What does the Omicron-related uncertainty mean for investors?
- Regeneron and Moderna expect their COVID treatments to be less effective against Omicron.
- Jim Cramer says the uncertainty around effectiveness of vaccines points to a slowdown.
- Dory Wiley picks three sectors where the recent sell-off created a great buying opportuninty.
The benchmark S&P 500 index is down more than 1.0% this morning on fears the existing COVID-19 vaccines and treatments will be less effective against Omicron.
Things aren’t looking good for Regeneron and Moderna
Investors are responding to comments from Moderna CEO Stephane Bancel, who said the biotech firm expects its vaccine to lose efficacy against the new variant of concern. Regeneron Pharmaceuticals also made a similar announcement about its antibody cocktail for COVID-19 on Tuesday.
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According to Jim Cramer, uncertainty around efficacy of the existing treatments points to a slowdown. On CNBC’s “Squawk on the Street”, he said:
Bancel told the Financial Times that a material drop in effectiveness is likely. Meanwhile, Pfizer hasn’t changed its view. But Regeneron did. So, I say the uncertainty means slowdown. It doesn’t mean the end; it means that we’re back in slowdown mode.
How to play the ongoing market uncertainty
In a separate interview on CNBC’s “Worldwide Exchange”, Dory Wiley of Commerce Street Capital agreed that the market hates uncertainty but said the associated sell-off created great buying opportunities.
When we get dips like this on fear, it’s a great time to buy energy. It’s a great time to buy banks, which have been trading at a discount to the rest of the market, particularly those with some fintech upside. It’s a great time to buy consumer staples where you can get some really good yield.
He reminded that the general consensus is for oil prices to recover from here that makes the energy space even more fascinating at current levels.