How Big of an Impact Will COVID-19 Have on the Stock Market Going Forward?

Even with the rise of the delta variant, the vaccines on the market in the U.S. developed by Moderna (NASDAQ:MRNA), Johnson & Johnson (NYSE:JNJ), and Pfizer (NYSE:PFE) with its partner BioNTech (NASDAQ:BNTX) appear to be providing effective protection against severe cases of COVID-19. If more individuals are vaccinated in the U.S. and other countries, there’s hope that the tide can be turned against the pandemic. 

In this Motley Fool Live video recorded on July 14, 2021, Motley Fool contributors Keith Speights and Brian Orelli answer a viewer’s question about how big of an effect COVID-19 might have on the overall stock market going forward.

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Keith Speights: Fourth Horseman asks: “How big an effect do you think the worldwide COVID situation has on market trends by the time the U.S. and maybe U.K. and Europe is vaccinated?”

Brian Orelli: We’re talking about the whole stock market?

Speights: That’s what it sounds like, yeah.

Orelli: Yeah, I don’t know. I think the stock market is forward-looking. By the time that we’re fully vaccinated, investors will be looking further ahead to when the whole world’s vaccinated.

My biggest concern with the rollout of the vaccination is that anytime you have a virus that’s going through people who aren’t vaccinated, that’s going to give it an opportunity to mutate and have a selection for a strain that’s even more virulent, one that can infect people more easily. That’s my biggest worry, is that although we may be fully vaccinated, we might get to a point where there’s enough mutations that now our vaccines don’t work.

Now, obviously, the vaccine companies are developing ones for variants, but can they keep up with the newest variants? It takes time for them to develop the newest version and get it tested.

That’s biggest worry: Can we keep up with the issues with the virus mutating faster than we can keep up with it? We really need to get everybody in the entire world vaccinated. The fact that the U.S. is vaccinated shouldn’t really give you much solace, because if the rest of the countries aren’t vaccinated, then our vaccines could eventually not work.

Speights: All we can do is guess here, but my hunch is that COVID-19 will become less of a factor for the overall stock market over the next year, two years, but it will still be a factor.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.