The words of the CEO of Moderna are destabilizing the markets today after the timid attempt to rebound on the eve of the day. Fears that the Omicron variant will aggravate the health situation and consequently also the trend of economic activity are returning.
The words of the CEO of Moderna and the reaction of the markets
Stephane Bancel, CEO of Moderna, he said in an interview with the Financial Times that he believes existing vaccines are less effective against the new variant of Covid. Bancel also said, in another interview with Cnbc yesterday, that it could take months to develop and distribute an ad hoc vaccine against Omicron. “Moderna CEO’s comments regarding the potential to reduce vaccine efficacy scared markets and caused weakness across the board,” IG strategists argue in their Morning Call this morning.
Words that have reactivated the sales on risky assets with Asian stock markets in trouble and US futures that mark drops in the order of 1%. Oil also hurt with the WTI marking -2% at around $ 68 a barrel. “Risk assets are back under pressure, with markets still awaiting updates on vaccination coverage against Omicron – argues Francesco Pesole, Ing FX Strategist -. The discussion is now moving towards monetary policy as markets have priced in the tightening of the Fed (and other central banks), in view of Powell’s testimony in today’s Senate ”.
For now, the US administration is not assuming that new vaccine formulas will be needed and is simply planning to distribute booster doses faster (as in most other developed countries).
Fed ready to slow down on rate hikes?
From excerpts from the speech that Federal Reserve Chairman Jerome Powell will make today to Congress, it emerges that the number one of the American central bank will say, in particular, that the recent increase in Covid-19 cases and the Omicron variant represent downside risks. for employment and economic activity and an increase in uncertainties for inflation. Powell suggests that mutations in the virus could therefore have a significant impact on the US economy. And the markets are starting to reconsider the Fed’s next moves, with the new scenario that could question the rate hikes that the market expected for 2022.
At Piazza Affari the Ftse Mib index dropped 1.56% in the area of 25,656 points. Among the big names on the Milanese market, the banks reported declines: -1.75% Intesa Sanpaolo and -1.9% Banco BPM. Energy stocks are also in trouble with ENI down by more than 2% in the 11.53 euro area after yesterday excelling on the Ftse Mib in the wake of the rebound in oil. Very bad Stellantis at -2.99% at 15.11 euros. The only stock to mark increases is Diasorin (+ 2.4%).