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Stock market tells us to reduce Omicron fears

Peter Switzer
7 December 2021

The US stock market is jumping on board with what our expert medico Dr Ross Walker wrote yesterday that Omicron’s threat factor could be over-hyped! Overnight in the US, the share prices of Moderna and Pfizer fell and those of airlines and hotel groups spiked higher.

This great news is both terrible and great for different groups of shareholders but it says Wall Street and the big investors of the global stock market like what they’re seeing and hearing about Omicron’s potency. And as a consequence, Moderna’s share price tumbled 15% at one stage overnight!

Interestingly, this news follows revelations in the Daily Mail in the UK that 'Pfizer and Moderna shareholders pocket £7.8 billion in a week after Omicron was discovered', the headline reads!

The story goes like this: “Top shareholders at Pfizer and Moderna made more than £7.8 billion ($10 billion) in stocks growth in the week after the discovery of Omicron,” MailOnline reports. “Shares in the pharmaceutical giants rose by 7.4 per cent and 13.6 per cent respectively in the seven days to November 30 — after South Africa alerted the world to the mutant strain on November 24.”

The newspaper/website says eight stakeholders made a £7.5 billion figure between them, with Moderna's chief executive Stephane Bancel ‘earning’ £623million ($824million) in share growth alone!

But wait, there’s more — he “sold 10,000 of his own stocks for $319 each on November 26 for a total of £2.41 million ($3.19million) up front”.

But the unrealized gains on the stock price spike is disappearing, as stocks linked to the reopening of the economy gained on US stock markets overnight. The likes of Boeing was up over 3% but CNBC reported that the “biggest gains came from leisure and hospitality stocks. United Airlines jumped 10% and Delta rose 8%. Major cruise lines gained between 8% and 12%. Shares of Wynn Resorts rose 8%. Travel booking stocks Expedia and Booking Holdings rose 8%.”

This is a stock market ‘big finger’ at the alarmists out there and drug companies that nearly wanted Omicron to be another challenge for the world. Humanity can be crazy at times!

Thankfully, other influential medicos agree with Dr Walker, with White House Chief Medical Advisor Dr Anthony Fauci saying the initial data on the omicron variant is “encouraging.” 

“Clearly, in South Africa, omicron has a transmission advantage,” Fauci said. “Although it’s too early to make any definitive statements about it, thus far it does not look like there’s a great degree of severity to it.”

On CNN’s State of the Union on Sunday he added: “But we have really got to be careful before we make any determinations that [Omicron] is less severe or it really doesn’t cause any severe illness comparable to Delta.”

He was being wisely cautious with a slight leaning to the positive, which is a responsible approach.

Meanwhile in the EU, health officials say a total of 182 Omicron cases have been detected and all of them were either asymptomatic or mild in severity, with no deaths.

Once again, these sensible health experts are only cautiously optimistic and still have an open mind on Omicron.

Barrons.com looked at the work of SVB Leerink analyst, Dr Geoffrey Porges, in a note he published on Monday. Porges wrote that, so far, early evidence about the pathogenicity of the variant remains encouraging.  

“It appears that hospitalizations are not increasing at anything like the increase in the number of diagnoses” in South Africa. “All of this may not mean much – these observations are still very early in the latest wave of infections, and the pattern of disease could easily change with more time from the initial diagnosis of infection.”

Once again, this expert is cautiously optimistic but the stock market is excessively overreactive and very positive. But not so for Moderna, with its share price down 13% ahead of the close.

Moderna (MRNA)

One thing you should expect today is that our stock market will go up on this better news about Omicron. Let’s hope the news flow continues to the positive for health and wealth reasons!

On that subject, our Small and Micro Cap Virtual Investor Day is on tomorrow. This has unearthed some great small companies that have done well on the stock market. There are nine interesting companies and their CEOs will talk about their prospects and answer your questions!

Some of these companies will have more upside if this positive Omicron news continues.

Be sure to register here.

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