% (to $68)

  • _EasyJet:_

+ Revealed losses of over £1.1bn

  • _Omicron variant:_

+ Thought to be more transmissible than previous Covid variants

+ Contains multiple mutations that may allow it to evade vaccines

Sources:

  • Moderna and Financial Times
  • AstraZeneca
  • EasyJet
  • AJ Bell
  • Ian Shepherdson, chief economist at Pantheon Macroeconomics

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