The contracts on the Dow Jones gained more than 150 points, or 0.5%. On Friday, the index had experienced its worst day since October 2020, losing more than 900 points, or 2.5%.
U.S. airlines and other travel stocks were mostly above stable after steep losses late last week, when initial concerns over the newly discovered Omicron variant of the coronavirus in South Africa fueled fears regarding the renewal of global restrictions. Meanwhile, Zoom Video Communications (ZM), Peloton (PTON) and other stocks that have been the mainstays of “home-based” trading returned some of Friday’s gains. Tech stocks that had become defensive games during the pandemic, however, held up largely on Monday, and Nasdaq futures outperformed.
“Ultimately this is not the first or last variant of alert and our technology strategy over the past 18 months has been to use these macro / risk-free events as buying opportunities to own the industry. technology, especially cloud, cybersecurity and 5G winners, ”Wedbush analyst Dan Ives wrote in a note Monday morning. “As we see a return to normalcy, a semi-remote workforce environment that we believe is here to stay, underscoring our tech cloud thesis through 2022 that building the digital transformation will be accelerated and is not a single COVID event ahead ”
The United States and the European Union were among a multitude of destinations to ban flights from several African countries after the discovery of the new variant. But cases of the variant, which the World Health Organization (WHO) has so far referred to as a ‘variant of concern’, have also been detected in areas such as the UK, Hong Kong, Australia, Germany and Italy, among others. Japan, Israel and Morocco have each announced in recent days that they will bar foreign visitors from traveling amid the spread of the latest variant.
While there is still a lot to be confirmed about the Omicron variant – including whether it is more transmissible or causes more severe disease than previous variants – vaccine makers have previously said they are working to adapt their existing inoculations to the new strain. Moderna (mRNA). Chief Medical Officer Paul Burton told the BBC on Sunday that a new vaccine against Omicron could be widely available in early 2022. Pfizer (PFE) and BioNTech (BNTX) said last week they expected to have data on the latest variant within two weeks, and it could take around 100 days to create a vaccine specifically tailored for a new variant. The WHO said preliminary evidence on Omicron suggested “an increased risk of re-infection with this variant, compared to others. [variants of concern]. »
Many market experts have argued that it is still too early to say how Omicron behaves from an epidemiological standpoint and how that will affect economic activity, if the bottlenecks or hold-up behavior widens.
“What should we be looking for? A strong leading indicator will be what happens to hospitalizations and deaths in South Africa, where this has become dominant. If there is a noticeable spike, then it has worrying implications for elsewhere, ”Henry Allen, Deustche Banking Research Analysts, wrote in a note.
“Nonetheless, there are two key differences that should be kept in mind between South Africa and much of the developed world: First, Europe and the United States have vaccination rates. much higher, which (assuming the vaccine is not ineffective) may offer greater protection, ”he said. added, noting that South Africa has fully vaccinated 24% of its population compared to 58% in the United States and 69% in France. “This suggests that they may have advantages over South Africa. But second, Europe and the United States have much older populations, and age is a factor strongly correlated with the likelihood of hospitalization and death. In South Africa, the country’s median age is 28, well below the median age of 44 in Western Europe. ”
8:45 a.m. ET: Vaccine makers’ stocks jump as companies work on plans to tackle Omicron
Shares of major COVID-19 vaccine makers, including Pfizer, BioNTech and Moderna, surged Monday morning after executives at those companies said they were working on inoculations that would directly attack the new Omicron version of the virus. .
BioNTech’s US Certificates of Deposit rose more than 5.5% pre-market. Pfizer stock gained 1.7%, while Moderna stock outperformed with a jump of more than 10% at the start of the session.
7:45 a.m. ET Monday: Stock futures recoup some losses
Here are the main movements in the markets before the opening bell
- S&P 500 Futures Contracts (ES = F): +31.75 points (+ 0.69%), at 4,627.50
- Dow Futures (YM=F): +180 points (+ 0.52%), at 35,038.00
- Nasdaq Futures (NQ = F): +132 points (+ 0.82%) at 16,183.00
- Brut (CL=F): + $ 3.33 (+ 4.89%) to $ 71.48 per barrel
- Or (CG=F): + $ 5.20 (+ 0.29%) to $ 1,793.30 per ounce
- 10-year cash flow (^TNX): +6.2 bps for a yield of 1.547%
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter