Prepare for another volatile day on the markets. European bourses dropped around 1.3% this morning, and the U.S. is on track for something similar. The cause, of course, is Omicron.

Specifically, investors are taking fright at Moderna CEO Stéphane Bancel’s prediction that the new COVID-19 variant will require modifications to current vaccines, and that it could take months to get production of the modified vaccines happening at scale. “I think it’s going to be a material drop [in efficacy of current vaccines]. I just don’t know how much because we need to wait for the data. But all the scientists I’ve talked to…are like, ‘This is not going to be good’,” Bancel told the Financial Times.

A few things are worth noting here. First: Moderna chief medical officer Paul Burton said something similar on the weekend. Second: it has long been known that COVID-19 vaccines would at some point need to be tweaked to address new variants. Third: Pfizer and BioNTech have already been talking about getting a modified version of their mRNA vaccine out the door in around 100 days. (An “Omicron version” of Russia’s Sputnik vaccine could be “ready for mass-scale production in 45 days” the Russian Direct Investment Fund claims, for what it’s worth, though it also reckons the current version will do the job.)

In short, there’s not much new to go on here—what we’re seeing is extreme nervousness, based on the fact that there’s a lot we don’t know yet. We think Omicron will have a big effect on vaccine efficacy, because of its grotesque array of spike-protein mutations, but we don’t know how big. We think it’s more contagious than Delta, because of how fast it’s spreading in South Africa, but that’s a place with low vaccination rates and a young population, so we don’t know how much more contagious it would be in a heavily-vaccinated environment. We’re hearing that Omicron’s symptoms are relatively mild, but again, South Africa’s demographic profile makes it risky to draw conclusions.

Analysts are warning investors not to freak out too much about all this uncertainty, and they’re right, but on the other hand freaking out is a natural reaction—just a week ago, much of the world was talking about life after the pandemic, and now it’s clear that the pandemic has other ideas. Perhaps this is a necessary corrective to the irrational optimism that had taken hold, at a time when low vaccination rates in the developing world made new variants a near-term inevitability.

A heavy reaction to Omicron uncertainty can be seen in countries freezing travel from southern Africa. Here I must declare a personal interest: my family and I were supposed to be on a plane to Cape Town this coming Thursday, to see my mother and friends-back-home for the first time in two years. Thanks to Omicron, that’s not happening. We thankfully have our health, but it’s going to be a sad Christmas nonetheless. Still, from my vantage point in Germany, I completely get why the government here has declared South Africa a no-go area. It’s politically expedient and perhaps it might buy Germany (which is already experiencing infection rates that are more than double the previous peaks) some extra time before Omicron hits.

On the other hand, the World Health Organization, the Africa CDC and the South African government are all loudly saying the travel restrictions are punishing South Africa for having good science and identifying the variant—the first case of which was in Botswana—and that the restrictions won’t work. This is already painfully apparent, with community transmission of Omicron seeming likely in the U.K., Germany, and Portugal. Beyond a very brief benefit, red-listing countries is a failed strategy.

So in short, these times call for level heads, especially while we don’t have a full picture of what’s going on. Knee-jerk reactions may be human nature, but they can do real damage. This, I appreciate, is not news; you can find that below.

David Meyer
@superglaze
david.meyer@fortune.com

TOP NEWS

Parag Agrawal

Jack Dorsey has quit as Twitter CEO, saying the company is "ready to move on from its founders" (a swipe at someone, for sure). So meet the new boss: Parag Agrawal, who has been at Twitter for a decade, and its chief technology officer for four years. Fortune

Elizabeth Holmes

The trial of Elizabeth Holmes took a grim turn yesterday, when the Theranos founder said her former boyfriend and COO Ramesh Balwani (who is also facing fraud charges) repeatedly forced her to have sex with him. Financial Times

Meta blow

In the first example of Facebook owner Meta actually being told to break up, the U.K.'s Competition and Markets Authority has ordered the company to sell Giphy. The company formerly known as Facebook acquired the GIF-sharing platform in early 2020. According to the CMA, the deal reduced social-media competition. Meta may appeal. CNBC

Amazon vs unions

Amazon's victory against unionization at its Bessemer, Ala. warehouse turns out to have been a hollow one. The National Labor Relations Board has decided the election needs to be rerun, due to Amazon installing a mailbox in front of the facility—"a location where employees could reasonably believe they were being surveilled"—to collect ballots. Politico

AROUND THE WATER COOLER

Nadella shares

Microsoft CEO Satya Nadella told around 840,000 Microsoft shares—around half his holdings—"for personal financial planning and diversification reasons," according to the company. This could have something to do with a looming 7% long-term-capital-gains tax in Washington state. Wall Street Journal

Supply chains

The Federal Trade Commission is looking into potential anticompetitive behavior during the current supply-chain omnishambles, and has asked a bunch of companies to explain how they are handling the situation. The companies include Amazon, Procter & Gamble, Walmart, Kroger, Kraft Heinz and others. Wall Street Journal

Barbados vs colonialism

Barbados has become a republic, with Sandra Mason being sworn in as its first president. Until now, the Caribbean island's head of state was the British monarch. Barbadian poet Winston Farrell, speaking at the republican ceremony last night: "Some have grown up stupid under the Union Jack, lost in the castle of their skin…It is about us, rising out of the cane fields, reclaiming our history." Al Jazeera

Semiconductor independence

The EU will not become completely independent when it comes to chip production, the bloc's digital and competition chief has said. Margrethe Vestager: "The numbers I hear of…the upfront investments to be fully self-sufficient, that makes it not doable." CNBC

This edition of CEO Daily was edited by David Meyer.

The "Nadella shares" blurb was updated on Dec. 1 to correct the number of shares.