January 27, 2022
Wall Street's fear gauge spikes amid fears over new COVID-19 variant

Wall Street’s fear gauge spikes amid fears over new COVID-19 variant

Wall Street’s fear gauge spiked on Friday as a new, highly-mutated COVID-19 variant detected in South Africa prompted some international locations to reimpose journey bans, reigniting fears {that a} resurgent virus might derail the worldwide financial system’s restoration. 

The Cboe Volatility Index, or VIX, helps measure the extent of fear amongst traders; it jumped as a lot as 54% throughout buying and selling on Friday to twenty-eight.62. Whereas it marks the very best degree for the index since Might 2021, it is nonetheless effectively under the degrees seen within the early days of the pandemic (in April 2020, the gauge almost hit 42). 

It is the biggest intra-day enhance for the measure since January 2021, earlier than COVID-19 vaccines had been available for many People. 

DOW POSTS BIGGEST SINGLE-DAY DROP THIS YEAR AS NEW COVID-19 VARIANT TRIGGERS MARKET SELL-OFF

The spike comes after well being officers warned of a new variant present in South Africa that has a excessive variety of mutations and has unfold rapidly amongst younger individuals. 

The World Well being Group held an emergency assembly on Friday to debate the potential dangers of the new variant – now named “omicron” – and finally determined to label it as a extremely transmissible virus “of concern.” Early proof suggests an elevated threat of reinfection. 

Whereas it was not instantly clear how efficient the vaccines had been in opposition to the new variant, mRNA vaccines – similar to these developed by Pfizer and Moderna – might be simply up to date. 

The financial impacts of the new pressure – which has been present in Hong Kong, Belgium and Israel, in addition to South Africa – had been already being felt on Friday, with at the very least 10 European nations suspending air journey from southern Africa. The 27-nation European Union also recommended an “emergency brake” on journey from southern Africa, citing the “very concerning” new variant 

The U.S. additionally stated it will limit journey for non-citizens from South Africa starting on Monday. President Biden has been briefed on the matter by White Home chief medical adviser Dr. Anthony Fauci.  

(Photo by Timothy A. Clary-Pool/Getty Images)

“The economic recovery has been quite impressive, and the one thing that could knock it over completely would be a more dangerous variant,” stated Ryan Detrick, chief market strategist for LPL Monetary. “Time will tell how worried we should be, but investors are selling in front of potential bad news.”

CLICK HERE TO GET THE FOX NEWS APP

Fears of the new pressure despatched shares tumbling throughout Friday’s buying and selling session, which ended at 1 p.m. ET as a result of Thanksgiving vacation. 

The Dow Jones Industrial Common ended the day down 905 factors, or 2.5%, for its largest one-day level and largest share drop since October 2020. The S&P, in the meantime, fell 2.27%, which can also be its largest one-day level decline since October 2020. The tech-heavy Nasdaq Composite slid 2.23%.



Source link