Moderna Shares Soar on Earnings Beat, Upbeat Vaccine Sales Outlook

Moderna shares surged over 11% on Thursday after the biotech company reported better-than-expected earnings in the fourth quarter and forecasts that vaccine sales will increase during the second half of the year.

The Massachusetts-based biotechnology company reported quarterly adjusted earnings of $11.29​​ per share, beating the Wall Street consensus estimates of $9.90 per share. The company said its revenue soared 1,163.4% to $7.21 billion from a year earlier. That too topped the market expectations of $6.79 billion.

Moderna said sales of the company’s vaccine are expected to increase to $19 billion this year, higher than the previous forecast of $18.5 billion.

On Thursday, Moderna stock traded over 11% higher at $150.01. The stock fell over 40% so far this year after surging over 140% in 2021.

Analyst Comments

Moderna reported Q4 in line w/ the preannouncement and slightly raised the 2022 orderbook by $500M to $19B (total $22B w/ options is the same; just converted some options to orders). Co remains in active discussions for orders for 2022 and has orders for 2023 from some countries. As Street struggles w/ where the pandemic is going, the next catalysts are Phase II flu data and COVID waves and fluidity, in our view,” noted Michael J. Yee, equity analyst at Jefferies.

Moderna Stock Price Forecast

Fourteen analysts who offered stock ratings for Moderna in the last three months forecast the average price in 12 months of $265.00 with a high forecast of $506.00 and a low forecast of $85.00.

The average price target represents an 81.59% change from the last price of $145.93. Of those 14 analysts, four rated “Buy”, nine rated “Hold”, while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $213 with a high of $474 under a bull scenario and $34 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the biotechnology company’s stock.

“We are Equal-weight Moderna. While we believe there is long-term upside for Moderna, we believe the significant valuation increase associated with the success of the COVID-19 vaccine limits the near-term upside,” noted Matthew Harrison, equity analyst at Morgan Stanley.

“The company has taken an industrialized approach to developing mRNA based therapeutics and has rapidly generated a broad pipeline of 21 programs, 11 of which have entered clinical development. We believe Moderna’s mRNA drug development platform is more diversified and scalable compared with competitors, and is validated through broad partnerships with Merck and AstraZeneca. We see vaccines and rare diseases as the key valuation drivers of the company.”

Several analysts have also updated their stock outlook. SVB Leerink cut the target price to $85 from $86. Cowen and company lifted the price target to $250 from $200. Deutsche Bank lowered the target price to $175 from $200.

Technical analysis suggests it is good to sell as 100-day Moving Average and 100-200-day MACD Oscillator gives a strong selling opportunity.

Check out FX Empire’s earnings calendar

Shares of Pharmaceutical Giant AstraZeneca Rise on Upbeat 2022 Sales Outlook

AstraZeneca shares rose over 5% on Thursday after the British-Swedish pharmaceutical giant forecast higher sales this year and raised dividends for the first time in a decade despite it swung to lose in the fourth quarter.

In the last quarter of the year, the Anglo-Swedish pharmaceutical giant reported a net loss of $347 million versus a net profit of $1.01 billion the year before. The pharmaceutical company’s revenue jumped over 60% to $12.01 billion last quarter from a year earlier. That too beat the market expectations of $10.83 billion.

Last year, the company’s total revenues rose by 41% to a record $37.4 billion, driven by cancer drugs.

For the first time in 10 years, AstraZeneca is raising its dividend, paying $2.87 per share for 2021 and $2.90 per share for future years. The company reported quarterly adjusted earnings of $1.67​​ per share, beating the market expectations of $1.51 per share.

“4Q sales 7% ahead of cons on higher COVID-19 vaccine sales, with key growth drivers Tagrisso and Imfinzi light, but Lynparza and Calquence in-line. Top-line beat partially offset by lower gross margin, plus higher SG&A and R&D, for Core EBIT just 1% above, but 9% Core EPS beat on tax. Initial 2022 Revenue and Core EPS aim broadly as expected, with cons towards the upper-end. Shares likely modest uptick,” noted Peter Welford, equity analyst at Jefferies.

AstraZeneca stock traded 4.8% higher at GBX 8,756 on Thursday. The stock rose hardly 1% so far this year after surging more than 18% in 2021.

Analyst Comments

AstraZeneca delivered a strong underlying performance in-line with 2021 expectations. Whilst the mid-point of the 2022 EPS guidance range is slightly below consensus, it reflects the beginning of the end of legacy medicine headwinds in China and significant investment for long-term revenue growth,” noted Mark Purcell, equity analyst at Morgan Stanley.

“Rising concern that AstraZeneca’s (AZN) continued investment for growth strategy could pressure operating margins has weighed on investor sentiment. However, we argue that this narrative misses the strong operating performance and overlooks the sector-leading growth outlook, even when considering increased investment spend (~13% earnings CAGR FY22-25e vs ~10% for the sector). With expectations re-basing lower, R&D spend better understood and the new products & pipeline creating optionality, we believe risks are moving to the upside. Hence, we reiterate our Overweight rating, with AZN remaining our preferred structural growth play.”

AstraZeneca Stock Price Forecast

Twelve analysts who offered stock ratings for AstraZeneca in the last three months forecast the average price in 12 months of 9,705.00p with a high forecast of 11,500.00p and a low forecast of 6,950.00p.

The average price target represents an 11.42% change from the last price of 8,710.00p. Of those 12 analysts, 10 rated “Buy”, one rated “Hold”, while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of 10,200p with a high of 12,000p under a bull scenario and 6,400p under the worst-case scenario. The investment bank gave an “Overweight” rating on the pharmaceutical company’s stock.

Several analysts have also updated their stock outlook. Guggenheim cut the target price to 9900p from 10100p. Liberum raised the target price to 9690p from 9220p. Jefferies lifted the target price to $62.50 from $60. Berenberg cut the target price to 10,000p from 10,500p.

Technical analysis suggests it is good to hold for now as 100-day Moving Average and 100-200-day MACD Oscillator gives mixed signals.

Check out FX Empire’s earnings calendar

Wall Street Week Ahead Earnings: KKR, Walt Disney, Coca-Cola, Twitter and PepsiCo in Focus

Investors will focus on December quarter earnings for stocks that are economically sensitive, which should show better profits than technology stocks. Increasing Treasury yields and risk aversion could hit the stock market hard over the coming months. In addition, investors will closely monitor the latest news on the rapidly spread Omicron coronavirus variant to see how it impacts earnings in 2022.

Earnings Calendar For The Week Of February 7

Monday (February 7)

TICKER COMPANY EPS FORECAST
ACM AECOM $0.77
CHGG Chegg $0.13
HAS Hasbro $0.85
LEG Leggett & Platt $0.73
ON ON Semiconductor $0.94
THC Tenet Healthcare $1.49
TSN Tyson Foods $2.01

 

Tuesday (February 8)

IN THE SPOTLIGHT: KKR

The U.S.-based investment firm KKR & Co is expected to report its fourth-quarter earnings of $1.02 per share, which represents year-over-year growth of over 108% from $0.49 per share seen in the same period a year ago.

The company that manages multiple alternative asset classes would post revenue growth of 17% to $784.8 million. It is worth noting that the company has consistently beaten consensus earnings estimates in the last two years, at least.

“Strong near-term growth with fundraising supercycle and GA accretion coming into earnings, but we see this reflected in the price at the current valuation for a business model with greater earnings contribution from the balance sheet (40%). While strong investment performance could drive upward estimate revisions, we have less visibility on more episodic investment income gains,” noted Michael Cyprys, equity analyst at Morgan Stanley.

“Mgmt’s increased focus on expanding the platform with adjacent strategies and scaling successor funds should drive higher fee-related earnings (FRE).”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 8

TICKER COMPANY EPS FORECAST
BP BP $1.18
IT Gartner $2.47
HOG Harley-Davidson $-0.37
LYFT Lyft $-0.46
PFE Pfizer $0.85

 

Wednesday (February 9)

IN THE SPOTLIGHT: WALT DISNEY

Walt Disney, a family entertainment company, is expected to report its fiscal first-quarter earnings of $0.68 per share, which represents year-over-year growth of over 112% from $0.32 per share seen in the same period a year ago.

The family entertainment company would post revenue growth of over 30% to $21.15 billion. The company has beaten earnings estimates in most of the quarters in the last two years, at least.

Disney is building content assets that enable it to take advantage of the significant direct-to-consumer streaming opportunity ahead. Disney’s underlying IP remains best-in-class, supporting long term content monetization opportunities,” noted Benjamin Swinburne, equity analyst at Morgan Stanley.

“During this period of FCF pressure from Parks closures, ESPN’s FCF generation is key to driving down leverage. Historical cycles suggest a potential return to above prior peak US Parks revenues in FY23.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 9

TICKER COMPANY EPS FORECAST
AFG American Financial Group $2.98
CVS CVS Health $1.56
HMC Honda Motor $0.95
RDWR Radware $0.13
SGEN Seagen $-0.74
TM Toyota Motor $3.76
UBER Uber Technologies $-0.33

 

Thursday (February 10)

IN THE SPOTLIGHT: COCA-COLA, TWITTER, PEPSICO

COCA-COLA: The world’s largest soft drink manufacturer is expected to report its fourth-quarter earnings of $0.41 per share, which represents a year-over-year decline of over 12% from $0.47 per share seen in the same quarter a year ago. However, the company’s revenue would grow nearly 4% to $8.94 billion.

TWITTER: The social media giant is expected to report its fourth-quarter earnings of $0.35 per share, which represents year-over-year growth of about 8% from $0.38 per share seen in the same period a year ago.

The company would post revenue growth of over 21% to $1.57 billion. Twitter expects revenues of approximately $1.5 billion to $1.6 billion in the fourth quarter of 2021. GAAP operating income is expected to range from $130 million to $180 million, according to ZACKS Research.

With a focus on engineering and products, Twitter expects to increase headcount and costs by 30% or more in 2021. In 2021, the company expects total revenues to grow faster than expenses.

“Lack of Negative Revisions and Relative Valuation: Valuation continues to be expensive, but we think investors are likely to continue to pay a premium for Twitter (TWTR) given 1) continued turnaround progress and 2) platform scarcity,” noted Brian Nowak, equity analyst at Morgan Stanley.

“Execution Risk Remains Around Driving Advertiser ROI: Advertiser ROI has clearly improved on Twitter, but the company needs to improve ad targeting and measurability to compete with the larger players. To do that it will have to further personalize the content that users see and use its data more effectively, both of which remain key strategic challenges (and priorities) for management.”

PEPSICO: The Harrison, New York-based global food and beverage leader is expected to report its fourth-quarter earnings of $1.52 per share, which represents year-over-year growth of over 3% from $1.47 per share seen in the same period a year ago.

The U.S. multinational food, snack, and beverage corporation would post revenue growth of about 9% to $24.35 billion. It is worth noting that the company has consistently beaten consensus earnings estimates in the last two years, at least.

The company revised its organic revenue growth to 8% from 6% previously. The company estimates core earnings of $6.20 per share for 2021, compared to $5.52 in 2020, according to ZACKS Research.

PepsiCo struggles with supply-chain headwinds that have caused it to increase costs and limit its output. Investors will want to know whether the beverage company is winning this battle when it reports its financial results for the fourth quarter of 2021 on Thursday, February 10.

“For the quarter, we are expecting PepsiCo (PEP) to deliver EPS of $1.47, which implies flat YoY growth and is 4 pennies below consensus EPS of $1.51. Our $1.47 4Q21 estimate implies FY21 EPS of $6.20, which is at the low end of management’s expectation to deliver “at least” $6.20 in EPS and may ultimately prove conservative given PepsiCo’s (PEP) history of outperforming expectations. Since 1Q18, we can see that PEP’s reported EPS has come in above consensus in 14 out of the past 15 quarters, with an average upside surprise of+5%,” noted Vivien Azer, equity analyst at Cowen.

“As we are already almost a month into the new year, all eyes will be on PepsiCo’s (PEP) initial FY22 guidance. As a reminder, on the last earnings call management noted that at the time they expected FY22 performance to be in line with its stated long-term targets, which means MSD (+4-6%) organic revenue growth and HSD core constant currency EPS growth.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 10

TICKER COMPANY EPS FORECAST
AZN AstraZeneca $0.78
EXPE Expedia Group $-0.01
GDDY GoDaddy $0.41
K Kellogg $0.8
MCO Moody’s $2.3
PEP PepsiCo $1.52
TWTR Twitter $0.16
WU Western Union $0.53

 

Friday (February 11)

TICKER COMPANY EPS FORECAST
APO Apollo Global Management $1.08
D Dominion Energy $0.93
FTS Fortis $0.58
MGA Magna International $0.81

 

Why Novavax Stock Is Up By 6% Today

Novavax Stock Rallies After Company Gets Emergency Use Authorization For COVID-19 Vaccine In India

Shares of Novavax gained strong upside momentum after the company received an emergency use authorization for its coronavirus vaccine in India.

Novavax stock has been very volatile in recent months and traded in a wide range between the lows near $120, that were reached back in October, and the highs near $235, that were reached a week ago.

It should be noted that other vaccine stocks like Moderna and BioNTech have also experienced significant volatility. It looks that traders are concerned about sustainability of current revenue and profits.

New anti-viral drugs appeared in the market, and there are hopes that Omicron, which has already became the dominant variant in the U.S. according to CDC, may be less dangerous than Delta. In this environment, market sentiment shifts quickly, which is visible in the recent dynamics of Novavax stock.

What’s Next For Novavax Stock?

Analysts expect that Novavax will report a loss of $12.12 per share in the current year and a profit of $25.71 per share in the next year, so the stock is trading at less than 7 forward P/E.

As I mentioned above, the key problem for Novavax and other vaccine stocks is poor earnings visibility. In addition, earnings estimates for the next year have been steadily declining, which served as an additional bearish catalyst for Novavax stock.

While Novavax is cheaper than its peers, the discount is not dramatic, so it remains to be seen whether speculative traders will choose Novavax stock over the above-mentioned Moderna or BioNTech if they decide to bet on the rebound of the segment.

In recent weeks, we have seen some rush to safety, and bigger, diversified players like AstraZeneca and Pfizer had good stock price dynamics while shares of  non-diversified vaccine makers found themselves under pressure. If this trend continues, shares of Novavax will move lower despite good news from India.

For a look at all of today’s economic events, check out our economic calendar.

What Fuels The Stock Market Now?

An outstanding earnings season and signs that economic activity are picking back up are clashing with unrelenting inflation, difficulty finding more labor, and continued supply chain logjams.

Inflation

Most insiders believe inflation has further to climb, though the consensus right now is calling for a peak around the beginning of Q2 next year. With big shopping holidays in the U.S. coming up, followed closely by Chinese New Year at the beginning of February 2022, shipping and transportation logjams aren’t expected to find much relief in the near-term.

Meaning inflation pressures will likely continue. How far inflation will climb as the severe supply chain dislocations drag on is a huge unknown. Some Wall street investors are concerned that the Fed might feel compelled to end its asset purchases and hike rates much sooner than expected if monthly inflation keeps accelerating.

What might be even more worrisome is the fear that some of these price increases could be more permanent in nature, so how much overall inflation will pull back in the long run is starting to become a bigger talking point.

Demand and supply chain

Supply chain insiders warn that many companies are front-loading inventories in an effort to avoid running out of critical materials, which could bite in the long run if demand suddenly drops off. A lot of manufacturers have also increased production capacity for products that currently face shortages. The risk is that once back orders are filled and demand retreats, stockpiling and excess production could result in an oversupply situation in some areas, along with much lower profits and total revenues.

Another worry right now is that demand starts to retreats due to the current inflationary environment especially with everyday items like food and gasoline costing substantially more. That has investors anxious to see the latest Consumer Sentiment read being released today which is expected to edge higher vs. last month.

Investors are closing tracking the inflation expectation gauges in the report as typically the higher those climb, the more consumers tend to pull back on spending.

Data to watch next week

Looking towards next week, the economic data flow picks up with key releases including Empire State Manufacturing on Monday; Retail Sales, Import/Export Prices, Industrial Production, Business Inventories, and the NAHB Housing Market Index on Tuesday; Housing Starts and Building Permits on Wednesday; and the Philadelphia Fed Index on Thursday.

On the earnings front, Q3 reporting is just about wrapped up with companies in the S&P 500 index reporting revenue growth of more than +17%, the second highest on record behind only Q2 2021’s growth of over +25%, according to FactSet. Earnings themselves are on track to exceed +40%. AstraZeneca is today’s earnings highlight. Earnings next week include several big retailers which will provide some more clues as to how consumer demand is trending as well as updates on supply chain struggles. Investors are also keen to hear how holiday hiring is going.

Key earnings reports next week will include Advanced Auto Parts, Lucid, Tyson, and Warner Music on Monday; Home Depot and Walmart on Tuesday; Bath & Body Works, Cisco, Lowe’s, NVIDIA, Target, TJX, and Victoria’s Secret on Wednesday; Alibaba, Applied Materials, Intuit, Kohl’s, Macy’s, Palo Alto Networks, Ross Stores, and Williams Sonoma on Thursday; and The Buckle and Foot Locker on Friday.

Checking in on the geopolitical front, the U.S. is warning that Russia may be planning a full-scale invasion of Ukraine. U.S. officials say they’ve briefed their EU counterparts about concerns over a possible military operation, citing a buildup of Russian troops along the Ukraine border. Tensions are boiling still in Belarus and Russia is fanning the flames on that front as well.

SP500 commentary

ES ##-## (Daily) 2021_11_14 (1_49_54 AM)

The bearish accumulation divergence played very well last week. Moreover, the Advance Decline Line is weaker than the price is. It is also a negative factor in the short term. Potentially SP500 started the formation of the bull flag. Finding support at lower levels would be a great buying point with a target of 4800.

The major economic indicators are still bullish despite rising inflation. 4500 level is a psychological level bears will target if 4600 fails. Current levels can be considered only for intraday trading. At the same time, lower levels are needed to get a good risk/reward ratio for swing traders.

For a look at all of today’s economic events, check out our economic calendar.

Why AstraZeneca Stock Is Down By 6% Today

AstraZeneca Stock Declines After Earnings Report

Shares of AstraZeneca found themselves under significant pressure after the company released its quarterly results.

AstraZeneca reported revenue of $9.87 billion and adjusted earnings of $1.08 per share, beating analyst estimates on both earnings and revenue. However, the company’s GAAP loss of $1.10 per share missed analyst estimates by a wide margin, which served as a negative catalyst for the stock.

The company reiterated its full-year guidance, but it looks that the market expected that it would set more aggressive targets.

AstraZeneca has also stated that it would begin to sell its coronavirus vaccine for a profit. In the quarter, COVID-19 vaccine added $0.01 to the company’s EPS, and AstraZeneca expects that vaccine’s contribution to earnings will gradually increase in the upcoming quarters, although its contribution in the fourth quarter of this year will be limited.

What’s Next For AstraZeneca Stock?

AztraZeneca is projected to report earnings of $3.27 this year and $3.98 per share in the next year, so the stock is trading at 15 forward P/E.

It looks that the market does not believe that the company’s coronavirus vaccine will be able to materially boost its profits as the market is dominated by vaccines from Pfizer and Moderna. In addition, the market has recently became more cautious towards vaccine makers due to low visibility of vaccine-related earnings after 2022.

It should be noted that AstraZeneca stock is trading at a premium to Pfizer stock, and it remains to be seen whether this premium is justified. Current valuation levels do not look to cheap so multiple compression is possible, which is bearish for the stock. AstraZeneca shares have recently traded near yearly highs so opportunistic traders may choose to wait for additional pullback before initiating new positions in the stock.

For a look at all of today’s economic events, check out our economic calendar.

Preview: What to Expect From AstraZeneca’s Q3 Earnings on Friday

The British-Swedish pharmaceutical giant AstraZeneca is expected to report earnings per share of GBP 92.54 in the third quarter on revenue of GBP 7.04 billion.

The one listed on the U.S. exchange was expected to report revenue growth of over 50% to $9.871 billion from $6.58 billion seen in the same period a year earlier. The earnings per share (EPS) was expected to rise to $0.62 from $0.47 a year ago.

“We estimate Q3 EPS of $1.23 (+31%) vs. consensus of $1.24. We forecast total Q3 revenue of $9.85B (+50%) vs. consensus of $9.62B. Collaboration revenue is estimated to contribute $80MM. Q3 estimates of key products include: Tagrisso (+19% to $1,370MM), Imfinzi (+28% to $685MM), Lynparza (+36% to $630MM), and Fasenra (+44% to $345MM),” noted Steve Scala, equity analyst at Cowen.

The London-listed AstraZeneca shares rose nearly 30% so far this year. It was trading 1.04% higher at GBX 9,386 at the time of writing on Wednesday. AstraZeneca’s better-than-expected third-quarter earnings results, which will be announced on Friday, November 12, could help the stock scale to a fresh record high.

Analyst Comments

“We expect Q3’21 sales to reflect lower levels of cancer diagnoses and VBP pressures in China, with the gross margin continuing to be impacted by COVID-19 vaccine sales and changes in product mix. With collaboration revenues / OOI phased into 4Q21, consensus Q3’21 earnings appear c.8% too high,” noted Mark Purcell, equity analyst at Morgan Stanley.

“Sector leading growth: The acquisition of Alexion should accelerate revenue growth to 8% CAGR FY22-25e, whilst strengthening the therapeutic and geographic diversification of the group. After reflecting cost synergies, we project ~15% earnings CAGR FY22-25e vs. ~8% for peers. Product & pipeline optionality: We see a further 20-30% upside risk to cons. expectations from new product launches. In addition, we see near-term upside from the pipeline, where positive readouts could drive MSD upside to cons. mid-term earnings. Valuation is compelling: Currently trading on~16x FY’22e P/E/at a 40% discount to close comparator Novo, despite offering stronger and arguably more diversified growth.”

AstraZeneca Stock Price Forecast

Thirteen analysts who offered stock ratings for AstraZeneca in the last three months forecast the average price in 12 months of GBX 9,596.25 with a high forecast of GBX 15,000.00 and a low forecast of GBX 105.00.

The average price target represents a 2.26% change from the last price of 9,384.00p. All of those 13 analysts rated “Buy”, according to Tipranks.

Morgan Stanley gave the base target price of GBX 10,000 with a high of GBX 12,000 under a bull scenario and GBX 6,900 under the worst-case scenario. The firm gave an “Overweight” rating on the pharmaceutical company’s stock.

Several other analysts have also updated their stock outlook. UBS raised the target price to GBX 10,000 from GBX 9,200. Guggenheim lifted the target price to GBX 11,100 from GBX 11,000. HSBC upped the target price to GBX 8,750 from GBX 7,131.

Technical analysis suggests it is good to buy now as 100-day Moving Average, and 100-200-day MACD Oscillator signals a strong buying opportunity.

Check out FX Empire’s earnings calendar

Earnings Week Ahead: PayPal, Middleby, Walt Disney and AstraZeneca in Focus

Earnings Calendar For The Week Of November 8

Monday (November 8)

IN THE SPOTLIGHT: PAYPAL

The leading global payments company PayPal will post earnings of $1.07 per share in the third quarter, more or less in line with the reading seen in the same period a year ago. San Jose, California-based company would post revenue growth of about 14% to around $6.2 billion.

PayPal estimates revenues of about $6.15 billion to $6.25 billion during the third quarter of 2021, up by 13-14% from the previous quarter. The company anticipates non-GAAP earnings per share of $1.07 during Q3 of 2021.

PayPal, one of our top OWs (Overweight), is the preferred digital wallet option for non-Amazon merchants, as evidenced by its online acceptance lead vs. other digital wallets and industry-low attrition. PayPal’s efforts to offer a seamless and secure checkout experience ties its TPV growth rate with the secular growth of eCommerce. As consumers increase their habitual use of PayPal, the company should grow its TPV at or above the rate of eCommerce (ex-Amazon),” noted James Faucette, equity analyst at Morgan Stanley.

“Venmo, POS and partnership monetization could offer additional TPV and revenue growth, while operating leverage from its scale support 20%+ earnings growth over the medium term, despite near-term headwinds from eBay and macro impacts.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE NOVEMBER 8

Ticker Company EPS Forecast
FIVN Five9 $0.24
THS TreeHouse Foods $0.50
BKI Black Iron Inc. $0.57
COTY Coty $0.02
AEIS Advanced Energy Industries $0.82
AMRS Amyris -$0.15
SANM Sanmina $0.99
AU Anglogold Ashanti $0.36
MRTX Mirati Therapeutics -$2.88
CTRE CareTrust REIT $0.20
PSEC Prospect Capital $0.18
AMC AMC Entertainment -$0.53
VAC Marriottacations Worldwide $1.42
JKHY Jack Henry Associates $1.32
PRI Primerica $2.98
NNI Nelnet $1.68
OSH Oak Street Health -$0.42
ACAD Acadia Pharmaceuticals -$0.26
FSK FS KKR Capital $0.61
MWA Mueller Water Products $0.19
AEL American Equity Investment Life $0.76
PRAA PRA $0.73
DOOR Masonite International $1.87
TRIP TripAdvisor $0.24
NHI National Health Investors $0.98
TREX Trex $0.58
IFF International Flavors Fragrances $1.37
ENV Envestnet $0.58
TWO Two Harbors Investment $0.19
CBT Cabot $1.03
PYPL PayPal $1.07

Tuesday (November 9)

IN THE SPOTLIGHT: MIDDLEBY

Middleby, a global leader in the foodservice equipment industry, is expected to report earnings of $2.03 in the third quarter, which represents year-over-year growth of over 50% from $1.34 per share seen in the same period a year ago.

The U.S. foodservice equipment maker will report revenue of $837.32 million, up 32% from the same period a year ago. It is worth noting that the company has always surpassed consensus earnings estimates in the last four quarters.

“The outlook for MIDD appears positive heading into 3Q21 earnings next week, with ITW Food Equipment seeing ~50% growth in restaurant revenue and JBT Foodtech generating+15% organic growth. Restaurant commentary points to investment activity centred around increasing efficiency/productivity, although we could see new builds pushed out due to labour/supply chain constraints,” noted Saree Boroditsky, an equity analyst at Jefferies.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE NOVEMBER 9

Ticker Company EPS Forecast
HAIN Hain Celestial $0.24
IGT International Game Technology $0.53
JHX James Hardie Industries $0.32
HAE Haemonetics $0.61
IIVI Ii Vi $0.83
FSS Federal Signal $0.46
TAC TransAlta USA $0.11
WRK WESTROCK $1.17
STWD Starwood Property $0.52
CAH Cardinal Health $1.33
PLTR Palantir Technologies Inc. $0.04
DHI DR Horton $3.39
SGMS Scientific Games $0.37
ELY Callaway Golf $0.03
OCGN Ocugen -$0.04
SEAS SeaWorld Entertainment $1.66
SATS EchoStar $0.33
ITCI Intra Cellular Therapies -$0.90
MIDD Middleby $2.03
EC Ecopetrol $2,315.76
ADT ADT $0.08
SYY Sysco $0.86
G Genpact $0.56
JAZZ Jazz Pharmaceuticals $3.31
RNG RingCentral $0.33
TTEC TeleTech $0.84
NSTG NanoString Technologies -$0.55
LGND Ligand Pharmaceuticals $1.07
BAK Braskem $2.34
EPAY Bottomline Technologies $0.25
PAAS Pan American Silver USA $0.35
NUVA NuVasive $0.54
CNNE Cannae $0.09
COKE Coca Cola Bottlingconsolidated $7.86
PAY VeriFone Systems $0.01
CCXI ChemoCentryx -$0.45
SWX Southwest Gas $0.13
DAR Darling Ingredients $0.82
ASH Ashland $1.34
EDU New Oriental Education Tech -$0.05
GOL Gol Linhas Aereas Inteligentes -$1.01

Wednesday (November 10)

IN THE SPOTLIGHT: WALT DISNEY

Walt Disney, a family entertainment company, is expected to report its fiscal fourth-quarter earnings of $0.44 per share, which represents year-over-year growth of over 320% from a loss of -$0.20 per share seen in the same period a year ago.

The family entertainment company would post revenue growth of 28% to $18.8 billion. The company has beaten earnings per share (EPS) estimates all times in the last four quarters, according to ZACKS Research.

As of July, Disney+ and Hotstar had more than 116 million subscribers, while Hulu and ESPN+ combined had more than 57 million subscribers. Barclays analysts cite slowing growth and the fact that Disney+ produces far less new content than Netflix, as reasons for their scepticism. Disney+ claims to have 250 million subscribers by 2024, Fobes reported.

“We see Disney on the shortlist of global streaming majors. Despite significant continued upward earnings revisions, shares have lagged as net adds expectations ran ahead of content deliveries. As the content pipeline builds into ’22 and ’23, core net adds should accelerate, driving shares,” noted Benjamin Swinburne, equity analyst at Morgan Stanley.

Disney is building content assets that enable it to take advantage of the significant direct-to-consumer streaming opportunity ahead. Disney’s underlying IP remains best-in-class, supporting long term content monetization opportunities. During this period of FCF pressure from Parks closures, ESPN’s FCF generation is key to driving down leverage. Historical cycles suggest a potential return to above prior peak US Parks revenues in FY23.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE NOVEMBER 10

Ticker Company EPS Forecast
AY Atlantica Yield $0.60
PRGO Perrigo $0.65
ADNT Adient PLC -$0.75
WWW Wolverine World Wide $0.61
ENR Energizer $0.72
GIB CGI Group USA $1.08
AER AerCap $2.22
ELP Companhia Paranaense De Energia $0.66
MSGS Madison Square Garden Sports -$1.30
PAM Pampa Energia $0.93
BRKS Brooks Automation USA $0.77
YPF YPF $0.31
ENS Enersys $1.07
EBR Centrais Eletricas Brasileiras $0.25
FICO Fair Isaac $3.18
CCMP Cabot Microelectronics $1.87
DIS Walt Disney $0.52
BRFS BRF $0.03
ATO Atmos Energy $0.34
KGC Kinross Gold USA $0.06

Thursday (November 11)

Ticker Company EPS Forecast
CAE Cae USA $0.16
GFI Gold Fields $0.21
AEG Aegon -$0.02
TPR Tapestry Inc $0.70
BAM Brookfield Asset Management USA $0.83
EPC Edgewell Personal Care $0.84
UTZ Utz Brands $0.16
FLO Flowers Foods $0.25
CELH Celsius $0.06
SBH Sally Beauty $0.52
MT Arcelormittal $4.01
PVG Pretium Resources $0.16
SBS Companhia De Saneamento Basico $0.19
BLFS BioLife Solutions -$0.07

Friday (November 12)

IN THE SPOTLIGHT: ASTRAZENECA

The British-Swedish pharmaceutical giant AstraZeneca is expected to report earnings per share of GBP 92.54 in the third quarter on revenue of GBP 7.04 billion.

“We expect Q3’21 sales to reflect lower levels of cancer diagnoses and VBP pressures in China, with the gross margin continuing to be impacted by COVID-19 vaccine sales and changes in product mix. With collaboration revenues / OOI phased into 4Q21, consensus Q3’21 earnings appear c.8% too high,” noted Mark D Purcell, equity analyst at Morgan Stanley.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE NOVEMBER 12

Ticker Company EPS Forecast
MFG Mizuho Financial $0.08
SMFG Sumitomo Mitsui Financial $0.20
CIG Companhia Energetica Minas Gerais $0.07
SPB Spectrum Brands $0.79
ROLL Rbc Bearings $1.05

 

Weaker Sterling Boosts FTSE, Barclays Slides as CEO Steps Down

Barclays was down 2.7% in early deals after it said CEO Jes Staley is to stand down following British regulators’ investigations into his ties with convicted sex offender Jeffrey Epstein.

The FTSE 100 index gained 0.3% by 08:10 GMT, with drugmakers AstraZeneca and GlaxoSmithKline among the top boosts.

Investor focus now is on the Bank of England meeting on Thursday, with a better-than-even chance of the central bank raising interest rates for the first time since the pandemic. [BOEWATCH].

The domestically focussed mid-cap index advanced 0.3%.

Commercial landlord Land Securities Group gained 0.7% after it announced plans to buy the property regeneration firm U and I Group for 190 million pounds ($259.46 million).

(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Shounak Dasgupta)

 

FTSE 100 Falls on Rate Hike Worries; Playtech Soars

By Shashank Nayar and Bansari Mayur Kamdar

The blue-chip FTSE 100 index declined 0.1% by 08:10 GMT, with AstraZeneca and Diageo PLC being among the top losers.

Softbank-backed online retailer and tech group, The Hut Group, rose 8.4% after saying it would remove its founder’s “golden share” and seek a place on the premium segment of the main stock market.

A survey of chief financial officers at top British companies found that they expect supply chain problems in the UK to persist for at least another year and consumer price inflation to still be above 2.5% in two years’ time.

Supply worries and rising energy costs have slowed the pace of gains on the FTSE 100 recently and led the benchmark index to underperform developed market peers in Europe and the United States.

While U.S. and the wider European stock aggregate have hit multiple record highs this year, the FTSE 100 is around 8% away from all-time highs that were last hit in May 2018.

“If consumers are facing higher energy prices and higher prices of goods in the shops, they may start to become less spend-happy, buying less at some point, which then could have an impact on companies,” said Susannah Streeter, market analyst at Hargreaves Lansdown.

The domestically focussed mid-cap index was unchanged.

Investor sentiment also took a hit after data showed China’s economy grew more slowly than expected in the third quarter, clouding the global recovery outlook.

Gaming software supplier Playtech Plc soared 58% after Australia’s Aristocrat Leisure Ltd said it will buy the company for 2.1 billion pounds ($2.89 billion).

British transport group National Express and its takeover target Stagecoach Group dropped 1.7% and 2.1%, respectively, after the regulator extended the deadline until Nov. 16 for National Express to make a firm offer.

(Reporting by Bansari Mayur Kamdar; editing by Uttaresh.V)

Moderna Could Offer Low-Risk Buying Opportunity

Moderna Inc. (MRNA) fell 11.4% on Friday after Dow component Merck and Co. Inc. (MRK) announced positive clinical results for a pill to reduce COVID-19 hospitalizations and death. If emergency use is approved, patients can take the pill after infection but it won’t replace the billions of vaccinations still needed to inoculate the planet. The decline added to a string of losses since late September, bringing the total weekly loss to a staggering 19.44%.

The Pure COVID Play

MRNA’s float is just 344 million shares, far lower than the billions at Merck, Pfizer Inc. (PFE), and AstraZeneca PLC (AZN), generating volatile price action that’s highly levered to pandemic catalysts, positive and negative. In fact, shareholders have been whipsawed by price swings of 80 points or more, higher and lower, four times since the end of July. Unfortunately, accumulation has deteriorated badly on the latest downturn, exposing the stock to a deep Q4 correction.

However, the future is bright for the Cambridge, MA juggernaut, which holds the most important biotech patents since statins hit the market in the 1980s. The company announced a host of “significant advances across its growing portfolio” at a Research and Development Day last month, with ongoing trials and treatments for the COVID booster, RSV + hMPV, Epstein-Barr, and forms of cancer. In addition, it announced that 37 programs are now in development, including 22 in ongoing clinical studies.

Wall Street and Technical Outlook

Wall Street consensus is mixed after Moderna’s historic gains, with a ‘Hold’ rating based upon 5 ‘Buy’, 7 ‘Hold’, and 1 ‘Underweight’ recommendation. In addition, three analysts recommend that shareholders close positions and move to the sidelines. Price targets range from a low of $85 to a Street-high $485 while the stock closed Friday’s session more than $100 below the median $453 target. It’s instructive to note that analysts have been horrifically wrong about the pandemic’s trajectory since the start of 2020.

Moderna came public at 22 in 2018 and traded in a range between 11 and 30 into 2020 when it broke out in a powerful but highly volatile uptrend. It cleared resistance in the 80s in November and another barrier at 160 in June 2021, entering a final wave that posted an all-time high at 497.49 in August. The stock just broke down from a double top pattern, favoring downside that could offer a low-risk buying opportunity at the unfilled July gap between 260 and 271.

For a look at this week’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

AstraZeneca Exploring Options for COVID-19 Vaccine Business

By Alistair Smout and Pushkala Aripaka

The review of the future of the vaccine comes after a series of setbacks in its race to produce a shot for the world. Executives emphasised it was too early to say what the decision on the vaccine’s future would be.

AstraZeneca agreed to work with the University of Oxford on its COVID-19 shot last year despite having no prior vaccine experience, taking on the project with a pledge not to make a profit during the coronavirus pandemic.

While a $39 billion dollar deal to buy rare drug firm Alexion is much more integral to the company’s business strategy, the COVID-19 vaccine has quickly become the public face of the company’s efforts during the coronavirus pandemic.

“A small group of people reporting into Mene (Pangalos, research chief) and myself are thinking about: is this a sustainable business?” AstraZeneca Executive Vice President and President of the BioPharmaceuticals Business Unit Ruud Dobber said, referring to the vaccines business.

“We need to have that discussion with our senior executive team, and then with the board of AstraZeneca. We are exploring different options, but it is far too early at this stage to conclude that (process).”

Dobber added that “before year-end, we will have more clarity”.

“Hopefully before the year ends, we will have a better view how to move forward in the next few years,” he said.

“If you ask me, is the vaccine business a sustainable business for AstraZeneca for the next five or 10 years, that big strategic question is under discussion.”

FAR TOO EARLY

AstraZeneca has been criticised by the European Union for its supply of shots, and is being sued by the bloc. The vaccine has also faced age restrictions due to rare clots linked to the vaccine and its application for U.S. approval is longer than expected.

Chief Executive Pascal Soriot said he had no regrets over getting involved in COVID-19 vaccines as the company has made an “enormous difference”.

It has delivered one billion doses around the world globally and is celebrated by the British government as a national success story of the pandemic.

Dobber said that AstraZeneca’s “number one commitment” was to deliver hundreds of millions of vaccine doses that were covered by current contracts.

“It’s not a distraction,” he said.

He added that the company would keep its pledge to deliver a broadly available and accessible vaccine. Soriot has said that the vaccine will always be kept affordable for low-income countries, even when the company moves away from a no-profit model.

Results released on Thursday showed sales of the vaccine in the second quarter more than tripled to $894 million from the first three months of the year.

But, unlike for rivals including Pfizer, it remains a drag on earnings overall, and Dobber said that if the vaccine business were to be sustainable, the company would have to stop making a loss on it.

“It doesn’t mean that moving forward we will not make a bit of profit,” Dobber said. “It’s not sustainable to do it without profits, but it’s too early now to speculate about that.”

(Reporting by Alistair Smout in London and Pushkala Aripaka in Bengaluru; Editing by Jason Neely, Josephine Mason and Jan Harvey)

Stronger Pound Weighs on FTSE 100 as June Inflation Jumps

The blue-chip FTSE 100 index slid 0.3%, with travel stocks down nearly 0.7%. Retailers Unilever, GlaxoSmithKline, and Diageo were among the top drags as the pound rose after inflation jumped to its highest in almost three years.

The domestically focussed mid-cap index fell 0.4%, with Cineworld being the top loser.

British inflation rose further above the Bank of England’s target in June at 2.5%, up from 2.1% in May, led by higher prices for food, fuel, second-hand cars, clothing, and footwear, official data showed on Wednesday.

That pushed UK’s benchmark 10-year bond yields up by five basis points, but the central bank’s comments that said the spike is likely to be transitory helped curb further losses.

“We’re still stuck in an inflationary limbo, where we can’t tell if rising prices are a statistical blip, or a more concerning and permanent feature of the global economic recovery,” said Laith Khalaf, a financial analyst at AJ Bell.

The blue-chip FTSE 100 has gained nearly 10% so far this year, supported by cheap interest rates, but its pace of growth has slowed since June to trade range-bound near the 7,100 level as higher COVID-19 cases and inflation weighed on investor mood.

Among stocks, AstraZeneca lost 0.7% and was the top drag on the FTSE 100. UK’s competition regulator cleared its $39 billion buyout of U.S.-based Alexion.

Barratt Developments gained 1.3% after it forecast 2021 profit to be marginally above the top end of market expectations.

Snack food firm SSP Group tumbled 2.7% on its chief executive officer’s plans to step down from his role at the end of 2021 to join a private equity-backed business.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Shashank Nayar in Bengaluru; Editing by Subhranshu Sahu and Uttaresh.V)

 

Mining, Healthcare Stocks Boost FTSE 100 as Economy Strengthens

The blue-chip index rose 0.3%, with precious metal miners and base metal miners jumping 2% and 1.4%, respectively.

Pharmaceutical stocks also rose, with AstraZeneca leading the gains.

The domestically focused mid-cap FTSE 250 index advanced 0.3%.

The UK economy in April was a record 27.6% larger than 12 months before, official data showed, an increase that reflects recent reopening and the scale of disruption to everyday life early in the COVID-19 pandemic. In April alone, output rose by 2.3%, marking the fastest growth since July.

Among other stocks, Sanne Group jumped 11.5% as the asset management services provider said it was in talks with Cinven after the private-equity firm made a sweetened offer of 875 pence per share to buy the company.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Devik Jain in Bengaluru; editing by Uttaresh.V)

 

Uk Competition Regulator Looking Into $39 Billion Astrazeneca-Alexion Deal

The UK’s Competition and Markets Authority (CMA) said on Tuesday it was inviting comments from any interested party on the deal to help its assessment, setting a deadline of June 3 for any submissions.

Anglo-Swedish drugmaker AstraZeneca, also a major COVID-19 vaccine producer, agreed to buy Alexion in December in its largest ever deal in a bet on rare-disease and immunology drugs and to diversify away from its fast-growing cancer business.

Cambridge, UK-based AstraZeneca’s shareholders approved the proposal at a general meeting earlier this month.

The United States has cleared the deal, as have other countries including Canada, Brazil and Russia.

“The commencement of the UK CMA’s formal review is another important step towards closing of the proposed acquisition, which we continue to expect will be in the third quarter of 2021,” a representative for AstraZeneca said.

Alexion did not immediately respond to a request for comment.

It’s best-selling drug Soliris is used against a range of rare immune-disorders including paroxysmal nocturnal hemoglobinuria (PNH), which causes anaemia and blood clots.

AstraZeneca hopes an improved version of the drug has even larger market potential. It expects to boost growth by introducing Alexion’s rare-disease medicines to China and other emerging markets.

(Reporting by Pushkala Aripaka in Bengaluru; Editing by Devika Syamnath, Kirsten Donovna)

Oxford Biomedica Lifts Outlook as AstraZeneca Ramps Up Vaccine Output

Shares of the cell therapy firm, which has an agreement to mass-produce AstraZeneca’s COVID-19 vaccine, rose 6.2% in early trading.

Oxford Biomedica raised its forecast for cumulative revenues from AstraZeneca by end-2021 to more than 100 million pounds ($141.82 million) from more than 50 million pounds earlier. The company did not provide any other details on its deal.

Liberum analysts said the increased supply deal was a “huge endorsement” of Oxford Biomedica’s capabilities, and that a further extension from AstraZeneca feels “increasingly likely”.

AstraZeneca has had a bruising start to the year as it struggled with vaccine production and faced a legal battle after cutting deliveries to Europe.

Oxford Biomedica was spun off in 1995 from the University of Oxford, which developed the COVID-19 vaccine before licensing it to AstraZeneca in April 2020.

The company, which signed the 18-month supply deal with AstraZeneca in September 2020, did not immediately respond to a Reuters request for a comment.

($1 = 0.7051 pounds)

(Reporting by Vishwadha Chander in Bengaluru; Editing by Devika Syamnath)

EU Sues AstraZeneca over Delayed Deliveries of COVID-19 Vaccine

AstraZeneca said in response that the legal action by the EU was without merit and pledged to defend itself strongly in court.

“AstraZeneca has fully complied with the Advance Purchase Agreement with the European Commission and will strongly defend itself in court. We believe any litigation is without merit and we welcome this opportunity to resolve this dispute as soon as possible,” AstraZeneca said in a statement on Monday.

Under the contract, the Anglo-Swedish company had committed to making its “best reasonable efforts” to deliver 180 million vaccine doses to the EU in the second quarter of this year, for a total of 300 million in the period from December to June.

But AstraZeneca said in a statement on March 12 it would aim to deliver only one-third of that by the end of June, of which about 70 million in the second quarter. A week after that, the Commission sent a legal letter to the company in the first step of a formal procedure to resolve disputes.

“The Commission has started last Friday a legal action against AstraZeneca,” the EU spokesman told a news conference, noting all 27 EU states backed the move.

“Some terms of the contract have not been respected and the company has not been in a position to come up with a reliable strategy to ensure timely delivery of doses,” the spokesman said, explaining what triggered the move.

Under the contract, the case will need to be resolved by Belgian courts.

“We want to make sure there is a speedy delivery of a sufficient number of doses that European citizens are entitled to and which have been promised on the basis of the contract,” the spokesman said.

“Every vaccine dose counts,” EU health commissioner Stella Kyriakides said on Twitter, announcing the legal proceedings against AstraZeneca.

Germany, France and Hungary were among EU states that were initially reticent to sue the company, diplomats said, but eventually they supported the move.

The EU wants AstraZeneca to deliver the promised 300 million doses, but in a further sign of its irritation towards the company, it has already forgone another 100 million shots that it had an option to buy under the contract signed in August.

(Reporting by Francesco Guarascio; additional reporting by Marine Strauss; Editing by Alex Richardson and Bernadette Baum)

Oxford COVID-19 Vaccine Tech Maker Vaccitech Targets $613 Million Valuation in U.S. IPO

The company, which has development programs for conditions including hepatitis B, prostate cancer and non-small cell lung cancer, has raised $216 million to date from Gilead Sciences, Sequoia Capital China and Oxford Sciences Innovation among others.

The UK-based company, spun out of Jenner Institute at the Oxford University in 2016, said it plans to list its American Depositary Shares (ADS) on Nasdaq under the ticker symbol “VACC”.

It said it was offering 6.5 million ADSs, each representing one ordinary share, priced between $16 and $18 each. At the top end of the range, the IPO would rake in $117 million for Vaccitech.

The company intends to use proceeds from the offering to fund its ongoing clinical programs and its early-stage research and development.

Morgan Stanley, Jefferies, Barclays, William Blair and H.C. Wainwright & Co are the underwriters for the offering.

(Reporting by Niket Nishant and Manojna Maddipatla in Bengaluru; Editing by Shinjini Ganguli)

Stocks Mixed After Inflation Exceeds Analyst Expectations

Inflation Rate Increased By 2.6% In March

The U.S. has just released Inflation Rate and Core Inflation Rate reports. The reports indicated that Inflation Rate increased by 2.6% year-over-year in March compared to analyst consensus which called for growth of 2.5%. Core Inflation Rate increased by 1.6% year-over-year compared to analyst consensus of 1.5%.

Inflation is moving higher on a year-over-year basis as prices were weak during the acute phase of the coronavirus crisis a year ago. Inflation looks more calm on a month-over-month basis although it also exceeded analyst expectations. Inflation Rate grew by 0.6% month-over-month in March compared to analyst consensus of 0.5%, while Core Inflation Rate increased by 0.3%.

S&P 500 futures are swinging between gains and losses in premarket trading after the release of inflation reports. Meanwhile, Treasury yields failed to gain additional upside momentum after reports indicated that inflation exceeded analyst expectations.

U.S. Recommends Pausing The Use Of Johnson & Johnson’s COVID-19 Vaccine

Shares of Johnson & Johnson found themselves under pressure in premarket trading after U.S. health agencies called for a temporary pause of the use of the company’s coronavirus vaccine.

The problems of Johnson & Johnson are similar to AstraZeneca‘s problems. In rare cases, recipients of the vaccine developed blood clots.

While these cases are extremely rare, the negative headlines may decrease people’s confidence in vaccination in general, so Johnson & Johnson’s problems may serve as a bearish catalyst for the market.

Euro Area Economic Sentiment Declines

Today, EU reported that Euro Area ZEW Economic Sentiment Index decreased from 74 in March to 66.3 in April. Analysts expected that it would grow to 77. In Germany, Economic Sentiment Index declined from 76.6 to 70.7 compared to analyst consensus of 79.

The reports indicated that European businesses have started to feel the pressure from the third wave of the virus. At the same time, it should be noted that ZEW Economic Sentiment Index remains at high levels.

For a look at all of today’s economic events, check out our economic calendar.

What is next for US stock market and dollar?

SP500 index is now up more than +9% year-to-date, while the Dow is up +9.5% and the Nasdaq is up more than +7%. Bulls remain committed to their outlook for an economic boom, all of which is underpinned by the U.S. Federal Reserve’s continued easy monetary policies.

Fundamental analysis

Federal Reserve and monetary policy

Federal Reserve Chairman Jerome Powell reiterated last week that the Fed would continue to remain extremely accommodative until the economy has further recovered. Speaking during an IMF event, Powell pointed out that while parts of the economy are recovering strongly, “there’s a very large group of people who are not.”

The Fed Chair acknowledged the better than expected job gains in March and said the Fed would consider a string of similar monthly gains to progress. Also, Powell again pointed to the weak labor market participation rate as a disinflationary force that will keep temporary price spikes under control. What Powell seems more concerned about is the ongoing pandemic and rising infections across many parts of the world, noting that the “world economy” can’t return to normal until the virus is under control everywhere.

Vaccination

Keep in mind, many of our largest U.S. businesses get +40% or more of their revenue from the global economies. Obviously, it is going to take more widespread vaccination and better efforts in other countries to orchestrate a global recovery. The U.S. remains one of the leaders in vaccinations but there might be a little hiccup the next week or two, as Johnson & Johnson has run into some manufacturing snafus. The CDC said -85% fewer doses of the company’s vaccine will be shipped to states next week, though they did not provide a reason.

Around 15 million J&J doses had to be destroyed because of an ingredient mix up at a factory late last month. Traders are also keeping an eye on developments surrounding AstraZeneca’s Covid-19 vaccine which has been suspended in several country’s due to a possible link to blood clots. Unfortunately, the AstraZeneca drug is the dominant vaccine in use across the globe because of its lower cost and easier distribution. Most advanced economy countries that are using AstraZeneca’s drug also have vaccine supplies from other drug makers but the suspension will still mean a slowdown for vaccine rollouts in many parts of Europe and Asia.

AstraZeneca’s safety issues could mean no vaccine supplies at all for some developing countries where it’s the only option. An underlying concern is that these compounding safety issues, shot suspensions, and other hiccups could lead to an overall “crisis of confidence” in vaccine campaigns, meaning fewer people getting inoculated and delaying the global end to the pandemic.

News and data to watch

Next week brings the Consumer Price Index on Tuesday; Import/Export Prices and the Fed’s Beige Book on Wednesday; Empire State Manufacturing, Retail Sales, Industrial Production, Business Inventories, and the NAHB Housing Market Index on Thursday; and Housing Starts on Friday.

The main focus next week will likely be on Q1 earnings, with the season “unofficially” kicking off with results from big Wall Street banks Goldman Sachs, JPMorgan Chase, and Wells Fargo on Wednesday, followed by Bank of America, Citigroup, and U.S. Bancorp on Thursday.

SP500 technical analysis

sp500 technical analysis

So far SP500 futures still didn’t break above Gann’s resistance. Yet the weekly closing looks very strong. But we can consider longs at this stage only if this resistance turns into support. In that case, 4250 is the natural magnet. However, I am a bit skeptical it may happen.

I like to trade SP500 when Advance Decline Line and cycles give the same signal. At the moment, it is better to pay attention to commodities. There are few markets ready for big moves. At the same time, SP500 cycles turned to the downside, while ADL is very bullish. If we will see a divergence in ADL in coming week or two, I will look for a sell signal. But at the moment, nothing is clear yet.

Dollar Index (DXY) technical analysis

dollar forecast

Overall, the Federal Reserve policy remains bearish for American currency in the long run. But we don’t have a strong fundamental setup to establish swing trades. So, I want you to pay attention to the smaller time frame. The dollar index (DXY) respects 4h MA50 and MA200 quite well. So, we can take advantage of that.

If the price breaks and sustains under 91.90, the price will reach 91.5 and 91 in extension. On the other hand, breaching the 4h MA50, the dollar will target the 93 – 93.5 zone.

For a look at all of today’s economic events, check out our economic calendar.