Lockdowns and travel restrictions highlight the economic damage Omicron has done to the whole European Economy. Corporate resilience will be severely tested – whatever governments decide. The likelihood of stagflation has risen, but markets are likely to benefit from buy-the-dip mentality as investors weigh-up renewed government support if/when it turns nasty!
The Omicron Variant dominates the headlines, but will likely prove a short-term market factor. No doubt a renewed round of panicked responses, lockdowns, travel bans and Christmas threats will occur, but markets should take these in their stride – the biggest risk is margin calls triggering something deeper.
The weather on the Pacific Northwest has turned ugly, as might the financial weather if the current degree of market complacency proves unfounded!