Lesson One From the Omicron Drop: Markets Don’t Like Bad News

It would be nice to say that the Omicron fall-rebound-fall pattern holds a deep lesson on investor biases, the overextended state of the market or the tendency of the market to ignore obvious risks and then panic. At least, it would be nice for those of us writing market commentary.

Unfortunately, the explanation for the scale of Friday’s fall and Monday’s partial rebound is prosaic: Something potentially very bad happened, the discovery of a variant of Covid-19 that spreads fast and might be able to evade vaccines. And it happened in the middle of the Thanksgiving holiday, when much of Wall Street was away.