Worries about a new strain of the virus, named Omicron and classified by the World Health Organisation as a variant of concern, slammed markets worldwide and dealt the S&P 500 index its biggest one-day percentage loss in nine months.
At least, investors said signs that the new strain is spreading and questions over its resistance to vaccines could weigh on the so-called reopening trade that has lifted markets at various times this year.
It isn’t over,” said David Kotok, chairman and chief investment officer at Cumberland Advisors.
The S&P 500 fell by a third as pandemic fears mushroomed in early 2020, but has more than doubled in value since then, though the pandemic’s ebb and flow has driven sometimes-violent rotations in the types of stocks investors favor.
Before Friday, broader vaccine availability and advances in treatments made markets potentially less sensitive to COVID-19.
At the same time, stocks that had rallied this year on bets of economic reopening may suffer if virus fears grow.
Each of these optimism collapses were a good buying opportunity,” wrote Bill Smead, founder of Smead Capital Management, in a note to investors.
Investors held out hope that markets could stabilize.
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