But what if the variant turns out not to be so bad for markets and the economy after all? That’s one view getting tentatively shopped around by some on Wall Street.
Much more data from scientists is clearly needed before any conclusions can be drawn. But some investors are highlighting the possibility that Omicron leads to milder illness than the Delta variant, which caused global cases to spike earlier this year. That could generate a positive outcome for stocks, they argue.
And he’s not alone in spotting a potential “upside.” A team of strategists at Goldman Sachs have examined four scenarios for the economy. One of them is based on the chance that “Omicron is slightly more transmissible but causes much less severe disease.” This could boost global growth as restrictions are eased and facilitate a quicker comedown in inflation.
The investment bank said it will not make any Omicron-related changes to its economic forecasts “until the likelihood of these scenarios has become somewhat clearer.” It also included two scenarios in which the effects of the Omicron variant are negative.
A big caveat: Wall Street analysts are not infectious disease specialists. Dr. Angelique Coetzee, chair of the South African Medical Association and one of the doctors treating patients with the Omicron variant, told CNN Tuesday that the majority of cases of the variant that she has seen have been mild, but it’s still early days.
But the range of calls peppering the investment community — buy, sell, do nothing — underscores the depth of uncertainty markets are now facing. That will make stocks exceptionally susceptible to news in the coming days and weeks.
“There is no world, I think, where [the effectiveness] is the same level . . . we had with [the] Delta [variant],” Stéphane Bancel said in an interview with the Financial Times published on Tuesday. “I think it’s going to be a material drop. I just don’t know how much because we need to wait for the data. But all the scientists I’ve talked to … are like, ‘This is not going to be good.'”
Jack Dorsey steps down as CEO of Twitter
Now, he’s stepping down. On Monday, the company announced that Dorsey — who co-founded Twitter — would leave his role, effective immediately, and hand the reins to Parag Agrawal, Twitter’s chief technology officer.
“I’ve decided to leave Twitter because I believe the company is ready to move on from its founders,” Dorsey said in a statement. “My trust in Parag as Twitter’s CEO is deep. His work over the past 10 years has been transformational. I’m deeply grateful for his skill, heart, and soul.”
Dorsey told employees that the decision to leave was his own, and was a “tough one.”
Remember: Dorsey returned to the chief executive role in 2015 to help turn around the social network’s business. During his tenure, Twitter achieved profitability, posted its first $1 billion quarter and began testing and releasing a wide range of features to draw in users.
But like its peers, Twitter has also had to confront the challenge of content moderation, as well as growing scrutiny from lawmakers and the public, my CNN Business colleague Brian Fung notes.
While much smaller than rivals like Facebook, Twitter has been central to debates over the responsibilities of social media platforms to curb hate speech, violent rhetoric and misinformation on their sites.
Dorsey has had to navigate these issues while also serving as CEO of Square, the payments company he co-founded. Activist hedge fund Elliott Management pushed for changes, including possibly removing Dorsey, as recently as last year, but he survived the bid for a shake-up.
Investor insight: Shares of Twitter gained more than 30% from the beginning of 2015 through Friday’s close. They finished Monday down 2.7%.
Facebook-owner Meta has been ordered to sell Giphy
The latest: The UK’s Competition and Markets Authority said on Tuesday that Meta’s control of the popular search engine for GIFs — short, looping videos and animations — would reduce competition between social media platforms and had already removed one potential rival in the advertising market, my CNN Business colleague Mark Thompson reports.
Facebook, as Meta was then known, bought Giphy, reportedly for $400 million, in 2020. It was intending to integrate the service with Instagram, making it easier for people to find relevant GIFs for their stories and direct messages.
In its announcement of the deal, Facebook had vowed to grant third parties the same level of access to Giphy’s content as before. Less than a month after the acquisition was announced, however, the CMA said it was looking into it.
In its initial findings published in August, the regulator said that Facebook’s control over Giphy could allow it to cut off other social media sites’ access to GIFs. Giphy’s services currently integrate with platforms such as Twitter, Snapchat, Apple’s iMessage and Slack.
Meta said Tuesday it disagreed with the CMA and was considering “all options, including appeal.”
Why it matters: Although far from the largest deal Meta has ever done, the Giphy acquisition is the company’s first high-profile deal that government officials have tried to unwind. Is this a harbinger of more aggressive action to come?
- US consumer confidence data for November posts at 10 a.m. ET.
- Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell testify before the Senate Banking Committee at 10 a.m. ET.
Coming tomorrow: Day two of Powell and Yellen’s testimony in front of Congress, this time before the House Financial Services Committee.