The Delta Variant Is Shaking Up the Stock Market -- Barrons.com
DOW JONES & COMPANY, INC. 8:49 AM ET 7/19/2021
Symbol Last Price Change
TM 178.13down 0 (0%)
QUOTES AS OF 04:10:00 PM ET 07/16/2021
Josh Nathan-Kazis
After a springtime reprieve from the pandemic in the U.S., cases of Covid-19 are rising again, and grim data points from around the world are shaking investors' faith in a global recovery.
Over the weekend, news of positive tests of Olympic athletes, who have now gathered in Tokyo for the games set to begin there at the end of the week, raised concerns about the advisability of the entire event.
Meanwhile, new cases of the virus are up 34% globally over the past two weeks, according to the New York Times. In the U.S., the number of new daily cases remains low, relative to other points in the pandemic, but is up 140% over the past two weeks.
Markets shuddered early Monday, with futures on the Dow Jones Industrial Average down 1%, S&P 500 futures down 0.8% , and Nasdaq Composite futures down 0.6%.
"The summer COVID wave is gaining speed as the country seems to have forgotten we're still in the midst of a pandemic," Evercore ISI analyst Josh Schimmer wrote in a note out on Sunday.
Speaking on CBS's Face the Nation on Sunday, former U.S. Food and Drug Administration commissioner Dr. Scott Gottlieb, who now serves on the board of Pfizer , said that the current wave of the virus is likely far worse in the U.S. than the numbers show.
"I think at this point, we're probably undercounting how many infections are in the United States right now, because to the extent that a lot of the infections are occurring in younger and healthier people who might be getting mild illness, they're ...probably not presenting to get tested," Gottlieb said. "To the extent that there are some breakthrough cases either asymptomatic or mildly symptomatic cases and those who have been vaccinated, they're not presenting to get tested because if you've been vaccinated, you don't think that you have the coronavirus, even if you develop a mild illness."
The current surge in cases in the U.S. is driven by the spread of the Delta variant, a highly contagious new form of the virus. The Centers for Disease Control and Prevention estimates that the Delta variant accounted for nearly 60% of infections in the U.S. in the two weeks ending July 3.
Speaking at the White House on Friday, CDC director Dr. Rochelle Walensky said that the number of new cases per day was up 70% in just a week. Hospitalization and death rates were also climbing, though not as fast.
"We are seeing outbreaks of cases in parts of the country that have low vaccination coverage because unvaccinated people are at risk," Walensky said. "And communities that are fully vaccinated are generally faring well."
Meanwhile, athletes from all over the world are gathering in Tokyo for the Olympic Games, with the opening ceremony scheduled for Friday. Over the weekend, American tennis player Coco Gauff announced that she had tested positive for Covid-19, and would not play in the Olympic Games. On Sunday, two South African soccer players tested positive, as did six British track and field athletes.
The Games are increasingly unpopular in Japan. On Monday, Toyota Motor(TM) said it would not air any commercials related to the Olympics, and that its executives would not attend the opening ceremonies, according to Reuters.
Meanwhile, England lifted Covid-19 restrictions on Monday, even as cases there are rising quickly. The U.K.'s prime minister, Boris Johnson, was forced to self-isolate after a minister tested positive for Covid-19.
At the White House briefing on Friday, the CDC's Walensky said that restrictions across the U.S. should depend on the local situation.
"If you have areas of low vaccination and high case rates, then I would say local policy makers might consider whether masking at that point would be something that would be helpful for their community until they scale up their vaccination rates because more people than not in the community are unvaccinated," Walenksy said.
Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com
