(Bloomberg) -- A fresh blast of the pandemic may be catching traders and investment strategists off guard.
As countries throughout Europe announce new restrictions going as far as full lockdowns, research notes outlining risks and opportunities for 2022 appear to completely ignore the virus. The word “lockdown” isn't even mentioned in year-ahead outlooks for Europe circulated by Goldman Sachs Group Inc. and Morgan Stanley.
Meanwhile, in a Bank of America Corp. survey this week, fund managers saw Covid-19 as only the fifth-biggest tail risk, with just 5% expressing concern about its potential impact on markets. Inflation, central bank rate hikes, stalling Chinese growth and asset bubbles topped the list.
In a 72-page report this week looking ahead to 2022, UBS Global Wealth Management says its central scenario is that the current wave of the pandemic “does not escalate to the extent that new lockdowns are required.” The report was published just a day before Austria's restrictions and warnings that Germany may have to follow suit.
Read More: Here's How Europe Is Reviving Lockdowns to Halt Covid Resurgence
European stock markets are also sanguine. While travel and leisure stocks dropped sharply on the news, the benchmark Europe Stoxx 600 index was down only as much as 0.6% on Friday, a far cry from the market panic caused by last year's lockdowns.
An HSBC note from October detailing what could go wrong in 2022 perhaps helps explain the relaxed reaction. A new wave of the pandemic need not be all bad news for markets because “signs of overheating demand may disappear, reducing concerns around stagflation and premature central bank tightening,” strategists led by Max Kettner wrote.
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