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Pfizer’s results and forecast inject optimism

 

Wednesday, November 02, 2022

The news shaping the markets today

Russia fired more than 50 cruise missiles, which resulted in power outages across various regions in Ukraine. Despite the ongoing tensions, the US dollar index traded lower this morning.


New Zealand’s unemployment rate came in unchanged at 3.30% in the third quarter, lending support to the NZD/USD forex pair.


Australia’s building permits fell by 5.8% to 16,455 units in September, versus a 23.1% surge in August. However, the AUD/USD pair rose slightly in forex trading this morning.


The API said that US crude oil stockpiles had declined by 6.5 million barrels in the week ended October 28, versus a gain of 4.5 million barrels a week ago. US crude oil futures traded higher on the news.


Brazil’s trade surplus narrowed to $3.9 billion in October, from $3.99 billion in the year-ago month. Exports surging 27.1% year-over-year lent support to the BRL/USD forex pair.

 

What’s happening: Shares of Pfizer gained on Tuesday, after the company released results for its third quarter.

What happened: Pfizer reported better-than-expected results for the third quarter and increased its projections for the full year.

The US drugmaker also made an important announcement from a late-stage study of one of its drug candidates.

How were the results: The New York-based company reported a decline in sales for the three months ending in September, but the figure still topped market views.

  • Revenues declined by 6% to $22.64 billion but was higher than market expectations of $21.37 billion.
  • Adjusted earnings came in at $1.78 per share, up 40% from a year ago, and exceeding the consensus estimate of $1.47 per share.

Why it matters: Several nations have already administered the first two covid-19 injections and there is some softness in demand for booster shots as well. As a result, sales of Pfizer’s coronavirus vaccine, which it developed with BioNTech, have declined from the pandemic highs.

Pfizer is looking to sharply increase the vaccine price in the US once the country’s government stops purchasing the shots.

The company’s covid-19 vaccine, Comirnaty, generated direct sales and alliance revenues of $4.4 billion, down significantly from $12.98 billion in the year-ago quarter. However, the figure was still higher than estimates of $2.60 billion. Its covid-19 treatment, Paxlovid, achieved global sales of $7.51 billion, short of market expectations of $7.66 billion.

Management raised their full-year sales forecast to $99.5-$102 billion, from the previous guidance of $98-$102 billion. The projection for adjusted earnings was also raised from $6.30-$6.45 per share to $6.40-$6.50 per share.

The company also increased its forecast for covid-19 vaccine sales by $2 billion to $34 billion and projected sales of around $22 billion for Paxlovid.

Pfizer reported that its bivalent RSV prefusion vaccine candidate was found to be effective in a Phase 3 trial to help prevent severe infections in infants when given to pregnant participants.

“Over the next 18 months, we expect to have up to 19 new products or indications in the market – including the five for which we have already begun co-promotion or commercialization earlier this year,” CEO Albert Bourla said during the earnings call.

How shares responded: Pfizer’s shares gained 3.1% to close at $48.01 on Tuesday, following the release of quarterly results. The stock has gained around 9% over the past month.

What to watch: Markets will keep an eye on the Pfizer’s new launches. Investors will focus on the pipeline of future products with the company expanding its focus through the purchase of Global Blood Therapeutics and Biohaven Pharmaceuticals.

The markets today

US stocks will be in focus today ahead of the much-awaited Fed interest rate decision

Context: Wall Street settled lower on the first trading day of the new month, as investors assessed recent economic reports.

Details: US stocks had recorded sharp gains during October, with the Dow Jones index jumping around 14%, representing its biggest monthly surge since January 1976.

US markets opened higher on Tuesday. Investor sentiment was also supported by data on job openings for September, which rose by 437,000 to 10.72 million. The S&P Global manufacturing PMI also improved to 50.4 in October, compared to a preliminary reading of 49.9.

Markets remained bullish after upbeat results from companies like Pfizer and Uber Technologies. However, investors moved to the sidelines as the day progressed, bracing for another rake hike by the Federal Reserve.

The Fed started its two-day policy meeting on Tuesday and is all set to announce its policy decision today. During its September meeting, the central bank had raised its federal funds rate by 75 bps to a range of 3% to 3.25%. This represented the third three-quarter point hike in a row and sent borrowing costs to the highest level since 2008.

The Dow Jones index declined around 80 points, or 0.24%, to close at 32,653.20 on Tuesday. The S&P 500 lost 0.41% to reach 3,856.10, while the Nasdaq 100 shed 1.02% to settle at 11,288.95.

What to watch: Traders await the Fed’s interest rate decision, with most speculating another 75-bps hike. The release of ADP data will also remain in focus today. Private businesses in the US had created 208,000 jobs in September and is projected to add 190,000 in October.

Other Markets: European trading indices closed higher on Tuesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 up by 1.29%, 0.64%, 0.98% and 0.58%, respectively.

Support & resistances for today

Technical Levels News Sentiment
EUR/USD  – 0.9887 and 0.9898 Negative
USD/CHF – 0.9974 and 0.9984 Positive
Nasdaq 100 – 11278.99 and 11304.63 Negative
DAX 40  – 13310.36 and 13342.73 Negative
Gold – 1652.46 and 1656.36 Positive

Market snapshot

Futures at 0400 (GMT)
EUR/USD (0.9899, 0.25%) Dow ($32,751, 0.20%) Brent ($95.81, 1.2%)
GBP/USD (1.1525, 0.37%) S&P500 ($3,878, 0.30%) WTI ($89.62, 1.4%)
USD/JPY (147.33, -0.62%) Nasdaq ($11,378, 0.41%) Gold ($1,655, 0.3%)

What else to watch today

Germany’s balance of trade, unemployment rate, unemployment change and manufacturing PMI, France’s manufacturing PMI, passenger car registrations and government budget value, Spain’s manufacturing PMI and total vehicle sales, Italy’s manufacturing PMI and new passenger car registrations, Eurozone’s manufacturing PMI, Mexico’s foreign exchange reserves, US MBA mortgage applications, crude oil inventories, gasoline stocks and distillate stockpiles, India’s money supply M3 and balance of trade, Russia’s unemployment rate, retail sales, real wages, business confidence and GDP, as well as Argentina’s tax revenue.


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