Travel stocks and sector-related exchange traded funds surged Monday, rebounding on hopes that the new Covid-19 Omicron variant is milder than previously feared.
Among the best performing non-leveraged ETFs of Monday, the U.S. Global Jets ETF (NYSEArca: JETS) advanced 5.3%, the AdvisorShares Hotel ETF (BEDZ) increased 4.0% and the SonicShares Airlines, Hotels, Cruise Lines ETF (NYSE Arca: TRYP) gained 3.6%.
Travel stocks were among the best performers among S&P 500 components. For example, on Monday, Norwegian Cruise Line (NCLH) was up 9.5%, United Airlines (UAL) was 8.3% higher, Royal Caribbean (RCL) added 8.2% and Carnival Corp (CCL) rose 8.1%.
“Omicron continues to be a concern, and while there’s still a lot more we don’t know than we do know about the latest strain, reports continue to suggest that despite the higher transmissibility, its impact has not been nearly as harsh,” Bespoke Investment Group, wrote in a note early Monday, Business Insider reports.
U.S. chief medical adviser Anthony Fauci told CNN that there didn’t appear to be a “great deal of severity” to Omicron, the Wall Street Journal reports.
Meanwhile, regulators stated that the Food and Drug Administration will streamline authorization for a readjusted vaccine to fight off the Omicron variant.
“It seems like this is not going to lead to the worst-case scenario. I wonder if we’re being complacent, but the early indicators suggest we’re not,” Fahad Kamal, chief investment officer at Kleinwort Hambros, told the WSJ.
U.S. markets have experienced wild oscillations as the spread of the relatively unknown Omicron variant fueled fears of another resurgence in coronavirus cases, along with continued global lockdown measures that would impede the economic recovery. However, concerns were somewhat eased after South African health officials said the strain caused mild infections.
“Last week’s losses are likely to be taken back this week if people see that Omicron isn’t as deadly as previous mutations,” Stuart Cole, head macroeconomist at Equiti Capital, told Reuters.
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