COVID cases rise but investors look past their temporary impacts
Economy

November 23, 2021
20 months into COVID and infections are still surging globally. But this time, consumers are carrying on with their Thanksgiving plans and investors are optimistic about their returns.
What’s the big deal? In the US, cases are rising in more than 30 states with the largest increases in the midwest and Northeast regions.
- Cases are still half of last November’s — but are near August levels.
- Europe is getting hit harder — with Austria becoming the first country to renter lockdowns after vaccines rolled out.
What does this mean? More uncertainty for travel. COVID cases put a stop to a short-term run in travel companies — which reported strong earnings in recent weeks:
- Airbnb (NASDAQ:ABNB) is up 39% since July — reporting its best quarter ever with sales up 70% from 2020 — and 36% higher than in 2019.
- Expedia (NASDAQ:EXPE), owner of Vrbo, an Airbnb competitor — is also up 25% since August after reporting strong earnings in early November.
Both stocks would’ve been higher if it weren’t for the recent wave bringing uncertainty to global travel. But strategists and fund managers are barely paying attention to the virus — seeing the rise in infections as temporary. JPMorgan strategists says it’s “unlikely to be a material, or sustained problem”.
Instead, the market is paying attention to… A world beyond COVID. On Friday, the FDA signed off on Pfizer and Moderna booster shots for all adults in the US.
And on Monday, the S&P 500 hit new highs as Biden named Jerome Powell — the man who navigated the market past COVID — for another 4-year term as Fed Chair.