The worst pandemic in over 100 years resulted in a 34% bear market in just 1 month, the fastest in US history.
Now the delta-variant is causing a 4th global wave of the virus, including in the US, and now Bank of America is warning that the US recovery might be at risk.
BofA economists Stephen Juneau and Anna Zhou wrote in a Friday note that the variant is likely to lead to a shift in consumer behavior going forward, citing a 351% surge in the moving average of daily cases since July 21.
Accompanied by slowing vaccination rates, they said they “believe the current surge in cases could lead to a sharp pullback in services spending.” – Business Insider
Here are the three things investors need to know about the global 4th wave, and how to protect your retirement portfolio from potential catastrophe.
1. What’s Causing This 4th Wave Of The Pandemic
The Delta-variant is the 4th major variant of concern out of over 160 varients geneticists have located thus far.
The virus has several mutations that some studies indicate are resulting in 1,200 times more viral particles being exhaled by infected individuals, compared to the original strain of COVID-19.
That doesn’t mean it’s 1,200X as infectious. Current studies indicate it’s about 230% more infectious than the original virus.
What that translates to is an R^0 of 5 to 8 compared to 1 to 2 for seasonal flu.
The CDC has called this one of the most contagious respiratory viruses ever discovered, and what it means is this.
Among unvaccinated people, each infected person can be expected to infect between 5 and 8 new people.
That’s why some countries are now locking down again, such as Australia, and LA is reinstating indoor mask mandates.
2. How Bad Could It Get
The bad news is that global cases are up 22% over the last 2 weeks, and in the US cases are up 170%.
The good news is that this is largely a pandemic among the unvaccinated. Studies show that fully vaccinated people are 33X less likely to get sick, and 200 times less likely to die.
However, in the US, half the population isn’t fully vaccinated, and globally the number is 75%.
The world is administering nearly 34 million doses per day, equaling 17 million fully vaccinated people, or the population of NY state, every 2 days.
For a virus that didn’t exist 2 years ago, what we’ve accomplished so far is a miracle of science and logistics.
However, the concern that scientists have is that the more the virus spreads, the more chances of a mutation that might get around the protection of vaccines.
Initial studies show the Pfizer vaccine is 88% protective against Delta, compared to 95% for the original strain.
However, the latest research from Israel indicates that the Pfizer vaccine has become only 39% protective. Fortunately, Pfizer is beginning trials next month for boosters that are specifically targeted against Delta.
Pfizer and Moderna say that mRNA technology can allow them to create new boosters in just 6 weeks.
The Biden Administration is changing its tune, now saying that boosters for 65+ and immunocompromised may be necessary and available in a few months.
Pfizer’s vaccine booster trials are expected to be complete by the end of the year meaning that by early 2022 the first boosters targeting Delta, and any other concerning variants, might be available.
In part two of this series, we’ll look at the likely effects on the world’s economy and the stock market, including how to protect your retirement portfolio from potential catastrophe.
SPY shares were trading at $439.62 per share on Tuesday morning, down $1.40 (-0.32%). Year-to-date, SPY has gained 18.35%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Adam Galas
Adam has spent years as a writer for The Motley Fool, Simply Safe Dividends, Seeking Alpha, and Dividend Sensei. His goal is to help people learn how to harness the power of dividend growth investing. Learn more about Adam’s background, along with links to his most recent articles. More...
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