The news shaping the markets today

Russian military forces are pouring in several fighters to build pressure on the eastern Ukrainian city of Bakhmut. The US dollar index, which measures the greenback’s performance versus a basket of major currencies, rose this morning.

China’s general manufacturing PMI improved to 49.2 in January, from a three-month low of 49.0 in December, lending support to the CNY/USD forex pair.

Australia’s manufacturing PMI fell to 50 in January, versus a final reading of 50.2 a month ago, which sent the AUD/USD pair lower in forex trading this morning.

Japan’s au Jibun Bank manufacturing PMI came in-line with expectations at 48.9 in January, lending support to the JPY/USD forex pair.

New Zealand’s unemployment rate rose to 3.4% in the fourth quarter, from 3.3% in the previous quarter. The latest reading also came in above expectations of 3.3% and sent the NZD/USD pair lower in forex trading this morning.

What’s happening: Shares of Pfizer edged higher on Tuesday after the company released its fourth-quarter results.

What happened: The vaccine maker’s sales surpassed the $100 billion mark for the first time last year.

However, Pfizer warned of a higher-than-expected decline in covid-19 vaccine and treatment sales for the current year.

How were the results: The New York-based company reported strong growth in earnings for the latest quarter, which also exceeded market views.

• Revenues rose 2% to $24.29 billion, surpassing Wall Street expectations of $24.32 billion.
• Adjusted earnings climbed 45% year-over-year to $1.14 per share, above the consensus estimates of $1.05 per share.

Why it matters: Pfizer had reported a strong rise in revenues last year, driven by the surging sales of its covid-10 vaccine, which the company developed in collaboration with Germany’s BioNTech. However, the easing of covid-19 infections has resulted in a decline in vaccine sales.

The company is looking to begin selling its vaccine through commercial channels in the US during the second half of 2023, instead of selling directly to the government. The company sees its US vaccine price increasing almost four times after that move and expects covid revenues to grow in 2024.

For fiscal 2022, Pfizer reported all-time high revenues of $100.3 billion, representing 30% operational growth.

However, management guided to a decline in sales in fiscal 2023 to $67-$71 billion, much lower than the consensus estimates of $74.13 billion. The company also projected adjusted earnings of $3.25-$3.45 per share for the year, versus $6.58 per share in 2022 and market expectations of $4.44 per share.

Pfizer sees sales of $13.5 billion from its covid-19 vaccine and expects sales of $8 billion from its antiviral pill, Paxlovid, compared to vaccine sales of $37.81 billion and Paxlovid sales of $18.93 billion in 2022.

How shares responded: Pfizer’s shares rose 1.4% to close at $44.16 on Tuesday, following the release of quarterly results. The stock has lost around 14% over the past month.

What to watch: Investors will continue monitoring Pfizer’s growth plans, with the company preparing to launch 19 new products over the next 18 months to compensate for the decline in covid vaccine sales and the loss of patent protections for some key drugs. The company has also acquired Biohaven to boost its product pipeline.

The markets today

Crude oil will be in focus today ahead of the EIA’s report on stockpiles and the Fed’s rate decision

Context: US crude oil futures settled higher on Tuesday, rebounding from around a three-week low.

Details: US crude oil futures dipped to almost a three-week low in early trading on Tuesday amid signs of strong Russian exports. India and China have continued purchasing oil from Russia at a discount, despite sanctions and price caps from Western nations.

Traders continued monitoring comments by major central banks, including the Fed, Bank of England and European Central Bank, all of which are scheduled to announce their interest rate decisions this week. The Federal Open Market Committee started its two-day policy meeting on Tuesday and is due to announce its interest rate decision today. The Fed is widely expected to announce an interest rate hike of 25 bps.

The reopening of China provided some support to oil markets, with the latest data showing a sharp rebound in manufacturing and services activity in the country in January.

The American Petroleum Institute said late Tuesday that crude oil stockpiles in the US had risen by 6.330 million barrels in the week ended January 27, after an increase of 3.378 million barrels in the prior week.

WTI crude oil for March delivery gained 97 cents to $78.87 per barrel, while Brent crude for March delivery fell 41 cents to $84.49 per barrel.

In other energy trading, wholesale gasoline for February delivery gained 4 cents to $2.54 a gallon, while March natural gas came in unchanged at $2.68 per 1,000 cubic feet on Tuesday.

What are expectations: Traders await the release of the EIA’s data on crude oil, distillate and gasoline stockpiles today. US crude oil stockpiles had risen by 0.533 million barrels to 448.5 million barrels in the week ended January 20 and are expected to increase by 0.376 million barrels in the latest week. Analysts expect gasoline stockpiles to grow by 1.442 million barrels, while distillate stockpiles are projected to decline 1.3 million barrels.

Other Markets: US trading indices closed higher on Tuesday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 1.09%, 1.46% and 1.59%, respectively.

Support & resistances for today

Market snapshot

What else to watch today

Russia’s manufacturing PMI and industrial production, Turkey’s manufacturing PMI, Spain’s manufacturing PMI and new car sales, Italy’s manufacturing PMI, consumer price inflation and new passenger car registrations, France’s manufacturing PMI, Germany’s manufacturing PMI, Eurozone’s manufacturing PMI, unemployment rate and consumer price inflation, South Africa’s manufacturing PMI and total vehicle sales, UK’s manufacturing PMI and Nationwide house price index, Brazil’s producer price inflation, balance of trade and manufacturing PMI, Mexico’s manufacturing confidence index, manufacturing PMI and Mexico government budget value, US MBA mortgage applications, ADP employment change, S&P Global manufacturing PMI, job openings, ISM manufacturing PMI and construction spending, Canada’s manufacturing PMI, as well as Saudi Central’s interest rate decision.

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