The omikron variant has really made its entrance in Norway after it was detected in South Africa on 23 November. After a period of high infection rates, it appears that infection rates in Norway are flattening out. That after the government introduced strict restrictions earlier this month.
Therefore, he is not worried
Characterizes the economy
However, the uncertainty surrounding the virus is affecting the world economy. Several thousand flights have been canceled over the Christmas weekend, and the stock markets have fluctuated very much. Before the weekend, Wall Street ended at a record level, but many fear that a major correction is just around the corner, if omikron really creates problems for the world’s industries.
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The excitement – and nervousness – is therefore great for how the markets will develop towards and after the New Year.
– It is clear that omikron will lead to weaker economic development in the coming months. Most countries in Europe have introduced stricter restrictions, which goes beyond restaurants and tourism, says chief strategist at Nordea Markets, Erik Bruce, to Børsen.
– Have only seen the beginning of the crisis
– The biggest concern
He also points to the omicron fear in the population, and a wave of infection on the rise in the United States, as unrest for the global economy.
In “Perfect storm” of a series of unfortunate events, combined with a pandemic leading to big waves in the world economy, has also led to a great shortage of goods and enormous transport problems.
– The biggest concern is whether we will see infection in Asia, and that it can exacerbate the problems we have in terms of deliveries, that companies and ports are closing down. It could exacerbate problems we already have, and lead to further price pressure, says Bruce.
Alarms about frightening development
Do not believe in decline
However, the economist does not see the market outlook completely in the future.
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– I do not think we will see a sharp decline in the market, because the earnings of companies through the pandemic, overall, have been good. The business community in general has had good earnings.
He believes the market will review that normalization after the pandemic has been postponed, and think that earnings will return.
– Nervous and volatile
Chief economist and head of analysis at Akershus Eiendom, Kari Due-Andresen, describes the market as “nervous and volatile”.
– We have seen quite large effects during a trading day. It seems that market participants are feeling ahead in terms of how much impact omikron will have on the economy around the world. We do not know that yet, says Due-Andresen to Børsen.
She thinks we will get an answer in the next few weeks on how long it will take, before we are in a more normal situation.
– Paint the devil on the wall
– A survey among international investors showed that inflation was the biggest concern, then there was the pandemic, then it was that the central bank in the US must tighten too much. All of these are legitimate concerns, says Due-Andresen.
The economist points out that the stock market has recently recovered very quickly, long before most people thought.
– Then we get a new “setback”. The question now is how much upside there is left. That’s what makes you a little hesitant now. The fact that the pricing is so high already, makes the market players nervous.
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– The biggest fear
Bruce points to inflation as a challenge. On December 17, the US Department of Labor announced that inflation in November was 6.8 percent – the highest growth in almost 40 years.
The US Federal Reserve is now in the process of phasing out crisis measures and has announced several interest rate hikes next year. Economists believe that the worst of inflation will be over by 2022, according to NTB.
– We see a very gradual tightening in the US and the UK. The central banks have accepted inflation and are tightening, but it will not be more than we can tolerate, I think, says Bruce.
– The biggest fear among investors is that the central banks will fall behind, and must tighten quickly to bring inflation down, he adds.
Bruce does not think the stock markets will do as well in the future as they have this year.
– You can probably not count on as strong growth as you have had this year. You will probably see days of decline more often, and not a steady rise as we have seen this year. But the outlook for the market in general is good.
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