(Yahoo!Finance) - What COVID-19 'on our terms' means for the market, and everyone else.
Another day, another shattered record of COVID-19 infections in the United States — and yet another set of new milestones in the Dow (^DJI) and S&P 500 (^GSPC), as Santa Claus continues to bestow gifts on Wall Street.
One of the aforementioned records is most assuredly not like the other. But you better believe they’re inextricably bound to one another by the COVID pandemic, and what prices appear to be telegraphing about what comes next as the Omicron variant cascades across the globe.
And it all has to do with one concept: endemicity — a fancy epidemiological word that basically means COVID is becoming part of our everyday lives. Once enough people have contracted it, the virus will become something to which we'll have to adjust our behavior without disrupting routines (sort of like the weather), but managed by vaccines and treatments.
“Despite global surges in COVID cases, the markets are reflecting the new reality that COVID is here to stay albeit more on our terms than its,” Kevin Philip, managing director at Bel Air Investment Advisors, a high-net-worth wealth management firm with over $8 billion in assets, said on Wednesday.
“With vaccines, boosters, treatments, and rising herd immunity, it seems more and more like a manageable virus in line with colds and flus than what it originally was,” he added.
There’s a lively debate surrounding whether the virus yet qualifies as endemic, given that there are still lots of people (yours truly included) that haven’t actually caught it.
However, the concept lies at the heart of the Centers for Disease Control’s increasingly polarizing decision to cut the quarantine time of asymptomatic or mildly symptomatic individuals. The seemingly arbitrary edict sparked an outpouring of confusion, backlash and social media snark aplenty.
The difference between "pandemic" and "endemic" is largely academic. But the practical import means that businesses, governments and individuals are already adapting to a post-pandemic mentality — which is to say, adjusting routines to suit current circumstances, especially because Omicron appears less lethal than its predecessors.
Professional sports leagues like hockey and football are moving to relax their COVID-19 protocols, operating under the assumption that the virus is here to stay, and that individuals who aren’t deathly ill should be allowed to do their jobs. NBA Commissioner Adam Silver raised eyebrows recently when he rejected the notion that the season would shut down because of the Omicron wave.
"As we look through these cases literally ripping through the country, let alone the rest of the world, I think we're finding ourselves where we sort of knew we were going to get to over the past several months, and that is this virus will not be eradicated, and we're going to have to learn to live with it. I think that's what we're experiencing in the league right now,” Silver told ESPN last week.
Silver, of course, is 100% correct. “Learn to live” is a theme we’ve been hammering more frequently in the Morning Brief, and explains why stocks hit fresh highs on Wednesday, and why New York — once a global epicenter of COVID-19 that just set a record for new infections — is still chugging along with no immediate hints of a lockdown.
In fact, even President Joe Biden has gone out of his way to assuage nervous citizens that a repeat of 2020’s restrictions are not in the cards. Nor should they be.
It’s still an open question how much longer the patchwork of anti-COVID regimes that have exacerbated labor and supply shortages will survive the next phase of the outbreak, something the Morning Brief has made clear is simply not effective for a host of reasons.
However, it’s clear that vaccine mandates and some restrictions on public life still have ample support among physicians, at least for the moment.
In an interview with Yahoo Finance Live, New York City-based emergency medicine physician Dr. Manish Garg cited a “dual wave” of both Omicron and Delta mutations that are expected to drive up hospitalizations and deaths, (both of which, it should be noted, are well below pandemic-era peaks).
With that as a backdrop, Garg compared COVID-19 protocols to a “traffic light” where in areas where hospital capacity is at or near a high, it makes sense to temporarily enforce a “pause” on certain activities.
“I think with international travel, vaccine passports is probably a good strategy… I know that [angers] a lot of folks who are very critical of any type of freedom challenge but I think it is better for us from a public health standpoint that we’re protecting our people and we’re protecting international society,” Garg said.
By Javier E. David
Editor focused on markets and the economy
