NOTIt is only Wednesday January 5, 2022, but the stock market investors have decided to take off the jacket and take out the swimsuits. The spring of business is already in sight. For them, all the clues agree, suggesting a near end to the health crisis that has plagued us for almost two years.
On the lookout for the slightest sign confirming their enthusiasm, analysts, budding epidemiologists, peel the WHO statements and note that the pest variant seems “Infect only the upper part of the respiratory tract”, avoiding severe pneumonia. In short, for stock market investors, who are trying to live with six months of lag compared to reality, even though there are more than 250,000 new cases of Covid-19 per day in France and one million in the United States , the “Covid peak” has been reached.
Contrast in Asia
As a result, since Monday the Paris Stock Exchange has continued to record historical records, with a CAC of 7,300 points, up 1.39% on Tuesday, January 4. Frankfurt grew by 0.82%, and London by 1.63%. Witness to this sudden euphoria, the values massacred by the pandemic are regaining favor, when the stars of 2020-2021 look gray.
Air France-KLM shares jumped on January 4 by more than 8% and that of the parent company of British Airways, IAG, by 11% while pharmacist Valneva collapsed by 23% when he will soon receive the authorization to market its anti-Covid vaccine. The same goes for the kings of videoconferencing (Zoom) or meal delivery (Just Eat Takeway). A climate smiling for the victims which also benefits the banks.
But will this stock market swallow make a sunny spring? Back with his family in Singapore, after a vacation in France, Robert Carnell, Asia analyst at ING bank, is worried about the contrast between Europe where the virus circulates widely but where the population is highly vaccinated with Asia, and particularly China. The latter, still faithful to its zero Covid strategy, has just closed a new city in an attempt to block the road to Omicron.
This will be all the more difficult as traditional vaccines are less effective than RNA products injected in Europe. This divergence, associated with the slow rise in rates started in the United States, 1.65% for the ten-year government loan against less than 1.50% last week, sows some seeds of concern. The final justice of the peace in the health of financial markets will be inflation, which promises to be the major economic subject of the new year. In the meantime, investors are doing what they can do best, dancing and dancing again, hoping to find a free chair when the music stops.