COVID Delta Hits Markets

Dear Rich Lifer,

The economy is booming, restrictions are easing, travel is returning, and vaccinations are protecting Americans from coronavirus.

All of these factors seem to point toward a coronavirus-free future. But we aren’t out of the woods yet.

The U.S. didn’t hit President Biden’s target of 70% vaccination by July 4. And while some individual states have hit this mark, overall vaccination rates are sharply declining. 

In addition, the rapidly spreading and highly contagious Delta variant is running rampant throughout the globe. 

These factors are taking a huge toll on the health — physically and financially — of Americans and leading to many questions about booster shots, vaccine efficacy, and the future of the markets.

Today we will attempt to answer some of your most pressing questions and bring you the most up-to-date information so that you can be prepared for the next wave of the virus. 

Booster Questions Answered

The Delta variant has fueled a surge of Covid-19 cases in the U.S. NPR reported that this new variant is 225% more transmissible than the original SARS-CoV-2 strains. 

Because of this, rates of infection have increased 145% from a month prior, according to data from Johns Hopkins University. 

The best thing to do to protect yourself from the virus is to get vaccinated; Dr. Rochelle Walensky, director of the US Centers for Disease Control and Prevention, recently stated that 97% of people currently being hospitalized with Covid-19 are unvaccinated. 

However, vaccinated people are still getting Covid, which is leading many to begin talking about booster shots to maintain the efficacy of the vaccine. 

Let’s look at some of the questions circulating about booster shots…

Do I Need A Booster Shot?

Long story short, you will likely need one eventually, but when exactly is still being studied. Some vaccines are designed to last for life, like the measles vaccine. Other vaccines need boosters, like the vaccine for tetanus. 

Most research indicated that the Covid-19 vaccine efficacy will decrease over time. Anthony Fauci, director of the National Institute of Allergy and Infectious Disease, stated, “Historically, at least with the coronaviruses, the mild common cold coronaviruses, the durability of the protection from infection isn’t very long.”

Recently Pfizer released data that showed its vaccine remained 90% effective six months after the second dose. 

Unfortunately, we do not yet know exactly when a booster will be needed. However, U.S. Surgeon General Dr. Vivek Murthy said Americans should “be prepared for the fact that we may need a booster within a year.”

Should I Get A Booster From the Same Brand? 

In June, NIAID, which is part of the National Institutes of Health, began studying whether mixing and matching vaccines and boosters could prolong immunity and better protect against variants.

The study has not released an outcome, but the goal is to determine the best combination of mixing initial doses and boosters for peak efficacy. Stay tuned for more info on this.

Will the Booster Protect Against Variants? 

While research shows that the current vaccines provide protection from the new variants, they may not work as strongly against them as they did against earlier strains. This is one reason why boosters may prove to be important for protection against new and emerging strains.

Pfizer, Moderna, and Johnson & Johnson are all looking into the potential for boosters. 

Additionally, the biotechnology company Novavax has developed a coronavirus vaccine that could be used as a booster shot for people who have already been vaccinated. The company plans to apply for emergency use authorization in the third quarter of 2021. 

Who Will OK the Boosters?

The decision to use Covid-19 boosters will likely involve two agencies — the FDA and the CDC. The approval process will depend on whether the booster is simply another dose of the same vaccine or a new vaccine entirely. 

Dr. William Moss, professor and executive director of the International Vaccine Access Center at Johns Hopkins Bloomberg School of Public Health, stated, “Technically, whenever a vaccine like that is modified, it’s often considered a new vaccine and has to go through the whole process again. But there is a precedent, obviously, with influenza virus vaccines, not to do that. So, the influenza vaccine each year doesn’t have to go through a large Phase 3 trial.”

This is because the vaccine technology remains the same; the only change is the flu virus itself, which is targeted by the vaccine to obtain immunity to a specific flu virus strain that’s circulating.

Right now, vaccine developers are encouraged to before studies on modified vaccines to increase immune response. 

Now that we have reviewed the basic updates about boosters, let’s talk about something else that might be in need of a boost… the economy. 

Markets React to Covid Spikes   

Mounting anxiety about rising Covid-19 rates and the Delta variant are starting to have their effects on the stock market. 

On Monday, stocks, oil prices and government-bond yields all slid in anticipation of the potential impact of the Delta variant on the global economy. 

The S&P 500 fell 1.6%, and the Nasdaq Composite declined 1.1%. Markets in Europe and Asia also declined due to Covid-19 fears.

Investors searched for security by purchasing bonds, which resulted in the yield on 10-year Treasury notes falling to 1.181% — the lowest level since February. As a reminder, bond yields fall when bond prices climb.

This shift reminded experts of trading patterns in the early days of the pandemic when investors sold shares of companies that were affected by lockdowns and instead opted to buy safer government bonds and stocks that would not be affected by renewed restrictions. 

Candice Bangsund, a portfolio manager at Fiera Capital, stated, “The emergence of this more highly transmissible Delta variant […] has brought into the question the sustainability of this reopening and the recovery.”

Despite Covid fears, Ms. Bangsund maintained that another wave of infections could derail economic activity but wouldn’t derail the economy to the extent we saw last March. 

This week, investors should keep a close eye on corporate earnings for more signs of the health of the economy. Hundreds of companies are set to release reports this week, including Chiptole, Netflix and United Airlines. 

To a Richer Life,

The Rich Life Roadmap Team 

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