Obligatory Omicron Update #4 (Sigh): Will The Omicron Variant Matter For Markets?

Omicron continues to dominate headlines though it isn't clear that it a lot of people are letting it dominate their lives.

To take only one poignant example, the number of flights, passengers and traffic this holiday period were approaching 2019 levels.

For another slightly crazier case in point, there is the fact that cruise bookings are now well above pre pandemic levels.

Despite a CDC recommendation to the contrary, Americans are clearly determined to travel to see family and loved ones. Or just spend a week stuffing themselves with shrimp at the all-you-can-eat-buffet as they slowly circumnavigate the Caribbean.

The world never ceases to amaze.

Unfortunately, however, that commitment to fun and sun or family time is being severely tested (see next segment) by the continued realities of the pandemic. Ignoring or dismissing the disease may be easy in the comfort of your own home but it isn't quite all margaritas and mistletoe if you step outdoors and try to #liveyourlife.

What has changed however is the nature of the problems and, also, Americans' adherence to - or lack of interest in - those realities.

Here is a single chart that best represents the state of affairs at the present time.

The data is from London via the excellent John Murdoch Brown at the Financial Times and suggests that total ICU hospitalizations are not only far less than last winter but tracking roughly with other winters as well:

John Murdoch Brown

That chart suggests the disease is not really adding to the total number of adult critical care beds being occupied in the United Kingdom's capital. For winter flu season + a pandemic that is pretty impressive.

This isn't the only positive data point either.

The 28-day average case fatality rate in South Africa, the likely origin of the Omicron variant, plunged in the past six weeks from 8% to 0.2%. For the first time, the argument of "it's just like the flu" is becoming true statistically.

So, as we have detailed before, the trends of fewer serious hospitalizations and dramatically fewer deaths per illness have continued.

This isn't to argue that either:

  1. The pandemic is over or

  2. That is no longer impacting our lives.

Quite the opposite. The pandemic rolls on and very brutally for many - especially those who remain unvaccinated, by choice or by lack of access.

But it is critical to keep the focus on the fact that Covid-19 has changed significantly. A disease that was deadly and reasonably contagious has become less lethal but far, far more communicable.

Add in the medical brilliance of vaccines and the risk profile of Covid-19 is no longer what it was.

And as the risks change, so should our priorities.

Such as:

  • The crucial need to keep schools open to try and halt learning loss or

  • The importance for many get regular medical check ups and screens is vital for the young and old And

  • Whether, as we and others have argued previously and as at least one mainstream commentator has suggested, Omicron could end up saving lives versus the other previously dominant and more deadly variants (Delta etc) of the disease.

These seem like important concepts to keep in mind both over and above basic case counts of Covid-19 and ginning up panic for a few more clicks.

The most significant fact about Covid-19 at this point might be that, for many vaccinated people, the biggest challenge is no longer the disease but rather than measures we have adopted to combat either earlier variants or other narratives.

These measures are coming up against the painful realities of Covid-19's mutability and our attachment to certain outmoded beliefs about how it works.

The virus makes fools of us all. So the only solution is to stay very flexible and open minded.

Nowhere is this better placed to illustrate this challenge than......


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