The rise of the Omicron COVID variant is affecting the stock markets positively and negatively. While Pfizer and Moderna stock shares specifically are increasing as more people are becoming vaccinated to lessen their chances of contracting the Omicron variant, crashes are happening in the market for various reasons.
Besides positively affecting the companies responsible for manufacturing the COVID vaccine, there have been crashes and other occurrences that have made the Omicron variant affect the stock market. Oil prices dropped to its lowest in November 2021 to less than $70 per barrel, which is the usually optimal price for industry profitability. This was a 13% decrease from its current price at the time of the report.
Bans on travel have been implemented for southern Africa because of the Omicron variant being detected in Botswana. American and British tourists are no longer visiting the area until the travel bans have been lifted. Despite the oil prices dropping and travel bans in Southern Africa, the presence of the Omicron variant is improving overall volatility in the stock market.
The economy has been able to rebound from the inflation that’s occurred due to lower supply of popular goods. This rebound is leading to an expected increase in the federal benchmark interest rate in 2022. Because Omicron is one of the causes of global inflation, businesses can expect to see decreased sales.
Trading stocks with CFDs
CFD stands for Contract for Difference. CFD shares allow you to trade stocks without actually owning the asset itself, which means you can use leverage to trade with more than your actual deposit. There is some risk involved with this leveraging ability because it magnifies losses as well as gains, but this is also a differentiator, as leverage is not available when purchasing shares normally via a share dealer. The ongoing pandemic has driven increasing numbers of people to start trading CFD shares, seeking to benefit from market fluctuations.
With CFD trading, you have the ability to speculate on the ups and downs of the underlying asset, which could be an individual stock, the value of an entire index, or other assets like currencies or commodities.
Two key features of trading CFD shares include the stop-loss function and the take-profit ability. You can choose to have your stocks undergo the stop-loss function, which means your stocks will sell-off and trade to keep your account safe if the stock’s value decreases to a certain point. The take-profit function performs the same task as the stop-loss function, but it allows your stock to sell when it has hit a profit after the stock has experienced an increase in value.
As the Omicron variant continues to affect the stock market positively for vaccination companies’ stocks and better sales for companies because of inflation, it is balancing the negative repercussions on the market. Consider utilising CFD shares to protect your portfolio and help you to better navigate the risks of staying in the market during these unpredictable times.
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