Beware knee-jerk reactions to Omicron, as there is so much we don’t yet know about the new COVID-19 variant

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

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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.