Goldman is cautious:
With Omicron uncertainty continuing to weigh heavily on markets amid an already sharp pickup in COVID cases, we assess the risks the new variant presents to global (andEuro area and UK) growth. We estimate that a downside scenario in which the variant transmits more quickly and evades immunity against infection more than Delta, but leads to only slightly higher hospitalizations than Delta, would tighten our Effective Lockdown Index (ELI) to a similar degree as the Delta wave, as shown inour chart of the week, which would be sufficient to slow global growth to a 2% qoq ann. pace in 1Q22, or 2.5pp below our current forecast. But we estimate an ambiguous inflation impact in this scenario, as global services and energy inflation would likely be lower, due to weaker demand, and goods inflation higher, as a resultof weaker supply. That said, both more extreme downside and upside scenarios are possible, and we caution that the range of medical and economic outcomes remains unusually wide at the moment given the remaining unknowns around the transmissibility, degree of protection from vaccines and prior infections, and disease severity of Omicron
JPM is bullish but then it always is:
