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Should Investors Be Worried About The Delta Strain Of COVID-19?

June 22, 2021 1:25 pm
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Should Investors Be Worried About The Delta Strain Of COVID-19?

The SPDR S&P 500 ETF Trust (NYSE:SPY) is up another 13% so far in the first half of 2021 as investors anticipate a full economic reopening this summer following the COVID-19 pandemic.

Unfortunately, the new “delta” strain of the virus is reportedly spreading like wildfire. Bank of America analyst Geoff Meacham says investors are rightfully concerned about the potential for COVID-19 variants to derail the pandemic recovery — the keyword being "potential."

The Numbers: The delta COVID-19 strain is reportedly 64% more transmissible than the original strain of the virus, and it now accounts for about 10% of new U.S. cases, according to the most recent data from the Centers for Disease Control and Prevention.

While investors should continue to closely monitor new COVID-19 variants, Meacham said delta and other variants likely pose a limited threat to the global population. From an evolutionary standpoint, viral mutations are typically pressured more by transmissibility rather than pathology, Meacham said.

Related Link: Pfizer COVID-19 Vaccine Approved For 12-15 Age Group In New Zealand

Vaccine Efficacy: In addition, none of the three major COVID-19 variants have shown major resistance to existing vaccines, particularly the Pfizer Inc. (NYSE:PFE) vaccine. A U.K. study found the Pfizer vaccine is 88% effective in preventing symptomatic disease and 96% effective at preventing hospitalizations.

“Altogether these suggest we remain well-positioned in our efforts to combat the virus, which despite the potential of resurgent cases, shouldn’t meaningfully impede the progress for greater re-openings,” Meacham wrote in a note.

Benzinga’s Take: So far, the COVID-19 vaccines have proven to be extremely robust when it comes to mutant variants. Meacham said infection rates and vaccination rates have the U.S. on track to hit Bank of America’s long-standing herd immunity target of mid-2021.

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