Billionaire investor Bill Ackman says it’s bullish for stocks if Omicron variant symptoms are mild

Bill Ackman Pershing Square
Bill Ackman is a billionaire investor and hedge fund manager. Elsa/Getty Images
  • Billionaire investor Bill Ackman has said it’s bullish for stocks if Omicron symptoms turn out to be mild.
  • A doctor in South Africa said the symptoms she’s seen so far from the new COVID-19 variant have not been serious.
  • Stocks rose Monday after Friday’s sharp sell-off, as investors tried to gauge the potential impact on the global economy.

Billionaire investor and hedge fund boss Bill Ackman has said it’s bullish for stocks if the Omicron COVID-19 variant turns out to cause mild symptoms – but bearish for the bond market.

“While it is too early to have definitive data, early reported data suggest that the Omicron virus causes ‘mild to moderate’ symptoms (less severity) and is more transmissible. If this turns out to be true, this is bullish not bearish for markets,” Ackman tweeted on Sunday evening.

He then added: “I should have said: bullish for the equity market, bearish for the bond market.”

Ackman is the founder and CEO of the hedge fund Pershing Square, and made more than $US2 ($AU3) billion through savvy trading at the time of the first coronavirus-driven market sell-off in March 2020.

Investors around the world are trying to gauge the possible economic impact of Omicron, a highly mutated COVID-19 variant recently identified in southern Africa that is spreading globally.

Stocks plunged on Friday, with the S&P 500 dropping 2.27% in its worst day since February.

Yet US futures rose on Monday as traders waited for more information about Omicron, which scientists are racing to analyze.

According to reports over the weekend, a doctor in South Africa, who was among the first to raise the alarm about a new variant, has said the symptoms she has seen in patients so far have been very mild.

However, the World Health Organization said in a statement Sunday: “It is not yet clear whether infection with Omicron causes more severe disease compared to infections with other variants, including Delta … ​​More information will emerge in the coming days and weeks.”

Ackman made a profit of more than $US2 ($AU3) billion in about a month as the coronavirus pandemic first shook markets in March 2020, in a series of bearish trades, after calling into CNBC and warning that “hell is coming.”

He then plowed some of the money back into stocks at cheap prices, setting him up for another big win after equities soared on the back of huge stimulus packages.

In the face of Omicron, traders are now expecting central banks around the world to be more reluctant to withdraw their support for economies. That is one factor supporting stocks Monday, alongside the tendency of investors to “buy the dip.”

Lars Kreckel, global equity strategist at investment company LGIM, said: “Our initial line of thinking is that market weakness around a new variant … creates an opportunity to increase risk in portfolios.”

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