Daily Market Color November 26, 2021New Covid Variant Wreaks Havoc on Markets Treasuries rally and equities fall on new COVID variant. Global financial markets were spooked on the word of a newly discovered COVID variant out of South Africa. Treasuries had their strongest one-day rally since the onset of the pandemic in March 2020, as yields fell across the curve as investors sought safe-haven assets. The 10-year U.S. Treasury yield fell 15 bps on the short trading day to close at 1.49%. Equities fell with travel and leisure stocks leading the decline, as all three major equity indices closed in the red. Small caps took the brunt of the sell-off with the Russell 2000 dropping 3.7%, while the S&P had its worst one-day decline since February (-2.27%). World Health Organization (WHO) warns of COVID “variant of concern,” dubs it Omicron. WHO announced that the new variant has been “detected at faster rates than previous surges”, which has led to the belief that the variant could be more transmissible than previous COVID variants. WHO’s main cause of concern for the variant is the high number of mutations in the virus’ “spike protein”, which could ultimately be resistant to current vaccines. The variant has been detected in South Africa, Botswana, Hong Kong, and Israel. European nations have already applied travel restrictions on South Africa.