For a market rally to take shape, there should be some positive news on multiple fronts. One of which would be the Omicron variant which has caused volatility for the markets for much of the beginning of 2022.
The Omicron variant is one of the most concerning to date due to its transmissibility. However, South Africa, one of the first countries to deal with an Omicron spike, has reported that cases peaked very quickly. There are also positive signs that northeastern states like New York and New Jersey are starting to see cases and hospitalizations drop. If the country sees a peak within a couple of weeks that would be good news but, the virus could always throw a curveball.
Another new development is the FDA approval for two at-home pills that reduce the chances of being hospitalized and dying from Covid. While these pills will not be widely distributed first, we can expect that thousands will be available, and production will ramp up. If these pills are utilized correctly, it could seriously reduce strains on hospitals. At first, I wouldn’t expect it to be a miracle cure for stopping anyone from dying or going to the hospital. However, once mass distribution begins, I would hope to see the effects in February or March of 2022.
It appears that testing for the virus has continued to be challenging. The Biden administration, local governments, and testing companies must continue to collaborate to provide more accessibility to testing. If we can get continued evidence that tests will be distributed better by the end of January, that would at least reassure investors that the people know they are infected and slow the continued spread of the virus.