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Saturday, January 29, 2022

What investors say about the impact of the new variant of Covid-19

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EDWARD MOYA, SENIOR MARKET ANALYST OF OANDA

“After the Fed minutes, it seems that everyone expected an accelerated reduction in the purchase of Fed bonds. If we continue to see a greater diffusion of this new variant, you could begin to see that it is argued that no, that we have to gradually exit the stimulus here and what we’re not entirely sure how vaccines against this and possibly more variants will hold up in the future, since we are not close to vaccinating the rest of the world. “

“What has really complicated today is that we have an option expiration day and extremely light trading conditions, so I think that ultimately, when everyone is back next week, if this concern about the variant continues to dominate the news, we will begin to see how the purchases of dollars for refuge resume “.

GREG BASSUK, DIRECTOR GENERAL DE AXS INVESTMENTS PORT CHESTER

“The bottom line is that this shows that Covid-19 is still the investor narrative, much of the movement today is driven by the South African variant. We’ve talked about four or five factors that have driven activity for the last two. months – inflation fears, some economic data, Fed policy – but What we’ve seen in the last year is that the big events around Covid-19 have ended up overshadowing some of those other factors to a substantial degree. and that’s what is driving the activity of the market from today”.

“In the long term, we are very bullish that stocks will have a much longer run through 2022, with the economy reopening and supply chain problems mitigated. But one thing we have seen, and that has been consistent over the last year and a half, it was these more exaggerated shocks or developments regarding the coronavirus that really shook the markets the most. “

JACK ABLIN, DIRECTOR DE INVERSIONES DE CRESSET CAPITAL MANAGEMENT

“It is quite surprising that on Wednesday such strong economic news was released. I think there is something in this, obviously it is worth investigating. The latest news we have heard is that they have detected this variant in Belgium, so it is not an isolated thing. in South Africa. In principle, I would say that the vaccination rate in South Africa is very low and is probably fertile ground for these variants. Without a doubt, we must continue to monitor. What we are going to see today is going to be exaggerated only because of the lack of liquidity“.

“It certainly requires more study and more observation, but my first reaction is that everything we are going to see today is exaggerated, so if we end up going down a lot, it will probably become a buying opportunity.”

BRIAN JACOBSEN, SENIOR INVESTMENT STRATEGY, ALLSPRING GLOBAL INVESTMENTS

It is not the virus itself that the market fears, but political reactions to the virus. If there are new restrictions or greater restrictions on the activity, we could see some effects in the next week and month. Some countries, like the United States and the United Kingdom, might not react as much as countries like China, with its zero-Covid strategy. Just when it seemed like the supply chains were healing, this could cause some setbacks. “

PETER RUTTER, JEFE DE RENTA VARIABLE DE ROYAL LONDON ASSET MANAGEMENT

“What we have is a huge input of uncertainty rather than something material, but the markets don’t like that. The very fact that we do not know is what worries the market. There are a wide variety of possible outcomes. We may or may not have severe lockdowns and a booming economy. “

STEEN JAKOBSEN, INVESTMENT DIRECTOR OF SAXO BANK

“A new wave of Covid-19 is leading investors to fly to safety, causing yields to drop approximately 10 basis points across the entire US yield curve. However, we expect the bond rally to be short-lived for several reasons. First, the market has learned through past stresses that the virus is temporary. Second, a renewal of lockdown measures would worsen supply chain bottlenecks, introducing even more inflationary pressures into the economy. Therefore, central banks need to stop stimulating demand, keeping the Fed’s recent aggressive bias intact.

Source From: Ambito

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