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D-PIMS Weekly Market Update - Week of 27th December 2021 to 2nd January 2022

Today’s weekly update:

Over the course of last week, shortened by public holidays, market moving headlines were mostly Covid-19 related:

• Daily COVID-19 infections have hit record highs in the United States along with swathes of Europe and Australia, as the new Omicron variant of the virus races out of control, keeping workers at home and overwhelming testing centres. Almost two years after China first reported a cluster of "viral pneumonia" cases in the city of Wuhan, the regularly mutating Coronavirus is wreaking havoc in many parts of the world, forcing governments to rethink quarantine and test rules. Although some studies have suggested the Omicron variant is less deadly than some of its predecessors, the huge numbers of people testing positive mean that hospitals in some countries might soon be overwhelmed, while businesses might struggle to carry on operating because of workers having to quarantine. France, Britain, Italy, Spain, Portugal, Greece and Malta all registered a record number of new cases on Tuesday.

• Prime Minister Boris Johnson warned on Wednesday that the overwhelming majority of patients ending up in intensive care with COVID-19 had not received their booster vaccine, as he urged people to get their jabs.
Johnson, on a visit to a vaccine centre, "I'm sorry to say this, but the overwhelming majority of people who are currently ending up in intensive care in our hospitals are people who are not boosted," he said. "I've talked to doctors who say the numbers are running up to 90% of people in intensive care."

• A key part of the immune system's second-line defence - its T cells - are highly effective at recognizing and attacking the Omicron variant, thereby preventing most infections from progressing to critical illness, a new study shows. Omicron's mutations help it escape from antibodies, the body's first line of defence against infection. Researchers have speculated that other components of the immune response would still target Omicron, but there has been no proof until now. In test tube experiments, researchers in South Africa exposed copies of the virus to T cells from volunteers who had received vaccines from Johnson & Johnson or Pfizer, or who had not been vaccinated but had developed their own T cells after infection with an earlier version of the Coronavirus."Despite Omicron's extensive mutations and reduced susceptibility to neutralizing antibodies, the majority of T cell response, induced by vaccination or natural infection, cross-recognizes the variant," the researchers reported. "Well-preserved T cell immunity to Omicron is likely to contribute to protection from severe COVID-19," which supports what South African doctors had initially suspected when most patients with Omicron infections did not become seriously ill, they said.

• Britain's medicines regulator on Friday approved Pfizer Inc's COVID-19 pill, Paxlovid, for treating people over the age of 18 years with mild to moderate illness who are at high risk of developing severe COVID-19.

• Over the week, the main Global Stockmarkets up, although less so, after taking the strengthening Pound into account. Bond returns were down for a second week. Over the week, all the D-PIMS Portfolios up, especially the higher risk Portfolios. The Portfolios were helped by their diversity and their low weightings to Bonds.
 

 

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The comments made above represent our interpretation of events and market views and are in no way a guarantee of future investment performance.

 

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