As the Dow Jones Industrial Average posted its worst day since October of last year over pandemic fears, FOX Business has learned that top executives at the Big Banks are closely monitoring the spread of the coronavirus Delta variant and how it may impact plans to re-open offices particularly in large urban areas such as New York City.
People at banks such as JPMorgan, Morgan Stanley and Goldman Sachs say that so far they’ve made no changes to their re-opening plans. JPMorgan and Goldman have already told employees to begin to return to the office after about a year of at-home working during the worst of the pandemic. While Morgan Stanley has said it expects employees to return to the office after Labor Day.
|JPM||JPMORGAN CHASE & CO.||141.06||+2.13||+1.53%|
|GS||THE GOLDMAN SACHS GROUP INC.||369.95||+0.75||+0.20%|
Buoying hope for a return-to-normal has been expected as the efficacy of the new COVID-19 vaccines has been well telegraphed, but the spread of the more contagious Delta variant of the virus, and some mounting "breakthrough" cases of vaccinated people testing positive for the virus, has caused top bank officials to at least think about adjusting their plans for office work, people at these banks tell FOX Business.
Press officials for JPMorgan, Goldman Sachs and Morgan Stanley had no comment.
"The outlook for bank stocks has changed as a consequence of the new pandemic fears sweeping the nation," said veteran bank analyst Dick Bove of Odeon Capital Group "This may result in corporations not adjusting their activities meaningfully until this threat passes."
Of course, Wall Street represents just a portion of corporate America. Big companies have offered employees a variety of in-house and hybrid work routines as the pandemic begins to wane with some tech companies allowing their workforce to continue working from home, and others demanding that they return to the office a few days a week.
Moreover, the spread of the Delta variant may not represent a significant challenge to the health system, which was the purpose of initial business lockdowns and the imposition of working from home routines. Despite the recent surge in cases, COVID hospitalizations and deaths are still significantly below their peak in January.
The vast majority of the COVID hospitalizations from the Delta variant are among the unvaccinated. Nearly half the U.S. population is now vaccinated, and many others have a form of immunity because they were infected with the virus. The Biden Administration is promoting an even bigger push for vaccines, especially in rural communities.
But Wall Street CEOs and their senior staff are closely watching the spread of Delta and whether breakthrough cases could manifest into a larger health problem. U.S. stocks tumbled Monday with the S&P 500 and Nasdaq Composite posting the worst session since May, while the Dow’s 726 point drop was the worst of 2021. The selloff renewed fears of a resurgence of business shutdowns along the lines of the early days of the pandemic.
The shutdowns of business particularly in large urban areas such as New York City and Los Angeles, led to a short, but significant recession last year and trillions of dollars in fiscal and monetary support to prop up the US economy.
Wall Street executives interviewed by FOX Business say major firms are ready to delay re-openings if COVID hospitalizations and deaths begin to mount significantly.
"We are closely following what the CDC (Centers for Disease Control) is saying about the variants and we have no problem pivoting if we have to," said a senior executive at one big bank.