Market shares ahead: Wall Street wonders if Omicron could be good for the market

But what if this variation turns out to be not so bad for the market and the economy? It’s a view expected to be shopped by some on Wall Street.

Obviously, more data from scientists is needed before any conclusions can be drawn. But some investors are highlighting the possibility that Omicron leads to milder disease than the Delta variant, which caused a spike in cases globally earlier this year. That could produce a positive outcome for the stock, they argue.

“One thought. While it’s too early to have precise data, early reported data suggest that the Omicron virus causes ‘mild to moderate’ (less severe) symptoms and is contagious. more”, hedge fund billionaire Bill Ackman tweeted last weekend. “If this turns out to be true, this is an uptrend not a bearish one for [stock] market. “

And he’s not alone in spotting a potential “backward.” A team of strategists at Goldman Sachs looked at four scenarios for the economy. One of them is based on chance that “Omicrons are a bit more contagious but cause much less severe disease.” This could boost global growth as restrictions are eased and allow inflation to fall faster.

The investment bank said it would not make any Omicron-related changes to its economic forecasts “until the likelihood of these scenarios becomes somewhat clearer.” It also covers two situations in which the effects of Omicron variation are negative.

One big caveat: Wall Street analysts are not infectious disease experts. Dr Angelique Coetzee, president of the South African Medical Association and one of the doctors who treat patients with the Omicron variant, told CNN on Tuesday that the majority of cases of the variant she has seen have been is mild, but still the early days.

For its part, the World Health Organization considers Omicron a “variant of concern” and said that “preliminary evidence suggests an increased risk of reinfection.” The scientists stress that it could take weeks until they have answers to three key questions: Do mutations in Omicron make it more transmissible? Is it more severe or deadly than other variants? And is it more resistant to vaccines?

But the barrage of appeals to the investment community – buy, sell, do nothing – underscores the depth of the uncertain market currently facing. That will make stocks particularly sensitive to news in the days and weeks ahead.

See here: The markets are pull back on Tuesday after a warning from Moderna’s CEO that existing vaccines would struggle with Omicron. It’s far from exact – but for investors, it’s a headline to trade.

“There is no world, I think, where [the effectiveness] is the same level. . . we had with [the] Delta [variant]”, Stéphane Bancel said in an interview with the Financial Times published Tuesday. I think it will be a material drop. I just don’t know how much because we need to wait for data. But all the scientists I talked to… said, “This isn’t going to be good.”

Jack Dorsey resigns as Twitter CEO

For many years, Jack Dorsey has been the face of Twitter (TWTR), directing it through the controversies of the Trump years and criticism on social media.

Now, he steps down. On Monday, the company announced that Dorsey – the co-founder of Twitter – would be stepping down from his role, effective immediately, and handing the reins to Parag Agrawal, Twitter’s chief technology officer.

Jack Dorsey resigns as CEO of Twitter

“I decided to leave Twitter because I believe the company is ready to continue growing from its founders,” Dorsey said in a statement. “My trust in Parag as Twitter’s CEO is profound. His work over the past 10 years has been transformative. I’m incredibly grateful for his skill, heart, and talent. his soul.”

Dorsey told staff the decision to leave was his own and was a “difficult decision”.

Remember: Dorsey returned to the role of chief executive officer in 2015 to help turn the social network’s business around. During his tenure, Twitter turned a profit, announced a first quarter of $1 billion, and began testing and releasing a host of features to attract users.

But like its peers, Twitter also faces the challenge of content moderation, as well as increasing scrutiny from lawmakers and the public, said Brian Fung, my CNN Business colleague. , note.

Although much smaller than rivals like Facebook, Twitter is at the center of debates about the responsibility of social media platforms to curb hate speech, violent rhetoric, and disinformation. misinformation on their websites.

Dorsey had to deal with these issues while he was CEO of Square, the payments company he co-founded. Activist hedge fund Elliott Management has pushed for changes, including the possible removal of Dorsey, as recently as last year, but he survived the bidding war.

Investor insight: Twitter shares are up more than 30% from the start of 2015 through the end of Friday. They ended Monday down 2.7%.

Facebook Meta Owner Has Been Ordered To Sell Giphy

Meta (Facebook) was ordered the cancellation of the recent acquisition of Giphy by regulators worried about the deal’s impact on competitors – a blow to Facebook’s owner and a warning to Big Tech as the industry faces antitrust scrutiny. permission.

The Latest: The UK’s Competition and Markets Authority said on Tuesday that Meta’s control of the popular search engine for GIFs – short, repetitive videos and animations – will reduce competition between social media platforms and has eliminated a potential competitor in the advertising market, my colleague Mark Thompson of CNN Business reports.

Facebook, then known as Meta, bought Giphy, supposedly for $400 million, in 2020. They are intending to integrate the service with Instagram, making it easier for people to find GIFs that include related for their stories and direct messages.

In announcing the deal, Facebook vowed to give the same third parties access to Giphy’s content as before. However, less than a month after the acquisition was announced, the CMA said it was looking into the matter.

In initial findings published in August, the regulator said that Facebook’s control of Giphy could have allowed it to cut off other social media sites’ access to GIFs. Giphy’s services now integrate with platforms like Twitter, Snapchat, Apple’s iMessage, and Slack.

Meta said on Tuesday it disagreed with the CMA and was considering “all options, including appeal.”

Why it matters: While far from the biggest deal Meta has ever made, the Giphy acquisition is the first high-profile corporate acquisition that government officials have attempted to back out of. Is this a harbinger of more aggressive actions to come?


Sales force (CRM) earnings after the US market close.

Also today:

Coming tomorrow: Powell and Yellen’s second day of testifying before Congress, this time before the House Financial Services Committee.


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