When the world decided that it would end the Covid pandemic status, the virus decided otherwise. In the U.S., the Omicron subvariant, XBB.1.5 is the dominant strain. This is the most contagious strain yet. Since higher transmissibility and lower mortality risks are prevailing thoughts, investors need to question that.
The perception that the subvariant is nothing to worry about will hurt vaccination rates. Last week, Moderna (MRNA) is reportedly pricing its vaccine at $130 per dose amid lower vaccine demand. Investors should expect Covid vaccine sales will stall.
Similarly, BioNTech SE (BNTX) stock stumbled from its over $180 Dec. 2022 high to close at $145. The stock is in deep value territory at a 3.4 times P/E.
Pfizer (PFE), which sells vaccines and antiviral drugs, also pulled back. Investors may consider holding PFE stock for a 3.43% dividend yield. Chances are high that healthcare systems need drugs and vaccines in the long-term fight against Covid.
China Re-Opens
On Jan. 8, China reopened its borders for the first time in three years. The country also ended its zero-covid policy. The people, vaccinated with an inferior local version, are getting infected. The disruption to global output matters. It could disrupt supply chains again, pressuring inflation and hurting stock markets.
Watch out for a near-term slowdown in China weighing on markets.
