Milan Cacic
November 27, 2021
Money Economy Commentary Trending Weekly updateOUR “NU” VARIANT B.1.1.529!
Last night we received news of a new variant B.1.1.529 coming out of South Africa. The markets responded quickly this morning with the Dow dropping over 900 points and the price of oil dropping more than $10 per barrel.
Here is what have learned so far.
- The Variant contains more than 30 mutations to the spike protein (the component of the virus that binds to the cells] potentially making it more transmissible and resistant to the vaccine.
- The US, Canada, Europe and Asia have banned some flights from South Africa.
- Johnson & Johnson is already testing their vaccine against the new variant.
- Pfizer commented that if their vaccine is less effective against the new variant they could develop and produce a custom-made vaccine in under 100 days.
- The truth is we don't have much information yet. It should be noted that currently there is no proof that this variant is more contagious, lethal or resistant to the current vaccines. The uncertainty around all of these questions is why countries are moving with restrictions in such a rapid pace. I am sure this weekend we will be bombarded with new information and data that will give us a better idea to which direction we are headed. Having said that, even if we have to deal with a worst case scenario where the new variant is contagious and vaccines are less effective, then we should be able to apply what we've learned from our recent experience to lessen the negative effects on our economy. When it's worded like that it's starting to sound more like an endemic then a pandemic. On the upside, all the talk about inflation and high energy prices should come to an end. At least for a little while!
I have also included a piece from our CIBC Economics Team entitled “What’s NU on the Covid 19 Front”
If you have any questions please feel free to give us a call.
Have a great weekend and happy Thanksgiving to our American clients.
Milan