Markets endured their worst day in a number of months on Friday as the week ended in a highly negative fashion. Equities, particularly in Europe, fell as investors flocked to safe haven assets. The VIX spiked over 50% in what was its 4th largest one day increase since 1990. The ‘Omicron’ COVID variant, first identified in South Africa, dominated market discussions late last week as fears of a new strain spread throughout Europe.
However, things calmed somewhat over the weekend with the consensus this morning being that the selling was overdone. Light trading volumes on Friday (with much of the US on a post-Thanksgiving day off) would have exacerbated the volatility and Europe has opened up today with US Futures pointing in the same direction. Whilst COVID concerns are to be ignored at your peril, the Omicron variant may not be as severe as first thought and it will be a number of weeks before there is a definitive data set regarding its potential impact.
Finally, spare a thought for Omicron Engineering, who are based in Norwich in the UK. Focussing on restoring the classic Lancia produced commercial vehicle, they have no doubt seen their website traffic peak over the weekend.