Clare LaPine Wibiralske – Global Corporate Citizenship
Dow Records Worst Drop of 2021 as New Coronavirus Variant Rattles Global Market – Written by Aaron Gregg on November 26, 2021
The DOW (Dow Jones Industrial Average) suffered the largest drop of the year on Friday, dropping 905.04 points. The news of the new coronavirus variant, Omicron concerns the future of the economy for many. Black Friday usually marks the start of the holiday shopping season but this year as the markets closed early for the holiday weekend, the Dow lost 2.5%, the S&P 500 was down 2.3%, and the Nasdaq lost nearly 2.2%.
The variant looks to be more infectious than the previous strains based on the preliminary evidence. Omicron first detected in South Africa has already been found in cases across Europe. The Biden Administration reinstated travel restrictions to eight countries after the markets closed on Friday to keep the virus out.
For investors in the stock market, this new variant brings back similar anxieties of the fallout of the Delta variant and they are more likely to be protective of the progress the market saw since then. Analysts report that because there is little information out on the new strain, investors fear for the worst that there could be a vaccine-resistant variant. This leads to investors leaving oil and commodities on the stock market for safer investments in gold and bonds.
Joe Biden on Tuesday authorized the use of strategic oil reserves to counter the high price of gasoline. However, as of Friday oil prices have fallen dramatically.
The repercussions are global as well. The European Stoxx 600 index dropped 3.7%, German Dax is down 4.2%, British FTSE lost 3.6%, while the Japanese Nikkei dropped 2.5% and Hong Kong Hang Seng Index is down almost 2.7%. Many countries have also reimplemented travel bans leading to more losses in stock of airlines and cruise companies.
Last week in class we talked about the Right to a Secure Job and the presence of unions in the workforce. Obviously, with a major loss in the stock market, there will be substantial losses in labor for the companies affected. Do you think there will be a future of job security regarding Covid related issues? How do you think this Omicron variant will affect the global economy moving forward?
I think that in the past unions were beneficial for workers’ rights regarding labor and safety but in terms of job security, there is not much that a union can do to enforce work if the company as a whole is suffering economically. At the beginning of Covid, there were government stimuli sent out but that is not a sustainable way to supplement work. I also think that the Omicron variant will not have as much of an effect on the global economy despite the major drop. The Delta variant was interesting because it was one of the first major variants detected but now with the vaccine and booster shots available people have adapted to live with Coronavirus so after more scientific research comes out I think the stock market will return to the upward trend from after the Delta variant.