Worldwide news outlets are reporting that a new, “highly concerning” variant of the coronavirus, called B.1.1.529, has recently been identified in South Africa. Fears that the new strain could fuel further global outbreaks, pressure health systems, evade vaccines, and complicate efforts to repair economies and reopen borders sent a wave of risk aversion across global markets Friday. Stock indexes and crude oil tumbled while Treasuries rallied, and governments around the world have started banning travelers from South Africa and nearby countries.
As of Friday morning, volatility traders were rushing to bet on turmoil in the U.S. stock market as fears over a new coronavirus strain begin to upset weeks of tranquil trading, according to reports from Bloomberg news.
The Cboe Volatility Index, or VIX, jumped as much as nine points on Friday morning, the biggest intraday move since February, according to data compiled by Bloomberg, and exchange-traded products tied to the index led ETF gains in early trading.
The index, often referred to as Wall Street’s “fear gauge,” measures the implied volatility of the S&P 500 over the next month, and the gauge has enjoyed a relatively calm few weeks as traders have focused on monetary policy and the pace of growth, rather than the virus.
The World Health Organization said that currently, there are fewer than 100 whole genomic sequences of the new strain available, which could increase the time it takes to study how the new strain compares to previous ones, and its impact on Covid therapies and vaccines. Viruses are constantly mutating, with the changes sometimes weakening the virus, or sometimes making it better at evading antibodies and infecting humans. Covid vaccines have shown they are effective against previous variants and pills being developed by major pharmaceutical companies, Merck and Pfizer, may also provide new treatments.
However, in the U.S. (which recently lifted a year-long ban on tourism from much of the world) Dr. Anthony Fauci said he wants to see more data. The European Centre for Disease Prevention and Control has assigned the variant the category “Variant of Concern.”
BioNTech expects the first data from laboratory tests about how it interacts with its vaccine within two weeks.
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