Stock Market: What Happened This Week?

The Devastating Impact of Covid-19's Newest Variant Yet

Micah Shin - Senior Correspondent, USA

6.00am, December 9, 2021

Deemed the "most mutated variant yet", Omicron variant of coronavirus was first identified in Africa. Within a few days, it had been labelled by the WHO (World Health Organisation) as a "variant of concern".

Following this barrage of shocking revelations, the stock market took a heavy hit on Tuesday, with the Dow Jones closing down at 652 points. On Friday, the S&P gave up 0.8% and the Nasdaq nearly 2%, driven by a jobs report miss, as well as Docusign's 42% plunge and the implications for the software sector. Moreover, concerns about this strain have led many to refrain from returning to in-person work. As a consequence, labor market recovery will be slowed and supply-chain bottlenecks will be prolonged. After suffering from their largest one-day drop since April 2020, oil prices increased due to the variant. Economic uncertainty ensued in the stock market because of this strain: trading was unstable earlier this week and the value of the U.S. dollar was undermined in favor of the Swiss franc and Japanese yen. In addition, energy, travel, and other economically sensitive stocks fell on Friday.

Nonetheless, technology and growth stocks that prospered during the stay-at-home orders (such as Netflix Inc (NFLX.O), Peloton (PTON.O) and Zoom Communications (ZM.O)) experienced a surge this week. One prime example is the ecommerce giant Amazon, which, due to its tremendous growth during the pandemic, is now expected to overtake UPS and FedEx to become largest delivery service in the United States. To increase efficiency, Amazon plans to have 30 fulfillment-and-delivery centers by the end of this year.

The pandemic has catalyzed profits for the company. In fact, Amazon has hired over 600,000 employees, doubled its shipping container capacity, and purchased nearly 90 aircrafts for delivery since the coronavirus outbreak. These accommodate the influx in sales and aid in accelerating the shipping process. During this year’s cyber Monday, customers spent $10.7 billion, a 1.4% decrease from previous years. Although 1.4% seems minute, this is the first time that slowdown in shopping has been tracked on a major shopping day. What does this mean for online shopping during the holiday season? Contrary to this slowdown, record-breaking ecommerce activity is expected during the month of December. Digital sales are anticipated to reach over $200 billion dollars from November 1 to the end of 2021 - a remarkable gain of 10%.