Intraday Update: New Strain Of Virus Sinks Market.
What was shaping up to be a fantastic holiday season for investors has taken an unfortunate turn for the worse. We just heard news from Europe that they have shut down their borders due to a new strain of the Coronavirus. Boris Johnson, Prime Minister of Britain, will hold a press conference in response to France’s shutdown. Most European countries have cancelled any and all flights from Britain. The strain is tracked from Kent, England.
Johnson has explained that the new strain of this virus spreads at a 70% higher rate than the previous strain. The UK reported close to 36,000 new cases, which was a record number for the country. Virus experts are continuing to stress to global leaders that this strain is not as deadly as the first initial strain. The United States has yet to shut down flights to and from the UK, yet months prior to the shutdown Trump shutdown flights to and from China, a heavily scrutinized decision which ended up being an excellent choice, though many of the infections have come from Europe.
While many may be skeptical of the severity of this virus strain due to the fact that it’s “less deadly” than the current strain we’ve been fighting, we need to understand the severity of how transmissible the new strain is. As stated earlier, it's 70% more transmissible, which would require a shutdown if there is an uncontrollable spread in the US. This new strain spooked early investors and futures investors, but the markets have gained some since their early lows.
The market has rebounded from the early lows, thankfully. The Dow is now down -226.53 points, or -0.75%. The S&P 500 is down -46.13 points, or -1.23%. The Nasdaq is down -127.97 points, or -1.00%. Though this new virus strain is more of the same, unknown with anticipated fear, it will be difficult to sink the market too much. With vaccine rollout beginning in the US this week, the new stimulus bill passed, and high spending during the holiday season, we will see what this fear will do to the market, but I’m not certain it will be much of a factor. Many investors have a second shutdown priced in already.