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Stocks, oil slide as Omicron worries push investors to safe havens

Stock MarketsNov 30, 2021 23:17
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2/2 © Reuters. FILE PHOTO: A man looks at stock market monitors in Taipei January 22, 2008. REUTERS/Nicky Loh/File Photo 2/2

By David Randall

NEW YORK (Reuters) - Global stock benchmarks and oil prices fell sharply on Tuesday after drugmaker Moderna (NASDAQ:MRNA) warned that existing vaccines are unlikely to be as effective against the new coronavirus variant, spurring investors to pile into safe-haven assets such as government bonds and the yen.

"There is no world, I think, where (the effectiveness) is the same level," Moderna's chief executive, Stephane Bancel, told the Financial Times in an interview, comparing the effectiveness against the new Omicron variant to prior variants.

"I think it's going to be a material drop. I just don't know how much because we need to wait for the data. But all the scientists I've talked to ... are like 'this is not going to be good,'" Bancel said.

Bancel said earlier on CNBC that there should be more clarity on the efficacy of COVID-19 vaccines against the Omicron variant in about two weeks, but it could take months to begin shipping a reworked vaccine designed for it.

"It's not good news, and it's coming from someone who should know," said Commonwealth Bank of Australia currency strategist Joe Capurso. "Markets have reacted in exactly the way you'd expect them to."

Losses accelerated after Federal Reserve Chairman Jerome Powell told Congress that high inflation will persist until the middle of next year, leaving the central bank "likely" to discuss speeding up the tapering of the asset-buying program it introduced last year to support the economy during the pandemic.

"We've long maintained that the Fed is the ultimate owner of the 'transitory' characterization and the chair's decision to move beyond that is a decidedly hawkish step," said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets.

MSCI's gauge of stocks across the globe shed 1.39% following broad declines in Europe and Asia. Concerns that the new variant would lead to more travel restrictions continued to hammer European travel and leisure stocks, which posted their biggest monthly fall since the initial COVID-19 lockdowns in March 2020.

In the United States, the Dow Jones Industrial Average fell 652.22 points, or 1.86%, to 34,483.72, the S&P 500 lost 88.26 points, or 1.90%, to 4,567.01, and the Nasdaq Composite dropped 245.14 points, or 1.55%, to 15,537.69. [.N]

Benchmark 10-year notes last rose 26/32 in price to yield 1.4426%, from 1.529% late on Monday.

Omicron worries sent the yield on 10-year German Bunds - regarded as one of the safest assets in the world - to its lowest level in just over a week at -0.345%.

The Japanese yen - traditionally viewed as a safe harbor due to its role as a funding currency - was near its highest level of the month.

U.S. crude fell 4.52% to $66.79 per barrel and Brent was at $70.57, down 3.91% on the day [O/R]

Stocks, oil slide as Omicron worries push investors to safe havens
 

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Comments (6)
David Hawley
David Hawley Nov 30, 2021 20:29
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crazy. it's got nothing to do with Omicron. just shorting because there's money to be made. the stick market could put an end to it but they won't...because most of them are in on it
Vinit agarwal
Vinit agarwal Nov 30, 2021 18:31
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so greedy minds see another opportunity to make money, all this is big money game. even moderna guy must have shorted and then spoken obvious
Peter kur
Peter kur Nov 30, 2021 17:53
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https://www.bloomberg.com/news/articles/2021-11-30/oxford-sees-no-evidence-omicron-defeats-covid-vaccines-so-far
Ed Douglas
Ed Douglas Nov 30, 2021 17:53
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Thanks for that Peter, I have beem sharing it. Also along the same lines see below. Sky New posted today @ 19.29 GMT 'Don't freak out' over Omicron, vaccine inventor says Amid a seemingly relentless stream of news updates around Omicron, much of them not entirely positive, readers can be forgiven for falling into a constant state of anxiety about the potential impact of the new variant. So comments from the inventor of one vaccine should at least offer some degree of reassurance. BioNTech SE co-founder Ugur Sahin, whose company teamed up with Pfizer to create one of the most widely used jabs in the world, said he believed vaccinated people would likely still be protected from serious illness and death. "Our message is: Don’t freak out, the plan remains the same: Speed up the administration of a third booster shot," he told WSJ. "Our belief [that the vaccines work against Omicron] is rooted in science: If a virus achieves immune escape, it achieves it against antibodies, but there is
Ed Douglas
Ed Douglas Nov 30, 2021 17:53
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Part 2 - the second level of immune response that protects from severe disease—the T-cells. "Even as an escape variant, the virus will hardly be able to completely evade the T-cells."
Drake Richards
Drake Richards Nov 30, 2021 15:05
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Moderna are the Freddie and the Dreamers of vaccine manufacturers...viruses mutate all the time. if it is obvious to me that the protein spike would change then it must have been obvious to THEM !
Fui Khee Lai
Fui Khee Lai Nov 30, 2021 10:17
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yea...we have pfizer and other vaccines which could be more effective than Moderna.
FMGK Blue
FMGK Blue Nov 30, 2021 7:00
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it's no good news for Moderna and their vaccine. it's great news for Pfizer and Valneva! Moderna is not the only provider. they did bet of the protein spikes which mutated heavily for the new variant. Pfizer and Valneva will get Moderna's market-share!
 
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