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Pfizer’s Q1 print injects optimism in investors

 

Wednesday, May 4, 2022

The news shaping the markets today

Around 101 Ukrainian civilians were evacuated from the tunnels of the Azovstal steel factory in the city of Mariupol. The RUB/USD forex pair traded slightly lower on the news.


Australia’s retail sales grew 1.6% in March, versus 1.8% growth in the previous month. Retail sales climbing for the third straight month sent the AUD/USD pair higher in forex trading this morning.


New Zealand’s unemployment rate came in unchanged at an all-time low of 3.2% in the first quarter. The latest reading was in-line with market expectations, which supported to the NZD/USD forex pair.


Indonesia’s manufacturing PMI rose to 51.9 in April, from 51.3 in the previous month. Despite the figure rising for the eighth month in a row, the IDR/USD pair remained under pressure in forex trading this morning.


US factory orders climbed 2.2% to $557.3 billion in March, recording the biggest increase since May 2021. However, the US dollar index traded flat this morning.

 

What’s happening: Shares of Pfizer rose on Tuesday, after the company reported better-than-expected results for its first quarter.

What happened: Pfizer maintained the sales estimates for its covid-19 vaccine, developed in collaboration with BioNTech, following several hikes to the projections over the past year.

However, the company recorded a decline in one of its major covid-19 treatments during the first quarter.

How were the results: The New York-based company reported strong growth in both sales and earnings for the first quarter.

  • Revenue jumped 77% to $25.66 billion, beating the Street expectations of $23.95 billion.
  • Adjusted earnings came in at $1.62 per share, up 72% year-over-year and well ahead of market estimates of $1.50 per share.

 

Why it matters: Despite a surge in covid-19 cases in some regions around the world, governments of the countries have been easing restrictions and relaxing masking rules.

Pfizer’s Comirnaty vaccine recorded sales of $13.2 billion, jumping 77% from a year ago and also topping the consensus estimates by over $2.6 billion. However, sales of its antiviral pill, Paxlovid, fell short of expectations by around $950 million.

Pfizer is looking to submit data to US regulators for the authorisation of its covid-19 vaccine for children below 5 years of age by early June. The pharma giant is also working on an update of its covid-19 vaccine to combat the Omicron strain.

Sales of the company’s pneumonia vaccine, Prevnar, and blood thinner, Eliquis, also grew by 59% and 12%, respectively during the quarter. Sales of its breast cancer treatment Ibrance declined, however, by 5% in the US due to more patients using a lower-cost program.

Pfizer reaffirmed its sales forecast of between $98 billion and $102 billion for fiscal 2022, which is below the consensus estimate of $107.94 billion. However, management lowered the adjusted earnings guidance from the prior forecast of $6.35-$6.55 per share to $6.25-$6.45 per share, citing new accounting requirements.

The company said it sees covid-19 vaccine sales of $32 billion and sales of its antiviral pill, Paxlovid, of around $22 billion for the year.

How shares responded: Pfizer’s shares gained 2% to close at $49.29 on Tuesday, following the release of quarterly results. The stock has lost around 13% year to date.

What to watch: Investors will keep an eye on rising covid-19 cases and developments around the approval of Pfizer’s vaccine for children under the age of five.

 

 

The markets today

Crude oil will be in focus today ahead of the EIA’s (Energy Information Administration) data on crude oil stockpiles

 

Context: Crude oil futures settled lower on Tuesday, as markets assessed the impact of China’s restrictions on energy demand.

Details: News of new hospital facilities getting ready in Beijing amid a spike in covid-19 cases in China raised fears of a decline in demand for crude oil in the weeks ahead. Despite new infections remaining low in China, the world’s largest oil importer, concerns of a lockdown in Beijing exerted pressure on oil prices.

The EU looking to place an embargo on crude imports from Russia, following the Ukraine invasion, lent some support to oil prices.

The S&P Global Ratings agency raised its WTI crude oil forecast from $80 per barrel to $85 per barrel for 2022 and from $65 per barrel to $70 per barrel for 2023. However, WTI prices are projected to fall to $50 per barrel in 2024.

WTI crude for June delivery shed $2.76, or 2.6%, to settle at $102.41 per barrel on the NYMEX on Tuesday. July Brent crude fell $2.61, or 2.4%, to close at $104.97 per barrel on ICE Futures Europe.

What to watch: Investors await the release of the EIA’s data on crude oil stockpiles. US crude oil inventories, which grew by 0.692 million barrels to 414.4 million barrels in the week ending April 22, are expected to decline by 0.829 million in the latest week. The US Fed’s interest rate decision will also remain in focus today, with expectations of a hike to 1%.

Markets will also keep an eye on rising covid-19 cases, the ongoing Russia-Ukraine tensions and accelerating inflation.

Other Markets: European trading indices closed higher on Tuesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 up by 0.22%, 0.72%, 0.79% and 0.53%, respectively.

Support & resistances for today

Technical Levels News Sentiment
EUR/GBP – 0.8425 and 0.8429 Positive
NZD/USD – 0.6447 and 0.6455 Positive
WTI Crude Oil – 103.30 and 103.46 Positive
Natural Gas – 7.780 and 7.797 Negative
Nasdaq 100 – 13041.05 and 13122.23 Positive

Market snapshot

What else to watch today

Germany’s balance of trade, services PMI and composite PMI, Russia’s manufacturing PMI, Eurozone’s services PMI, composite PMI, retail sales and ECB’s non-monetary policy meeting, Spain’s unemployment change, services PMI and composite PMI, Italy’s services PMI and composite PMI, France’s services PMI, composite PMI and retail sales, Brazil’s IPC-Fipe inflation, services PMI and composite PMI, UK’s mortgage approvals, mortgage lending, consumer credit and net lending to individuals, Mexico’s consumer confidence, US MBA mortgage applications, ADP Employment change, balance of trade, exports, imports, composite PMI, services PMI, ISM services PMI, gasoline inventories, distillate stockpiles, Cushing crude oil stocks, heating oil stocks, and new light-vehicle sales, India’s money supply M3 and central government budget value, as well as Canada’s balance of trade.


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