Novavax Is Down By 6%, Here Is Why

Key Insights

  • Novavax vaccine gets approval in Japan, but the news fails to provide any support to the stock. 
  • Vaccine stocks remain under pressure as traders worry that demand for coronavirus vaccines will decline in the upcoming years. 
  • Novavax is cheap at just 4 forward P/E, but falling earnings estimates signal that analysts remain concerned about the company’s future performance. 

Novavax Stock Declines Amid Broad Weakness In Vaccine Stocks

Shares of Novavax  moved to yearly lows after Japanese Health Ministry committee approved the company’s coronavirus vaccine.

While the news is positive for Novavax, the market believes that the company is “late to the party”. The world’s focus is moving away from the coronavirus pandemic, and it remains to be seen whether vaccines will enjoy strong demand in 2023 and beyond.

Shares of other vaccine makers are also under pressure during the current trading session. Moderna stock is down by 4%, while BioNTech stock is down by almost 7%.

It should be noted that recent reports about a potential waiver of intellectual property rights for coronavirus vaccines and treatments also put pressure on vaccine-related stocks.

What’s Next For Novavax Stock?

Analysts expect that Novavax will report earnings of $22.84 per share in the current year and earnings of $14.36 per share in the next year, so the stock is trading at just 4 forward P/E.

However, analyst estimates have declined materially in recent months, and traders are worried that they could move lower. In addition, it is not clear whether demand for coronavirus vaccines will stay strong in the upcoming years.

Earnings visibility is a problem for all vaccines makers, but Novavax stock is under more pressure as the company’s vaccine has lost competition for market share.

In this light, it remains to be seen whether speculative traders will try to “catch the falling knife” and buy Novavax stock at yearly lows. At this point, it looks that the stock has a good chance to develop additional downside momentum in the upcoming trading sessions.

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

With Investors Flocking to Early-Stage Pharma, Here are 4 Stocks to Consider

The market growth is driven by frequent research and development of new medicines and commercialization. In 2021 alone, the FDA approved 55 new drugs.

The pandemic has brought this industry to the center stage with companies exploring coronavirus treatment and vaccine options. On the other hand, the investing world is also changing. Early-stage biotech businesses are gaining traction and providing investors with appealing opportunities. Investing in early-stage pharma has the potential to produce lucrative financial returns.

Many of the best biotech companies have substantial therapeutic candidate pipelines as well as market-leading products. According to the IQVIA 2018 report, emerging biopharma companies account for almost 80% of the entire drug development pipeline in the industry.

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Source: IQVIA

Despite the promising prospects for early-stage biotech companies, it should be noted that these companies are prone to substantial revenue swings. Investors should pay particular attention to the stage of development that each of a biotech company’s drug prospects is in.

To produce novel pharmaceuticals, biotech companies go through four phases: drug discovery, preclinical testing, clinical testing, and regulatory approval. Investing in early-stage biotech companies can result in positive returns if the medication being developed ends up reaching the commercialization stage and goes on to capture market share quickly.

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Most biotech companies are researching and developing multiple drugs at any given point in time which provides the company with multiple revenue streams and safe investment opportunities for investors. Here are four biotech stocks to look out for as the industry enters a massive growth phase.

Adagio Therapeutics (NASDAQ: ADGI)

Adagio Therapeutics is a clinical-stage biopharmaceutical company established in the United States that specializes in the discovery, development, and commercialization of antibody-based therapies for infectious diseases. The pharma company is currently focusing on the development of SARS-CoV-2 antibodies.

The ADG20 (adintrevimab), a neutralizing antibody in Phase 3 clinical trials for the treatment and prevention of COVID19, is the company’s lead product candidate. The company recently reported that the medicine shows neutralizing effect against the Omicron variant as well. Adagio also plans to address existing and future COVID19 variants while focusing on the development of new drugs to combat potential pandemics in the future.

InnoCan Pharma Corporation (CSE: INNO | OTCQB: INNPF | FSE: IP4)

InnoCan Pharma, an Israeli specialized pharmaceutical company founded in 2018, is a leader in the development of new CBD delivery systems. Cannabis and other cannabinoid drugs are routinely used to treat illnesses and alleviate symptoms. The company develops products that combine the unique capabilities of CBD with other medicinal substances and is also focused on selling CBD-based solutions supplied via smart delivery systems to treat CNS cell damage, as well as muscle and rheumatic pain.

The company recently expanded into veterinary medicine as well. This expansion has allowed InnoCan to commercialize its intellectual property portfolio which includes more than 15 patents. CBD’s success in treating a wide range of illnesses is well documented. This means that there is the possibility of increased use of CBD in the medical and healthcare industries and the development of innovative delivery systems in the near future.

InnoCan’s technology commercialization made tremendous progress in 2021 aided by exclusive and non-exclusive licensing deals, and investors may see significant value in InnoCan’s present pipeline of technological and pharmaceutical products and solutions.

Axsome Therapeutics, Inc. (NASDAQ: AXSM)

Axsome Therapeutics is a biopharmaceutical company based in the United States that develops innovative medicines for central nervous system (CNS) disorders. AXS-05 is Axsome’s lead drug candidate, a therapeutic for the treatment of major depressive disorders and resistant depression disorders. AXS-05 is in Phase III clinical trials to treat Alzheimer’s disease agitation and has completed a phase II clinical trial for the treatment of smoking cessation.

The product pipeline of the company also includes three other late-stage drug candidates. AXS-07 is an oral drug for the treatment of acute migraine that has completed two Phase III trials and is expected to be approved by the FDA in 2022. The company is also working on AXS-12 to treat narcolepsy, which is in a Phase III study, and AXS-14 for the treatment of fibromyalgia that’s in a Phase III trial. Axsome plans to submit for FDA approval of AXS-14 for the treatment of fibromyalgia in 2023. Axsome Therapeutics is an appealing biotech stock given the revenue potential of these drug candidates.

BioNTech SE (NASDAQ: BNTX)

BioNTech is a biotechnology company based in Germany that develops and produces active immunotherapies for cancer and other infectious disorders. The company is primarily focused on patient-specific immunotherapies for the treatment of cancer. BioNTech is also one of the pharma companies that significantly benefited from the pandemic as it collaborated with Pfizer, Inc. (PFE) to develop a Covid vaccine.

BioNTech and InstaDeep Ltd recently announced the development of a new computational approach that analyses global sequencing data and predicts high-risk SARS-CoV-2 variants. This system can detect potentially high-risk variants entered into SARS-CoV-2 sequencing data repositories in less than a day by combining structural modeling of the viral spike protein with the help of AI technology.

Conclusion

Investing in biotechnology/pharma stocks is a high-risk, high-reward proposition. The least risky biotech companies have medicines that are already on the market and many more that are in the final stages of testing. However, young companies that are beginning to show successful signs of future commercialization are the ones that appeal the most to growth investors who are focused on multi-bagger returns.

Biotech companies that are developing, manufacturing, and selling more than one medication are likely to be the most profitable, and the companies introduced in this article are a few of the names every investor should closely follow.

When Will S&P500 Find Direction?

I’ve heard a lot of technical talk that the S&P 500 could slosh around in this 4,200 to 4,600 range until it finds new direction.

Ukraine is still in the focus

The focus lately has been the war in Ukraine and the Federal Reserve, both of which continue to exacerbate investor uncertainty. While Russia shows no signs of backing off in Ukraine, there hasn’t been too much change on the ground as Putin’s assault seems to have stalled on several fronts.

In fact, some reports indicate Russia has actually lost a bit of ground in some areas. A few military and political experts say they see hopeful signs in a prisoner exchange that Ukraine and Russia conducted this week, though others remain skeptical that Putin is no where ready to strike a peace deal.

Many experts in the space say the biggest worry is with Putin’s army failing to meet his objectives, he could turn to other even more deadly tactics. The U.S. and EU have been more vocal with their warnings to Russia this week that the use of chemical or biological weapons will bring a strong response from the West. No details have been provided on what that might be and officials behind the scenes have said they are being “deliberately ambiguous” in order to keep Putin off-guard.

Can Fed control the inflation?

As for the Fed, fears are again rising that the central bank will not be able to cool inflation without damaging the economy, particularly with the additional challenges the war has created.

Fed watchers will get a slew of new data to chew on next week, including the PCE Pries Index next Thursday, which is one of the Fed’s favorite inflation gauges. The year-over-year rate in January rose to +5.2% from a previous +4.9% and most expect it will rise again in the February read.

With the Russia-Ukraine conflict compounding the raw materials crunch and Covid lockdowns in China showing signs of jamming up supply chains again, whatever the gauge shows next Thursday, it will likely climb higher in the months ahead. Investors get a look at the U.S. labor market next Friday with the March Employment Report. Consensus is calling for a gain of around +500,000 jobs after a gain of over +675,000 in February.

Investors will be focused more on the wage component which came in flat in January. That helped bring the year-over-year rate down a bit but wages were still up more than +5% vs. February 2021.

Wage inflation is very “sticky” so the higher labor costs climb, the more it limits how much price gains can ultimately moderate.

Data to watch

Other data next week includes advance reads on International Trade, Retail Inventories, and Wholesale Inventories on Monday; the S&P Case-Shiller Home Price Index and Consumer Confidence on Tuesday; the ADP Employment Change and final estimate of Q4 GDP on Wednesday; Personal Income and Outlays and Chicago PMI on Thursday; and ISM Manufacturing and Construction Spending on Friday.

On the earnings front, highlights next week include Chewy, Concentrix, Lululemon, and Micron Technology on Tuesday; BioNTech and Paychex on Wednesday; and Walgreens on Thursday. Russia’s war in Ukraine and the Fed’s war against inflation should remain in the spotlight…

The Big Food Worry… There’s no question food-importing nations are going to feel some major pain. In the USA prices at the grocery store more than likely continue even higher. The world is screaming for more acres and more production but supply chain dislocations along with Russia’s war in Ukraine has fertilizer and input prices sky-high and in some nations in extremely short supply.

Why Moderna Stock Is Up By 18% Today

Key Insights

  • Vaccine stocks rally amid a major coronavirus outbreak in China.
  • Moderna starts a clinical trial of an experimental HIV trimer mRNA vaccine.
  • Earnings visibility remains the key problem for Moderna.

Moderna Stock Rallies As China Faces A New Wave Of Coronavirus

Shares of Moderna gained strong upside momentum after the company announced  that “the first participant has been dosed in a clinical trial of an experimental human immunodeficiency virus (HIV) trimer mRNA vaccine (mRNA-1574)”.

The company noted that while developing a vaccine against HIV has been difficult to achieve, it believed that mRNA technology offered a new opportunity.

The market has been worried that Moderna’s revenues will drop when the coronavirus pandemic comes to an end. The development of the HIV vaccine boosts hopes that Moderna will not be a “one-trick pony”, and the company will ultimately find other sources of revenue.

It should be noted that other vaccine-related stocks like BioNTech and Novavax have also been moving higher today as China was forced to impose new curbs amid the rapid spread of coronavirus in Shenzhen.

What’s Next For Moderna Stock?

Earnings estimates for Moderna have been moving lower in recent weeks. Currently, analysts expect that the company will report earnings of $27.15 per share in 2022. The company’s profits are projected to decline to $10.13 per share in 2023, so the stock is trading at roughly 16 forward P/E for the next year.

It should be noted that earnings visibility remains the key problem for Moderna as it is not clear whether the company will be able to find additional sources of revenue when the revenue from its coronavirus vaccine declines.

While the recent news on the HIV vaccine make a good headline, it should not help Moderna financially in the near future. However, Moderna stock will remain a decent choice for those traders who are willing to bet on the long-term success of the mRNA technology.

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

Why Moderna Stock Is Down By 6% Today

Key Insights

  • Vaccine stocks remain under pressure due to poor earnings visibility
  • Moderna is set to release its earnings report on February 24
  • The stock will need strong upside catalysts to change the current trend

Moderna Stock Falls As Traders Stay Bearish On Vaccine Stocks

Shares of Moderna gained downside momentum after the company announced a 15-year strategic collaboration agreement with Thermo Fisher Scientific, which will produce the company’s coronavirus vaccine and other mRNA medicines in the pipeline.

However, the announcement did not serve as a bearish catalyst for Moderna, and the stock moved lower due to general market pressure and expectations for the end of the pandemic. Other vaccine stocks like BioNTech and Novavax have also found themselves under pressure.

Interestingly, analyst estimates for Moderna’s 2022 earnings have been moving higher in recent weeks. Currently, analysts expect that Moderna will report earnings of $28.32 per share this year, so the stock is trading at just 5 forward P/E.

What’s Next For Moderna Stock?

Poor earnings visibility remains the key problem for Moderna. In the near term, the company’s financial results will be very strong, but the market questions the company’s ability to repeat this performance in 2023 and beyond.

In addition, Moderna is set to release its full-year 2021 report on February 24, so some traders prefer to cut their risks ahead of this event.

To have sustainable upside, Moderna must provide investors with a clear path to future profitability without the current reliance on the coronavirus vaccine. It remains to be seen whether this is realistic in the near term.

In case the market remains skeptical about Moderna’s future revenue, the stock will remain under pressure together with other vaccine stocks. The current market consensus implies that Omicron was the last significant variant of coronavirus, and the end of the pandemic is near. While this scenario is bullish for the world economy, it is bearish for Moderna.

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

Why Moderna Stock Is Down By 13% Today

Moderna Stock Drops As Skepticism About Future Vaccine Sales Grows

Shares of Moderna gained downside momentum after the FDA postponed a meeting on the authorization of Pfizer/BioNTech vaccine for children aged from six months to 5 years.

Moderna stock is already down by more than 70% from the highs that were reached back in August 2021, but there is no rush to buy the stock as traders question the future of vaccine sales.

Currently, analysts expect that Moderna will report earnings of $28.32 per share in 2022, so the stock is trading at 5 forward P/E. However, the market is worried that the company’s earnings will dive in 2023 as demand for vaccines may decrease.

What’s Next For Moderna Stock?

The dynamics of Moderna stock will depend on the market’s evaluation of the future trajectory of the coronavirus pandemic. The recent protests around the world highlighted people’s pandemic fatigue, and political pressure to ease coronavirus-related restrictions is clearly growing.

In addition, the rapid spread of Omicron did not lead to a collapse of the healthcare system, boosting hopes that the pandemic is finally coming to an end. This is bullish for the economy but bearish for the stocks of vaccine makers.

The original enthusiasm towards Moderna’s stock has almost evaporated, and the market is worried that the company is a “one-trick pony”. It is hard to predict the vaccine sales in 2023 and beyond as they will depend on the course of the pandemic and on whether any variants emerge, so traders will likely follow general market sentiment.

At this point, the market completely ignores the coronavirus pandemic and is focused on inflation and Fed’s interest rate decisions. In this environment, Moderna stock may have more room to fall in the upcoming trading sessions, together with other vaccine stocks like BioNTech and Novavax.

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

Why Pfizer Stock Is Down By 6% Today

Pfizer Stock Drops After Q4 2021 Report

Shares of Pfizer gained downside momentum after the company released its fourth-quarter earnings report. The company reported revenue of $23.84 billion and adjusted earnings of $1.08 per share, missing the analyst estimates on revenue and beating them on earnings.

In 2022, Pfizer expects to report revenue of $98 billion – $102 billion and adjusted earnings of $6.35 – $6.55 per share. Revenue guidance for Comirnaty was raised to $32 billion, while the revenue guidance for Paxlovid was initiated at $22 billion.

It looks that market expected stronger guidance from Pfizer, so traders rushed out of the company’s stock. Shares of other vaccine makers have also found themselves under pressure today. Moderna and BioNTech are down by 7-8%, while Novavax stock is losing about 14% of its value during today’s trading session.

What’s Next For Pfizer Stock?

Analysts believed that Pfizer would report earnings of $6.73 per share in 2022, so the company’s guidance of $6.35 – $6.55 per share missed their estimates. Assuming that Pfizer is able to report earnings at the midpoint of its guidance, the stock is trading at less than 8 forward P/E.

While the stock may look extremely cheap, the key question is whether Pfizer will be able to report such earnings in 2023 and beyond when the world gets back to normal after the coronavirus pandemic.

Analysts are skeptical and expect that Pfizer’s earnings will be moving lower in the next several years. The same worries put pressure on shares of other vaccine makers.

Pfizer is a big and diversified company, so its shares are less volatile compared to other vaccine stocks. However, coronavirus-related revenue is very significant for Pfizer stock, so the trajectory of the pandemic will remain the main driver for the shares in the upcoming months.

Pfizer stock has already declined by roughly 20% from the highs that were reached back in December, but it is not clear whether speculative traders will rush to buy the dip. If the market views Omicron as the last major variant of coronavirus, all vaccine-related stocks, including Pfizer, will have more downside.

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

Why Moderna Stock Is Down By 5% Today

Improved Guidance Failed To Provide Sustainable Support To Moderna Stock

Shares of Moderna gained downside momentum today as traders took some profits off the table after yesterday’s rally.

Moderna has recently reported that it expected to record revenue of $18.5 billion from existing contracts for the delivery of COVID-19 vaccine in 2022. The company may also gain approximately $3.5 billion in revenue in case all options are exercised.

For the full year 2021, the company plans to report sales of $17.5 billion. In addition to the production and development of the coronavirus vaccine, Moderna has 40 programs in development, including 23 programs in ongoing clinical studies.

In its press release, Moderna highlighted its non-coronavirus vaccines and therapeutics, which will be vital for the company’s success when the coronavirus pandemic ends. However, it remains to be seen whether the market is ready to take a look at the post-coronavirus potential of Moderna at a time when the world faces a significant wave of Omicron.

What’s Next For Moderna Stock?

Analysts expect that Moderna will report earnings of $27.85 in 2022, so the stock is trading at roughly 8 forward P/E, which is certainly cheap for the current market environment.

However, the market remains skeptical about Moderna’s ability to maintain its revenue in 2023 and beyond. Other vaccine stocks like Novavax and BioNTech have also underperformed in recent weeks.

It remains to be seen whether Moderna will be able to raise revenue guidance for 2022, so that analysts can re-write their earnings forecasts. These forecasts have been improving in recent weeks, but this improvement failed to provide any support to Moderna stock.

At this point, it looks that Moderna stock needs a multiple expansion to have sustainable upside from current levels. However, it is not clear whether the market is ready to assign a higher price tag for the stock at a time when its 2023 revenues remain a mystery.

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

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.

HACK: Massive Opportunity Going Into 2022

When you compare the performance of cyber security ETFs to their technology heavyweights like Invesco QQQ ETF (QQQ) or the Technology Select Sector SPDR ETF (XLK), it becomes evident that Wall Street is probably underestimating the potential of the cybersecurity industry in 2022. For the sake of this comparison, I considered the ETFMG Prime Cyber Security ETF (HACK) and iShares Cybersecurity and Tech ETF (IHAK) as shown below, but there are others too.

https://static.seekingalpha.com/uploads/2021/12/27/49663886-1640601244360989.png

Source: tradingview

The above charts show that both the two cybersecurity ETFs have underperformed their technology peers by more than 20%, despite holding stocks that are active in the fight against network malware and computer viruses, similarly to biotechs like BioNTech (NASDAQ:BNTX) and Moderna (NASDAQ:MRNA) producing cures to address the coronavirus threat.

Now, antivirus companies have been around for years, even decades, but the problem is that the threat level has increased exponentially as from the end of 2020 when Microsoft’s (NASDAQ:MSFT) was hacked through the supply chains attack when hackers made use of SolarWinds(SWI)monitoring software. Moreover, as shown by the high degree of sophistication of the recent ransomware attacks impacting colonial pipeline where millions of dollars of ransom money had to be paid to attackers, there is the involvement of bad actors at the nation-state level.

This is synonymous with aggression against the U.S., thus prompting the Biden administration to come up with a Cybersecurity executive order in May literally “forcing” federal agencies to boost IT defenses. As a result, public institutions have started to increase related expenses.

As for private institutions, they are also at a higher degree of risk due to the rapid adoption of the cloud, with workloads now also residing on employees’ laptops at home, making them more vulnerable to hacking as they are less protected by centralized corporate firewalls. Hence, there are multiple threat vectors facing CIOs, with many large enterprises reassessing their approach to cybersecurity altogether.

Hence relative underperformance in 2021 and an escalated threat landscape have created a massive opportunity for well-positioned cyber security vendors with the right products and proposition. For this matter, companies that come to mind are Cisco (NASDAQ: CSCO), Palo Alto (NASDAQ:PANW), and Fortinet (NASDAQ:FTNT), with their sophisticated zero trust protection (“ZTP”) mechanism. ZTP, in a way, resolves the problem which cannot be solved by the more traditional perimeter fencing security where the corporation is protected assuming it to be functioning within four walls. This is far from being the case in the current decentralized/WFH environment. Exploring further, HACK holdings also include companies that provide IT security for a wide variety of purposes including desktop as well as their web infrastructures.

https://static.seekingalpha.com/uploads/2021/12/27/49663886-16406012442883983.png

Source: etfmg.com

Thinking aloud, unless you are prepared to invest in these individual stocks which implies tracking their performance on a regular basis, HACK provides you with the ability to invest in more than one, namely through an ETF. Another advantage is that it tracks the Prime Cyber Defense Index (PCYBERNR), which provides a benchmark for investors interested in tracking companies actively involved in providing cyber security technology and services. Its holdings also include companies involved in security protocols applied to private and public networks and mobile devices in order to provide integrity of data protection.

Along the same lines, the fund managers review holdings on a quarterly basis for eligibility purposes, with the weights (percentage of assets occupied by a holding) being reset accordingly.

Finally, nearly two years after the advent of Covid, many companies are still in the process of transforming their operations to optimize on the cloud paradigm and should subsequently increasingly focus on the security aspect as a lesser portion of IT workloads remains in corporate datacenters. For this purpose, HACK’s holdings should profit as part of the broader cyber security industry over the next ten years as the market size which was $183.34 billion in 2020 reaches $539.78 billion in 2030.

Calculating a target share price for the end of 2022, based on an appreciation of just 20%, HACK should reach $73.5-$74. This uptrend should however witness a lot of volatility as most cybersecurity names are considered as growth stocks and should be adversely impacted as inflation pressures continue to prevail in the first half of 2022.

 

Why Moderna Stock Is Up By 23% Today

Moderna Stock Rallies As Traders Focus On The New COVID-19 Variant

Shares of Moderna gained strong upside momentum on worries about the new variant of coronavirus.

S&P 500 is down by almost 2% today, but vaccine stocks are rallying. BioNTech is up by 19%, Pfizer gains 6% while Novavax is up by 10%.

The emergence of the new variant will likely boost demand for vaccines as countries rush to vaccinate their residents or to provide boosters for them. While it remains to be seen whether existing vaccines work well against the new variant, the world has little options to choose from, so countries will likely be forced to bet on increased vaccine adoption.

What’s Next For Moderna Stock?

Moderna stock received strong support today as traders were trying to find a way to protect their funds against the risks posed by the new variant of the virus. In this environment, vaccine stocks served as safe-haven assets.

Analysts expect that Moderna will report earnings of $25.76 per share in 2021 and $26.21 per share in 2022, so the stock is trading at roughly 13 forward P/E. As usual, the key question is whether Moderna will be able to enjoy strong demand for its vaccine in the next few years.

Back at the beginning of November, Moderna stock made an attempt to settle below the $210 level but managed to gain upside momentum and is currently trying to settle above the $340 level.

The near-term dynamics of Moderna stock will depend on the developments on the coronavirus front. In case the new variant is a real threat, the stock will have a good chance to gain additional upside momentum.

In fact, Moderna stock may get additional support even in the scenario when the current panic turns out to be unjustified. The emergence of a new variant with many mutations has already highlighted major risks, so demand for vaccines will likely increase in any scenario.

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

Explainer-What to know about the COVID-19 vaccine for U.S. children

By Carl O’Donnell and Michael Erman

NEW YORK (Reuters) – The COVID-19 vaccine for children aged 5 to 11 from Pfizer Inc and BioNTech SE has been authorized by the U.S. Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention.

Here is what you need to know about the vaccine and children:

When will COVID-19 vaccines be available for 5- to 11-year-olds?

Some shots will be ready as soon as Wednesday but appointments will become increasingly available the week of Nov. 8.

Where will the shots be available?

Depending on the state, in pediatricians’ offices, pharmacies and schools. Some states are also setting up mass vaccination centers and mobile vaccination clinics to increase access to shots for children.

National pharmacy chains Walgreens Boots Alliance and CVS Health will start offering them on Saturday and Sunday.

Is it the same vaccine as the adult one?

Yes, but at a lower dose. Pfizer and BioNTech have asked for authorization of a 10-microgram dose of the vaccine, a third of the dose size given to people 12 and older. It is still a two-shot vaccine, with doses given around three weeks apart.

What if my child is a small 5-year-old, or a big 11-year-old? Should they get the children’s dose?

The dose is based on age and not weight, according to Brittany Kmush, an epidemiologist and professor at Syracuse University. “Vaccines are different than medication in the dosing strategy and it has more to do with the maturity of the immune system rather than weight or metabolism,” she said.

Is it safe?

Safety data from more than 3,000 children who received the vaccine in Pfizer’s 4,500 participant clinical trial was generally comparable to that for 16- to 25-year-olds. The most common side effects for children included fever, headaches and chills, which were generally reported less frequently and were milder than for 12- to 15-year-olds.

Both the Pfizer/BioNTech and Moderna Inc vaccines have been linked to rare cases of heart inflammation called myocarditis, especially in young men.

Still, Pfizer suggested that the rate of myocarditis in the age group is likely to be lower than observed in vaccinated 12- to 15-year-olds due in part to the lower dose.

Does it work?

Pfizer and BioNTech said last month their COVID-19 vaccine induced a robust immune response in the 5- to 11-year-olds in its clinical trial. The companies also said the vaccine showed 90.7% efficacy against COVID-19 in the same group.

If children are less likely to get seriously ill from COVID, why bother vaccinating them?

Pediatric vaccination is a public health tool to prevent infectious diseases, even ones that do not have high rates of mortality or hospitalization in children. Children in the United States already receive vaccines for illnesses that have similar or lower levels of related mortality in kids, like hepatitis A, chickenpox, rubella and rotavirus. Children can spread COVID-19 to other, higher-risk groups even if they do not have symptoms.

 

(Reporting by Carl O’Donnell and Michael Erman; Editing by Richard Chang, David Gregorio and Mark Heinrich)

Why Moderna Stock Is Up By 4% Today

Moderna Stock Gains Ground As The Company Is Expected To Take A Big Share Of Vaccine Market In 2022

Shares of Moderna gained upside momentum after a Financial Times report indicated that Pfizer/BioNTech and Moderna will control 3/4 of non-China coronavirus vaccine market in the next year.

According to the report, Moderna is projected to make $38.7 billion in revenue due to demand for booster shots in developed countries.

Moderna stock has declined from all-time highs at $497.49 to the $300 level as traders questioned whether the company’s valuation is justified, but the stock managed to find buyers in recent weeks and is currently trying to settle above the $335 level.

What’s Next For Moderna Stock?

Earnings estimates for Moderna have slightly improved compared to the levels seen at the beginning of the month. Currently, analysts expect that Moderna will report a profit of $29.34 per share in 2021 and $27.28 per share in 2022, so the stock is trading at roughly 12 forward P/E which is cheap for the current market environment.

The sustainability of Moderna’s revenue remains the main question for traders and investors. If Moderna can generate strong earnings in the next few years and use its revenue to expand the business into other areas in order to ensure the firm’s financial health after the end of the coronavirus pandemic, its shares look attractive at current levels.

The report from Financial Times may serve as a significant catalyst for the stock which has found itself under material pressure after Merck announced positive results of its antiviral drug. Merck plans to produce at least 20 million courses of its drug in 2022, so the world will still have to rely on initial vaccination and booster doses which is bullish for Moderna. If the market stays focused on the recent revenue forecast from the Financial Times report, the stock will have a good chance to develop additional upside momentum in the upcoming trading sessions.

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

Merck COVID-19 Pill Success Slams Moderna Shares, Shakes Up Healthcare Sector

Merck shares jumped as much as 12.3% and hit their highest level since February 2020 after data showed the company’s pill molnupiravir  could halve the chances of dying or being hospitalized for those most at risk of contracting severe COVID-19. Experts hailed the news as potentially a huge advance in the fight against COVID-19.

At the same time, shares of vaccine makers such as Moderna Inc, Pfizer Inc and partner BioNTech SE were hit, with some analysts saying the promise of an oral drug that can be taken at home could change the public perception of risks associated with COVID-19.

“We see modest perceived headwind to vaccine stocks such as MRNA (Moderna) if the market thinks people will be less afraid of COVID-19 and less inclined to get vaccines, if there is a simple pill that can treat COVID-19,” Jefferies analyst Michael Yee said in a client note.

Moderna shares tumbled 13% in midday trading, while Pfizer, which is developing a COVID-19 pill of its own, fell 1.3%. U.S. shares of BioNTech dropped 11%.

For Moderna investors, the Merck news presented an opportunity to lock in gains after an already stunning run. Shares of Moderna, which were added to the S&P 500 in mid July, remain up some 220% in 2021 despite Friday’s declines. BioNTech’s shares were also still up about 200% for the year, even with Friday’s fall. The Merck news is a “great reason for folks to be taking profits off the table” in Moderna and BioNTech shares, said Sahak Manuelian, head of equity trading at Wedbush Securities. “These moves can get exacerbated to the downside given the momentum they have had to the upside.”

Shares of other companies with COVID-19 vaccines also fell, with AstraZeneca down 2% and Novavax falling 16%.

Companies with other COVID-19 therapies that are administered intravenously or through injection also traded lower, with Regeneron Pharmaceuticals In down nearly 5% and Gilead Sciences Inc off about 2%.

Healthcare was the only one of the 11 S&P 500 sectors in negative territory in mid-day trading, falling 0.5%. “We see molnupiravir, with its oral format as a clear game changer that is likely to meaningfully impact not just the treatment paradigm for COVID-19 but also has potential utility in the prevention setting,” Piper Sandler analyst Christopher Raymond said in a research note.

Merck is conducting a late-stage trial to see if its antiviral pill can prevent COVID-19 infection, in addition to the study that showed it can significantly cut hospitalization and death in those already infected.

Merck, whose shares were last up about 9%, leads the race in developing the first oral antiviral medication for COVID-19. Rivals such as Pfizer and Swiss drugmaker Roche Holding AG with partner Atea Pharmaceuticals Inc are running late-stage trials of their pills. Atea shares were up 19%.

Merck, which discontinued its own COVID-19 vaccine program, had seen its shares fall about 4% for the year through Thursday, before they moved into positive territory for 2021 on Friday.

“Merck has kind of been dead in the water to investors for the past couple of quarters,” said Kevin Gade, portfolio manager with Bahl & Gaynor, which owns Merck shares. “This shows their R&D engine is not dead and they were first … in what could be a multi-billion dollar opportunity.”

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

(Reporting by Lewis Krauskopf in New York and Manojna Maddipatla in Bengaluru; Editing by Ira Iosebashvili and Bill Berkrot)

Pfizer Close to Long-Term Buying Opportunity

Pfizer Inc. (PFE) and BioNTech SE (BNTX) released positive data on their COVID-19 vaccine for ages 5 to 11 on Monday but the stock is losing ground with the broad market, adding to a five-week slide that’s already relinquished more than 16%.  The decline is roughly tracking the slow rollover of U.S. Delta infections and another slowdown in daily vaccinations. Last week’s FDA advisory meeting didn’t help, with the group declining to recommend broad-based booster shots.

Pulling Back from August Breakout

The pharmaceutical giant has gained 17% so far in 2021 despite the latest downturn, with a good portion of selling pressure generated by a rotation out of pandemic plays. However, the last six months have proved how difficult it will be to transition from pandemic to endemic, especially with billions around the world still unvaccinated. Taken together with Pfizer’s bullish breakout pattern, the current decline should offer a low risk buying opportunity.

Approval for ages 5 to 11 will open eligibility to more than 50 million new vaccinations in the EU and USA. As the business partners noted on Monday, “Pfizer and BioNTech plan to share these data with the FDA, European Medicines Agency (EMA) and other regulators as soon as possible. For the United States, the companies expect to include the data in a near-term submission for Emergency Use Authorization (EUA) as they continue to accumulate the safety and efficacy data required to file for full FDA approval in this age group.”

Wall Street and Technical Outlook

Wall Street consensus is surprisingly lukewarm, with a ‘Hold’ rating based upon 4 ‘Buy’, 15 ‘Hold’, and 1 ‘Underweight’ recommendation. No analysts are recommending that shareholders close positions. Price targets currently range from a low of $39 to a Street-high $61 while the stock is set to open Monday’s session on top of the median $44 target. While this placement indicates that Pfizer is fairly-valued, it’s also likely that analysts are underestimating the vaccine’s long-term revenue potential.

Pfizer topped out at 44.05 in 2018 and sold off to a six-year low during 2020’s pandemic decline. A volatile recovery finally reached the prior peak in August 2021, setting off an immediate breakout that posted an all-time high at 51.86 less than three weeks later. The pullback into September is now approaching a zone of strong support near 40, raising odds for a buy-the-dip wave that confirms the breakout and sets the stage for strong 2022 upside.

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

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

Sweetwood Capital Monthly Market Insights

August was mostly positive for risky assets of the major developed economies with lower volatility in the background. On the other hand, safe assets such as investment grade bonds, were trading lower, with the benchmark 10-year Treasury yield starting the month below 1.20% and ending it above 1.30%.

Despite the fast spreading of the Delta variant and the vaccines’ declining efficiency against infection, global data continues to reflect optimism: consumption spending remains high, and we are witnessing a shift from goods to services lately. Two signals confirming that the recovery is on the right path. Also, since the Pfizer/BioNTech Covid-19 vaccine received FDA’s full approval, reopening is expected to accelerate further.

Two huge plans advanced in the US Congress during the summer: the infrastructure bill of $1 trillion, the largest federal investment into infrastructure projects ever made, and the reconciliation bill of $3.5 trillion, which is a social plan that Democrats will try to pass without Republicans’ support. This huge federal cash deployment will be highly supportive to sectors such as infrastructure, electric vehicles, cybersecurity and 5G.

Last week, the Jackson Hole Symposium, the annual Fed members summit in Wyoming, was held virtually, for the second consecutive year. This meeting focused on inflation and unemployment. After Chairman Jerome Powell stated that the economic recovery from the pandemic has exceeded expectations, he confirmed that the time has come to tighten the Fed’s purchase program. Therefore, tapering is now highly likely before the end of the year, while a rate hike is still not expected before 2023.

According to Powell’s statement, the supply chain disruptions (shortages and bottlenecks) alongside wage increases are still the main source of inflation. The spike in some prices is impacting only goods and services affected by the pandemic yet, and this trend tends to disappear with time (for example used cars prices). As for wages, the increase is welcome because it supports a rising standard of living, and it is still consistent with the long-term inflation target.

After the summer break, September will see the return of Central Banks’ meetings. From the Fed we expect more details regarding the upcoming tapering: when exactly, what, how much etc. Of course, a huge focus will be put on the August jobs report, that needs to confirm the “substantial progress” made in the labor market in July. September will also mark the end of the enhanced unemployment benefits from Covid-19, and so we may well have a wave of people returning to work in the US. The ECB’s meeting may be focused on inflation, since the last data released this week showed an unexpected 3% inflation rate in Eurozone, the highest level since 2011.

News from China was less dramatic this month, but the momentum has not yet returned to Chinese stocks. Some investors are starting to think that the new regulatory measures are now coming to an end, but the vast majority still await concrete positive moves in order to build back a bullish sentiment and bring capital back to the world’s second largest economy.

In terms of earnings, it was another strong quarter: 87% of S&P 500 companies reported positive surprises for EPS (earnings per share) and revenue. However, in terms of future guidance, it was split: about half the companies warned of slowing growth for the coming quarters but that’s to be expected after the boom experienced in some sectors during the pandemic.

While closing a seventh straight winning month, it’s hard to remain in the skeptical zone. Also, since the Fed remains very transparent and tapering has been highly predictable for quite some time now, we don’t expect any “tapering tantrum”, as we experienced in 2013. We continue to see stocks more appealing than bonds, and the fact that major financial institutions recently increased their target for US equity indexes comforts us in our overweighting choice.

As always, risk-management combined with rigorous sector and geographical diversification will remain key factors for investment performance.

You are more than welcome to contact us to discuss our investment views or financial markets generally.

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

Zoom Dead Money So Far in 2021

Zoom Video Communications Inc. (ZM) reports fiscal Q1 2022 earnings after Monday’s closing bell, with analysts looking for a profit of $1.16 per-share on $990.2 million in revenue. If met, earnings-per-share (EPS) will mark a 26% profit increase compared to the same quarter last year. The virtual meeting provider has beaten estimates every quarter since coming public in April 2019, posting a 191.4% year-over-year revenue increase in the quarter ending May 31st.

Growing Competition in a Post-Pandemic World

The company continues to diversify its product catalog after 2020’s historic uptrend, driven by pandemic lockdowns around the world. Meanwhile, multiple competitors are offering alternatives to the Zoom platform at the same time that lockdowns have drawn huge political opposition, despite the rise of the Delta variant. It’s been a race against time for Zoom, seeking to replace lost income to maintain its rich valuation and high stock price.

Morgan Stanley analyst Meta Marshall upgraded Zoom to ‘Overweight’ last week, noting “we think that enterprise momentum, combined with margin headwinds dissipating, creates a positive setup into FQ2. While revenue expectations are not low, we believe they are doable, which combined with upcoming Zoomtopia and FY23 guidance in a couple of quarters, leaves us more optimistic on the stock at current valuation”.

Wall Street and Technical Outlook

Wall Street consensus has improved in the last three months, now standing at an ‘Overweight’ rating based upon 14 ‘Buy’, 1 ‘Overweight’, 11 ‘Hold’, 1 ‘Underweight’, and 1 ‘Sell’ recommendation. Price targets currently range from a low of $242 to a Street-high $525 while the stock ended Friday’s session more than $75 below the median $416 target. This low placement highlights investor apathy toward pandemic beneficiaries, most recently illustrated by Peloton Interactive Inc.’s (PTON) steep post-earnings slide.

Zoom broke out above the 2009 high at 107.34 in February 2020, entering an historic uptrend that hit an all-time high at 588.84 in October, just weeks before Pfizer Inc. (PFE) and BioNTech SE (BNTX) announced the success of their vaccine. The stock has posted a long series of lower highs and lower lows since that time, crisscrossing the 200-day moving average and 50% rally retracement repeatedly since March.  Accumulation fell to an 8-month low last week, highlighting slow-motion profit-taking that could easily stretch into the fourth quarter.

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

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

Oil Up 3% on Stronger Demand Outlook; Mexican Oil Rig Outage

Brent crude oil futures were up $2.25, or 3.3%, at $71.00 a barrel by 2:20 p.m. ET (17:20 GMT) while U.S. West Texas Intermediate (WTI) gained $1.92, or 2.9%, to $67.56.

Last week, both benchmarks notched their biggest weekly losses in more than nine months. On Monday, both jumped more than 5%, boosted by a weaker dollar.

A resurgent pandemic has fueled health system concerns; however, “economically harmful containment measures seem rather unlikely”, said Julius Baer analyst Norbert Rucker, citing the effectiveness of vaccines.

On Monday, the U.S. Food and Drug Administration issued full approval for the Pfizer/BioNTech two-dose vaccine, having authorized it for emergency use last December. Officials hope to convince unvaccinated Americans the shot is safe and effective.

Analysts said China’s apparent success in fighting the spread of the Delta variant of the coronavirus also boosted demand sentiment, with no cases of locally transmitted infections in the latest data.

“Concerns are easing that we will not see a global shutdown due to the Delta variant,” said Gary Cunningham, director of market research at Tradition Energy in Stamford, Connecticut.

Also supporting oil prices was a fire on an oil platform off Mexico on Sunday that has cut state-run Pemex’s oil production by about 25% since then. Five workers died and the fire halted 421,000 barrels per day of production.

Prices of heavy sour crude oil grades are rising on the U.S. Gulf Coast, traders said, as the market braces for a disruption of supplies from Mexico.

“The market is getting a tailwind from the PEMEX fire, which has greenlighted this rally,” said Bob Yawger, director of energy futures at Mizuho in New York.

Still, Yawger cautioned that the market could reverse course if U.S. government data on Wednesday shows gasoline inventories increased. Analysts polled by Reuters expect gasoline inventories to fall, but Yawger expects a gain, which could signal a demand lull.

Data from trade group the American Petroleum Institute is expected Tuesday at 4:30 p.m. ET (20:30 GMT), with official data from the Energy Information Administration released on Wednesday at 10:30 a.m. ET (14:30 GMT).

The U.S. Department of Energy on Monday said it would sell up to 20 million barrels of crude from the Strategic Petroleum Reserve (SPR) oil stocks to comply with legislation, with deliveries to take place between Oct. 1 and Dec. 15.

Meanwhile, Indian refiners’ crude throughput in July bounced to its highest in three months as fuel demand rebounded and buoyed prices.

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

(Additional reporting by Jessica Jaganathan in Singapore and Ahmad Ghaddar in LondonEditing by John Stonestreet, David Goodman, David Gregorio and Jonathan Oatis)

Dollar Slips Further as Oil Jumps, Commodity Currencies Gain

Risk appetite in global markets strengthened after the U.S. Food and Drug Administration on Monday granted full approval to the COVID-19 vaccine developed by Pfizer and BioNTech in a move that could accelerate U.S. inoculations.

A bounce in China’s technology sector also contributed to risk-on sentiment that helped boost the Canadian, Australian and New Zealand dollars.

“The euro, Canada and Aussie currencies made new lows for the year last week, and so the dollar is consolidating and its upside momentum has stalled,” said Marc Chandler, a managing director at Bannockburn Global Forex.

The dollar index, which measures the greenback against a basket of six currencies, fell 0.091% to 92.903.

The euro was up 0.08% at $1.1752, while the yen traded down 0.01% at $109.6700.

Rising COVID-19 infections caused by the highly contagious Delta variant have fueled concerns about the recovery from the pandemic. But markets have largely overlooked that this week, with analysts citing thin liquidity as a factor driving apparent swings in risk appetite.

Market attention is focused on the Federal Reserve’s Jackson Hole conference on Friday, at which some investors expect Fed Chair Jerome Powell to hint on a possible timeline for tapering the U.S. central bank’s bond-buying monetary stimulus.

“We think investors will want to wait to hear on this subject from Jerome Powell on Friday before pushing ahead with another major round of risk-buying, dollar-selling,” ING strategists wrote in a note to clients.

COVID-19 case counts are also being watched closely, particularly in China and New Zealand. Outbreaks in China appear to be coming under control while in New Zealand, where monetary policy was put on hold last week due to measures to contain the Delta variant, the lockdown remains in effect.

The Australian dollar, viewed as a liquid proxy for risk appetite, was up 0.7% at $0.7264.

The New Zealand dollar was up 0.9% at a one-week high of $0.6954, boosted by comments from the Reserve Bank of New Zealand’s assistant governor, who said policymakers had actively considered raising rates last week.

The RBNZ left rates on hold at a record low 0.25% but flagged a tightening before the end of the year.

The Norwegian currency was up 0.9% against the euro, with the pair changing hands at 10.3796, while the Canadian dollar was up 0.4% against the U.S. dollar.

Oil prices extended a rally on Monday, driven by a bullish demand outlook after the full approval of the Pfizer-BioNTech vaccine and Mexico suffered a large production outage.

Brent crude oil futures rose 3.2% to $70.94 a barrel.

The rise in oil prices has washed out some of the excessive bearishness towards Canada, Chandler said.

The Canadian dollar hit eight-month lows last week. Out of the major trading currencies, Canada is among the most sensitive to the equity market, Chandler said.

Elsewhere, bitcoin edged back below $50,000, which was breached for the first time since May on Monday. The digital currency was down 2.2% at about $48,456.

(Reporting by Elizabeth HowcroftEditing by David Goodman and Bernadette Baum)

European Shares End Higher on Commodity Recovery After Bruising Week

The pan-European STOXX 600 index closed 0.7% higher after losing nearly 1.5% last week. Oil and mining were the best performing sectors, rising about 2.1% and 1.5% respectively.

Sentiment appeared to have improved after growing uncertainty over when the U.S. Federal Reserve would begin tightening policy, which sparked a broad selloff across global markets last week.

Focus now turns to the Fed’s annual Jackson Hole Economic Policy Symposium beginning later in the week.

“With the Jackson Hole meeting beginning on Thursday, investors may be reluctant to make big new commitments in the next couple of sessions,” Ian Williams, economics & strategy research analyst at Peel Hunt, said.

Data in Europe suggested that business activity remained strong in August, albeit at a slightly slower growth pace than the two-decade peak seen in July.

With a nearly 18% rise so far this year, the STOXX 600 hit a record high earlier this month, but has stumbled recently on concerns over the Delta variant of COVID-19 stalling economic growth.

Among individual stocks, Britain’s second-largest grocer Sainsbury’s jumped 15.4% and was the best performer on the STOXX 600, following a report that private equity firms were circling the company with a view of possibly launching bids of more than 7 billion pounds ($9.5 billion).

Last week, smaller rival Morrisons backed a 7 billion pounds offer from U.S. private equity group Clayton, Dubilier & Rice.

Germany’s BioNTech surged 7.6% after the U.S. Food and Drug Administration granted full approval to the Pfizer Inc/BioNTech COVID-19 vaccine.

Luxury stocks including LVMH, Kering and Moncler clawed back some of last week’s losses after being sold off on China’s wealth redistribution plans.

Switzerland-based Cembra Money Bank plunged 30.9% to the bottom of the STOXX 600 after it terminated its credit card partnership with Swiss retailer Migros.

French lottery operator La Francaise des Jeux fell 1.7% after Goldman Sachs downgraded the stock to “sell”.

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

(Reporting by Sruthi Shankar and Ambar Warrick in Bengaluru; Editing by Shounak Dasgupta and David Holmes)