Moderna warned that the chances of existing vaccines being effective against new coronavirus are flimsy and what followed was global stock benchmarks and oil prices taking a dive. The investors hurdled towards safe-haven assets like government bonds and the yen.
To compare the effectiveness against the new variant, it cannot be the same in any world, according to Moderna’s chief executive, Stephane Bancel. He thinks that it will be a material drop, but he is not sure how much since the data is yet to come. However, Bancel said most scientists are not expecting it to be good.
Bancel had mentioned earlier that there is a need for more clarity around the efficacy of Covid-19 vaccines against the new Omicron variant. Still, it would take months to start shipping redesigned vaccines.
Joe Capurso, Commonwealth Bank of Australia Currency strategist, said that it is not good news, and markets have not reacted well.
As Jerome Powell, Federal Reserve Chairman, told Congress that high inflation is going nowhere until the next year, the losses magnified. As a result, the central bank is now left to discuss speeding up the tapering of the asset-buying program that was launched last year to support the economy in the pandemic.
They have so far attested that the Fed is the owner of the ‘transitory’ characterization. According to Ian Lyngen, head of US rates strategy at BMO Capital Markets, the chair’s decision to move forward is a hawkish step.
MSCI’s estimated stocks globally shed 1.39% following massive declines in Europe and Asia. European travel and leisure stocks suffered from concerns rising that new variants will lead to travel restrictions. As a result, these stocks saw their biggest monthly fall since the first Covid-19 lockdowns in March 2020.
Talking about the United States,
- The Dow Jones Industrial Average declined 1.86% to 34,483,72 or 652.22 points.
- The S&P 500 sell 88.26 points, or 1.90% to 4,567.01.
- The Nasdaq Composite lost 245.14 points, or 1.55% to 15,537.69.
- Benchmark 10-year old notes on late Monday saw a rise 26/32 in price from 1.529% to yield 1.4426%.
- Omicron concerns sent the yield on one of the safest assets globally, 10-year German Bunds, to its lowest level in just a week at -0.345%.
- Yen almost reached its highest level for the month.
- US crude dipped 4.52% to $66.79 per barrel.
- Brent dipped 3.91% at $70.57.