What the New COVID Curveball Means for Markets
You know the bad news by now.
There’s a new COVID-19 variant known as Omicron, and it rippled the markets last Friday.
But do you know how to protect yourself? How to profit? Let me share something I already sent to my paying subscribers … with a couple updates.
The short version: A new variant of COVID-19 popped up in South Africa. And this one is causing real concern among scientists. The rest of the world, having just climbed out of a hole dug by the Delta COVID-19 variant, did not receive the news with good humor.
On Monday, we saw stocks bounce back and regain at least SOME of their Friday losses. That made things even more confusing for many investors. Should they buy … or sell? And what should WE do this week, and going forward?
Let me start by admitting what most people on Wall Street hate to say out loud: There’s a lot I don’t know, and I don’t have all the answers.
However, I’m gathering information as fast as possible. And there may be opportunities for us — extraordinary profit opportunities — as the rest of Wall Street throws up on its Gucci loafers.
But what Wall Street also won’t admit is that the stocks were pumped up on hopium anyway ... and looking for a reason to sell off.
That’s why I’ve recommended taking a string of gains in things that weren’t cheap. On Friday, the balloon finally got pricked, and the air came rushing out.
Back in August, I told my Wealth Megatrends subscribers that the biggest threat to the market’s blazing rally was a new COVID-19 variant. On Friday, we saw how swiftly the market reacted.
Could more air rush out? Could this balloon go lower? The answer to that will be primarily news driven, and that news will focus on Omicron. There are other market obstacles, starting with the Dec. 3 deadline to raise the U.S. debt ceiling, but let’s cross one burning bridge at a time.
There are three things we have to know about Omicron:
- Does it spread more easily than previous variants?
- Is it vaccine resistant?
- Is Omicron more or less deadly than previous variants?
There is evidence that Omicron spreads more easily than other variants. It’s in two dozen countries now.
Also, Omicron contains a lot of mutations. About 50 known at the moment. And more than 30 of these are on the spike protein that allows the virus to bind to human cells.
This is many more than the Delta variant, and that’s why all the infectious disease specialists are doing controlled breathing exercises when they weigh the odds if it’s vaccine resistant.
There simply isn’t enough evidence to show how deadly Omicron is. However, the first South African physician to raise the alarm over Omicron has called its symptoms unusual but mild.
More good news – both Pfizer (NYSE: PFE) and Moderna (Nasdaq: MRNA) say they’ll have vaccines to deal with Omicron in 100 days. A couple of years ago, that would have been impossible.
So, what damage can happen before the next vaccine rolls out? Again, we don’t know.
Taking large, dramatic actions in a panicked market driven by news flow would be a dumb thing to do. What would be smart is to take small positions that could pay off big time, if certain bets work out.
However, let’s take heart from history. Do you know what ended the 1918 flu epidemic? Worldwide, 50 million people died of the Spanish flu, including 675,000 in the United States. Then, they SAY the Spanish flu” “went away.”
But did it really?
The fact is it mutated into a variant that was MORE transmissible while at the same time LESS deadly.
It is very likely that the same thing will happen with COVID-19 — eventually. If Omicron turns out to be less deadly and more transmissible than previous variants, it could be happening right now.
But again, we don’t know. Yet.
Here’s what I do know: Some things went on sale Friday that probably should not be on sale. Again, a lot depends on how global markets handle their fear of Omicron.
But as the old saying on Wall Street goes, “If you’re going to panic, panic early.” Friday was the day to panic. Now, and going forward, we’re not going to panic.
That’s what I will help my paying subscribers do. I’m already working on new ideas for them. If you’re doing this on your own, now is NOT the time to hide under your desk. Get busy, find those opportunities and target profits.
All the best,
Sean
