These are the financial dangers posed by the Delta variant

financial dangers posed by the delta variant

The delta variant of Covid-19, now in full swing, poses great dangers of all kinds, including financial ones. The high contagion capacity, as well as its power to reduce the effect of vaccines, raises concerns in all markets. Currently, the battered world economy is in a tense calm in the face of possible new containment measures.

The risks that the Sars-Cov-2 variant can bring can be varied with multiple ramifications. Both in commerce and finance, as well as in the portfolios of large and small investors, it is an actor to consider. However, this would be the worst and least likely scenario.

The mandates for the use of a mask, new distancing measures, mandatory vaccination for access to many sites. Added to this is the worrying slowdown in the vaccination rate. All this set of factors, keep the alarms on in the economy. What will happen to the investments of those people who have positions in the stock market? All of that remains to be seen. This paper looks at the context and gives some practical advice for investors.

The delta variant and the financial dangers it represents

The fact that the pandemic is reluctant to go away keeps the markets nervous. The variants, the most feared element, are already present with all the dangers they represent, both for public health and for financial markets.

The concerns of important analysts are that the delta and other variants increase the number of cases while the rate of vaccination decreases. In other words, thousands of people refuse to take the doses, which creates the conditions for the virus to continue reproducing and mutating.

In an attempt to encourage more people to dose themselves, the FDA fully licensed Pfizer’s vaccine. While the uncertainty continues, the dangers of a new advance of measures threaten to give a new scourge to the economy. It should be borne in mind that the high concern in the United States remains despite being the country with the highest number of vaccinated in the West.

What may happen in other countries where the delta variant also causes havoc would create great problems in a highly globalized economy. For example, China is going through one of its worst stages since 2020. This could threaten much of international trade should Beijing announce drastic containment measures.

In this way, the economic and financial dangers posed by the pandemic are further away than the markets want.

The economic recovery continues, but with latent dangers

An important aspect, especially in the United States, is that the recovery of the economy continues. However, the dangers of reversing positive rates are high. Some analysts believe that the worst is over. The latter is due to the fact that infections increase, but not the mortality rate.

It is a sense of security in the population, which has allowed GDP to grow by more than 6% in recent months. Likewise, the fall in unemployment, the slowdown in inflation and other symptoms that predict a good future stand out. But this does not mean that the financial dangers posed by the pandemic have gone down in history.

Despite this, it can be said that there are no reasons for panic when it comes to the market. The certainty of this statement is that the delta is not the first of the virus variants. In previous months other strains hit society, finding a solid economy.

For investors, it can be said that the need to make a massive sale is not latent. It should be noted that investments in the stock market, for example, are long-term. In that sense, the pandemic is reluctant to leave, but it is doomed to rise. Meanwhile, investments can be maintained.

This is how investors should prepare

Although staying calm is one of the best recipes in the current circumstances, that does not mean that you should lower your guard. The financial dangers posed by the delta variant, unlikely as they may seem, are still there.

In that case, investors should consider what could happen in the worst-case scenario. A new variant that hits with unexpected force would affect some businesses and not others. That way investors should focus on the seconds.

Consequently, a serious situation would hit tourism, transport, aviation, and other companies. On the other hand, it would regain momentum for technology firms. This should remind investors that technology companies are of great weight in the economy.

In a general overview, it can be said that the weakening of traditional companies cannot be interpreted as a weakness of the economy in general. This is because there are winners and losers in different circumstances. Again, the key is to be alert to the market’s reaction movements against the variant, without panicking.

The diversification of the investors’ portfolio and the continuous study of the technology companies with the greatest potential could make a difference.