Why Shares Of Moderna Are Down By 5% Today?

Moderna Video 06.05.21.

Moderna Stock Moves Lower As Q1 Revenue Misses Estimates

Shares of Moderna found themselves under pressure after the company released its first-quarter results.

Moderna reported revenue of $1.94 billion and earnings of $2.84 per share, beating analyst estimates on earnings and missing them on revenue. It looks that the market was not ready to tolerate the revenue miss, and it weighed heavily on Moderna stock.

The bar was set high for the company whose shares were up by more than 60% year-to-date before the release of the quarterly report. In addition, shares of  vaccine makers found themselves under pressure after U.S. signaled that it would support a waiver for vaccine IP rights at the WTO.

EU has already stated that it was ready to discuss waving COVID-19 vaccines patents, which is a worrisome development for investors. At the same time, it remains to be seen whether any decisions will be made in the near term.

What’s Next For Moderna?

The sell-off in Moderna shares was triggered by IP waiver-related fears and a revenue miss. IP waiver-related fears probably served as the main catalyst for the current sell-off as other vaccine makers like BioNTech and Pfizer also found themselves under pressure.

Currently, analysts expect that Moderna will report earnings of $23.27 per share in 2021 and $16.58 per share in 2022 so the stock is trading at about 9 forward P/E for 2022 which is very cheap in today’s market environment.

However, there is a lot of uncertainty regarding future profits, and recent discussions about waiving IP rights add another layer of uncertainty. At the same time, it looks increasingly likely that at least some part of the vaccine revenue will be recurring as people may need regular shots to protect themselves against COVID-19.

In this light, Moderna shares may soon attract speculative traders and investors who will want to use the current pullback as an opportunity to buy the stock at lower levels.

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

Will Earnings Season Bring Volatility To The Stock Market?

The Commerce Department last week reported that the U.S. economy grew at a +6.4% annual rate in the first quarter, slightly below estimates but still strong. If it would have come in real hot and much higher bears would have pointed to fanning the inflation flames even further.

This mindset of “bad-news-could-be-good-news” is helping to keep the stock market at or near all-time highs. If economic data somewhat disappoints it means the Fed stay dovish and accommodative for longer.

Fundamental analysis

That might be important to keep in mind as April data starting this week is expected to be extremely good. The April Employment Report is due next Friday and with upper-end of Wall Street estimates look for upwards of +1 million new jobs being added. Other key April data next week includes the ISM Manufacturing Index on Monday, and the ISM Non-Manufacturing Index on Wednesday.

employment

If the data comes in better than expected the bears will win the nearby battle and have the upper hand when talking higher inflation and the Fed perhaps tightening sooner than anticipated. So this week could be a bit tricky whereas “disappointing-data” could actually be digested as a win for the bulls and “strong data” a win for the bears.

The earnings calendar is packed again next week with big names including Activision Blizzard, Adidas, AllState, Cerner, Cigna, CVS, Dominion Energy, Enbridge, Etsy, Hilton Worldwide, Moderna, Monster Beverage, Nintendo, PayPal, Peloton, Pfizer, Rocket Companies, Square, TMobile, Wayfair, and Zoetis.

COVID-19

Checking in on U.S. progress against Covid-19, the number of adults that have received at least one dose is around 60%-65%, depending on the source. Global cases continue to rise led by India, where new infections have been hitting new record highs every day for weeks now. The country reported a staggering 380k new infections and 3,645 new deaths on Thursday while less than 10% of the population has been vaccinated.

Bottom line, the global restart will not be synchronized like many bulls had hoped would be the case and global growth may continue to struggle. At the moment the U.S. market doesn’t seem to care. It will be interesting to see if increasing inflation and continued global headwinds will eventually come home to roost.

SP500 technical analysis

SP500 earnings season

Earnings season can bring volatility to the stock market. At the beginning of May, cycles turn to the downside. Note, this is only a timing tool and it never shows the amplitude or strength of the move. When cycles are topping, it means we can expect a move down or choppy trading. This is it.

But relying on cycles only is not a good idea. Insider Accumulation Index shows bearish divergence on a daily chart. At the same time, Advanced Decline Line is still strong. The key resistance is around 4250 at the moment. I believe earning season can bring a profit booking to the stock market. If that happens, watch 4000 – 39500. It was a massive resistance and now it might turn into support. Intermarket Forecast is neutral. But if it turns to the downside, we will finally see a pullback in SP500.

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

Earnings to Watch Next Week: ON Semiconductor, Ferrari, General Motors and Moderna in Focus

Earnings Calendar For The Week Of May 3

Monday (May 3)

IN THE SPOTLIGHT: ON SEMICONDUCTOR

ON Semiconductor, a semiconductors supplier company, is expected to report its first-quarter earnings of $0.34 per share, which represents year-over-year growth of over 240% from $0.10 per share seen in the same quarter a year ago.

The Phoenix, Arizona-based company’s revenue would grow over 14% to $1.4 billion.

“The company is the only one in our coverage to see weaker gross margins cycle to cycle. Notably, this is happening despite an improvement in end-market mix toward industrial and autos and away from consumer and computing, where ON has become more selective in recent quarters,” noted Craig Hettenbach, equity analyst at Morgan Stanley.

“We like the message from the new CEO of improving mix of the business but think this has already been reflected in meaningful multiple expansion in the stock. Another thing to consider is the potential for lost revenue as the company deemphasizes some products.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MAY 3

Ticker Company EPS Forecast
ENBL Enable Midstream Partners $0.17
EL Estée Lauder $1.28
WEC Wisconsin Energy $1.47
EPD Enterprise Products Partners $0.50
ON ON Semiconductor $0.34
ITRI Itron $0.40
ALXN Alexion Pharmaceuticals $3.08
L Loews $0.95
CNA CNA Financial $0.95
EPRT Essential Properties Realty Trust Inc $0.29
VRNS Varonis Systems -$0.13
QGEN Qiagen $0.63
RMBS Rambus $0.28
WWD Woodward $0.82
REGI Renewable Energy $0.20
IRBT Irobot $0.06
SCI Service International $0.98
ITUB Itau Unibanco $0.12
FN Fabrinet $1.15
CAR Avis Budget -$2.38
JKHY Jack Henry Associates $0.86
O Realty Ome $0.85
BRX Brixmor Property $0.40
UE Urban Edge Properties $0.22
AWK American Water Works $0.73
NSP Insperity $1.56
APO Apollo Global Management $0.59
RBC Regal Beloit Corporation $1.68
ADC Agree Realty $0.83
CR Crane $1.31
OGS One Gas $1.78
CHGG Chegg $0.31
CVI CVR Energy -$1.23
OHI Omega Healthcare Investors $0.82
XPO XPO Logistics $0.93
FLS Flowserve $0.20
CBT Cabot $0.97
LEG Leggett & Platt $0.41
FANG Diamondback Energy $1.89
SHO Sunstone Hotel Investors -$0.15
KMT Kennametal $0.21
SEDG Solaredge Technologies Inc $1.01
VNO Vornado Realty $0.63
WMB Williams Companies $0.28
AWR American States Water $0.48
MWA Mueller Water Products $0.14
MOS Mosaic $0.50
CC Chemours Co $0.68
LGND Ligand Pharmaceuticals $1.05
CORT Corcept Therapeutics $0.21
CIB Bancolombia $0.34
SANM Sanmina $0.82
EGOV NIC $0.24
AMG Affiliated Managers $4.24

Tuesday (May 4)

IN THE SPOTLIGHT: FERRARI

Ferrari, an Italian luxury sports car manufacturer, is expected to report its first-quarter earnings of $1.26 per share, which represents year-over-year growth of over 27% from $0.99 per share seen in the same quarter a year ago.

The company which is known for its prancing horse logo would post revenue growth of more than 24% to around $1.27 billion

“We find the long-term stability of Ferrari’s revenue, addressable market growth, expansive profit margin, and solid returns on invested capital throughout economic cycles to be compelling reasons to invest at the right price,” noted Richard Hilgert, senior equity analyst at Morningstar.

“Because of its exclusive clientele of high-net-worth individuals, we believe the company will show resiliency during periods of economic uncertainty, such is currently the case with the coronavirus pandemic. While we are not entirely averse to paying up for stocks like Ferrari that possess a wide economic moat and stable economic profits through business cycles, we think Ferrari stock will regularly trade at rich, luxury goods valuation multiples.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MAY 4

Ticker Company EPS Forecast
ARNC Arconic Inc $0.29
CMI Cummins $3.46
CVS CVS Health $1.71
MPLX MPLX $0.61
PFE Pfizer $0.79
SYY Sysco $0.20
TRI Thomson Reuters USA $0.40
MPC Marathon Petroleum -$0.72
NS NuStar Energy $0.28
BR Broadridge Financial Solutions $1.67
ETRN Equitrans Midstream Corp $0.19
DD DuPont $0.77
LDOS Leidos $1.49
D Dominion Resources $1.08
EXPD Expeditors International Of Washington $1.00
RACE Ferrari $1.26
LPX Louisiana Pacific $2.67
CVLT Commvault Systems $0.49
ZBH ZIMMER BIOMET HDG. $1.51
UAA Under Armour Inc $0.04
XYL Xylem $0.37
UA Under Armour C share $0.04
INGR Ingredion $1.62
SEE Sealed Air $0.71
INCY YTE $0.65
BERY Berry Plastics $1.31
LGIH LGI Homes $2.37
BG Bunge $1.55
PCRX Pacira $0.58
RGEN Repligen $0.43
VSH Vishay Intertechnology $0.45
LANC Lancaster Colony $1.26
CTLT Catalent $0.76
KKR KKR & Co LP $0.62
CWH Camping World Holdings $0.54
RHP Ryman Hospitality Properties -$0.78
AME Ametek $1.02
WLK Westlake Chemical $1.56
IAA IAA Inc $0.46
VMC Vulcan Materials $0.41
GPN Global Payments $1.77
IPGP IPG Photonics $1.07
HSIC Henry Schein $0.83
IT Gartner $1.01
CRL Charles River Laboratories $2.19
HEP Holly Energy Partners $0.48
NXST Nexstar Broadcasting $3.11
MLM Martin Marietta Materials $0.51
LAMR Lamar Advertising $1.17
IDXX Idexx Laboratories $1.72
FSS Federal Signal $0.33
MIC Macquarie Infrastructure $0.48
NNN National Retail Properties $0.64
SABR Sabre -$0.51
MYGN Myriad Genetics -$0.10
BEN Franklin Resources $0.74
ZBRA Zebra Technologies $4.41
COP ConocoPhillips $0.57
ETN Eaton $1.25
HI Hillenbrand $0.92
CMP Compass Minerals International $0.72
VRSK Verisk Analytics $1.25
JBGS JBG SMITH Properties $0.31
LYFT Lyft Inc -$0.54
AMCR Amcor PLC $0.18
LSI LIFE STORAGE $1.01
STAG STAG Industrial $0.48
XP XP Inc $0.20
RPAI Retail Properties Of America $0.20
OUT Outfront Media -$0.17
MANT ManTech International $0.83
MED Medifast $2.72
PAYC Paycom Software $1.42
AKAM Akamai $1.30
LSCC Lattice Semiconductor $0.19
ARWR Arrowhead Research $0.34
AFG American Financial $1.74
TTEC TeleTech $1.00
ANET Arista Networks $2.38
GMED Globus Medical $0.36
INSP Inspire Medical Systems Inc -$0.65
ENLC EnLink Midstream -$0.02
IOSP Innospec $1.02
PVG Pretium Resources $0.21
HLF Herbalife $1.06
RDN Radian $0.67
TMUS T-Mobile Us $0.53
ESE ESCO Technologies $0.55
HST Host Hotels & Resorts -$0.15
PKI PerkinElmer $3.03
BKH Black Hills $1.60
ATVI Activision Blizzard $0.69
XLNX Xilinx $0.75
WTS Watts Water Technologies $0.98
AMRC Ameresco $0.10
CZR Caesars Entertainment -$1.77
MCY Mercury General $1.25
MRCY Mercury Systems $0.63
CPK Chesapeake Utilities $1.83
AIZ Assurant $1.96
LPSN LivePerson -$0.14
DOOR Masonite International $1.78
PXD Pioneer Natural Resources $1.82
EQC Equity Commonwealth $0.01
PEAK Healthpeak Properties Inc $0.39
DVN Devon Energy $0.35
RNG RingCentral $0.25
EPAY Bottomline Technologies $0.27
MTCH Match Group $0.46
JAZZ Jazz Pharmaceuticals $3.69
PRU Prudential Financial $2.68
NMIH NMI $0.59
DLB Dolby Laboratories $0.67
HASI Hannon Armstrong Sustnbl Infrstr Cap $0.40
MPWR Monolithic Power Systems $1.33
H Hyatt Hotels -$1.33
WU Western Union $0.45
DEI Douglas Emmett $0.43
EXAS Exact Sciences -$1.04
ALGT Allegiant Travel -$2.59
PTCT PTC Therapeutics -$1.59
Z Zillow $0.26
NRZ New Residential Investment $0.34
LITE Lumentum Holdings Inc $1.42
SU Suncor Energy USA $0.44
MELI MercadoLibre $0.40
HAE Haemonetics $0.67
TDG TransDigm $2.52
IOVA Iovance Biotherapeutics -$0.48
QTRX Quanterix -$0.32
VST Victory Square Tech -$2.04
GRFS Grifolsbarcelona $0.23
BBD Banco Bradesco $0.11
CHT Chunghwa Telecom $0.33

Wednesday (May 5)

IN THE SPOTLIGHT: GENERAL MOTORS

The auto manufacturer is expected to report its first-quarter earnings of $1.02 per share, which represents year-over-year growth of over 64% from $0.62 per share seen in the same quarter a year ago. The Detroit, Michigan-based company would post revenue growth of about 2% to around $33.3 billion.

“We are Overweight based on GM’s diversified portfolio, with multiple ways for GM to enhance shareholder value, through: EVs, ICE and Autonomy. GM also has leading North American margins, generates strong cash flow, and has a robust balance sheet,” noted Adam Jonas, equity analyst at Morgan Stanley.

“We believe that the market is underestimating the SOTP of the GM enterprise via: 1) Legacy ICE, 2) GM EV, 3) GM’s Ultium Battery business, 4) China JVs, 5) GM Finco, 6) GM Cruise, 7) hidden franchise value in brands such as Corvette and 8) GM Connected Services. GM management has a proven track record to allocate capital away from structurally challenged areas towards re-positioning the business model.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MAY 5

Ticker Company EPS Forecast
UTHR United Therapeutics $2.60
HLT Hilton Worldwide $0.05
PNW Pinnacle West Capital $0.28
CERN Cerner $0.74
HFC HollyFrontier -$0.45
ODP Office Depot $1.02
AEIS Advanced Energy Industries $1.27
OMI Owens Minor $0.97
DNB Dun & Bradstreet $0.21
SMG Scotts Miracle-Gro $5.51
DOC Physicians Realty $0.27
WRK WESTROCK $0.62
GOLD Randgold Resources $0.26
TT Trane Technologies PLC $0.62
CIM Chimera Investment $0.31
SRE Sempra Energy $2.60
NYT New York Times $0.15
AVA Avista $0.85
ROCK Gibraltar Industries $0.61
SPR Spirit AeroSystems -$0.93
PEG Public Service $1.12
BWA Borgwarner $0.92
GM General Motors $1.02
JLL Jones Lang LaSalle $0.58
SBGI Sinclair -$2.18
EMR Emerson Electric $0.90
NI NiSource $0.77
ABC AmerisourceBergen $2.50
BRKR Bruker $0.32
FUN Cedar Fair -$1.89
IONS Ionis Pharmaceuticals -$0.47
EXC Exelon $0.42
WAT Waters $1.57
CDW CDW $1.54
CRTO Criteo $0.50
CLH Clean Harbors $0.26
HZNP Horizon Pharma $0.19
SPWR SunPower $0.00
FLEX Flextronics International $0.36
BKNG Booking Holdings Inc -$7.26
QLYS Qualys $0.69
ATO Atmos Energy $2.05
ALL Allstate $3.85
GIL Gildan Activewear USA $0.20
KLIC Kulicke And Soffa Industries $1.20
PTVE Pactiv Evergreen $0.03
LNC Lincoln National $1.48
TTGT TechTarget $0.37
RLJ RLJ Lodging -$0.26
ADPT Adeptus Health -$0.41
PRI Primerica $2.38
ZNGA Zynga $0.09
UNM Unum $1.01
HPP Hudson Pacific Properties $0.46
RUN Sunrun Inc -$0.03
WTRG Essential Utilities Inc $0.66
EPR EPR Properties $0.44
FLT Fleetcor Technologies $2.70
QRVO Qorvo $2.44
UGI UGI $1.72
CDAY Ceridian HCM Holding Inc $0.09
CW Curtiss-Wright $1.30
FMC FMC $1.52
CTSH Cognizant Technology Solutions $0.94
SIMO Silicon Motion Technology $0.94
AEL American Equity Investment Life $0.59
ANSS Ansys $0.85
MET MetLife $1.48
XEC Cimarex Energy $1.70
VAC Marriottacations Worldwide -$0.29
SRC Spirit Realty Capital New $0.73
TNDM Tandem Diabetes Care -$0.15
SJI South Jersey Industries $1.19
EQT EQT $0.28
ETSY ETSY Inc $0.84
MFC Manulife Financial USA $0.59
NBIX Neurocrine Biosciences $0.46
CCMP Cabot Microelectronics $1.94
EQH AXA Equitable Holdings Inc $1.23
MRO Marathon Oil $0.14
CF CF Industries $0.57
STN Stantec USA $0.42
RYN Rayonier $0.08
RSG Republic Services $0.86
FRT Federal Realty Investment $1.02
PDCE PDC Energy $0.83
PYPL PayPal $1.01
BFAM Bright Horizons Family Solutions $0.10
BE Bloom Energy Corp -$0.08
LBTYA Liberty Global Class A Ordinary Shares $0.09
HR Healthcare Realty $0.42
MTG MGIC Investment $0.42
NUVA NuVasive $0.33
ALB Albemarle $0.79
STAA STAAR Surgical $0.02
CPA Copa -$2.21
NUS Nu Skin Enterprises $0.72
TWO Two Harbors Investment $0.21
ACAD Acadia Pharmaceuticals -$0.54
RCII Rent-A-Center $1.11
LOPE Grand Canyon Education $1.67
ORA Ormat Technologies $0.40
KW Kennedy Wilson $0.27
LHCG LHC $1.26
SLF Sun Life Financial USA $1.08
FOXA Twenty-First Century Fox $0.57
FNV Franco Nevada $0.79
QTWO Q2 $0.07
UBER Uber -$0.56
SBRA Sabra Health Care Reit $0.40
RKT Rocket Cos. Inc. $0.89
MDU MDU Resources $0.20
TRMB Trimble Navigation $0.56
GDOT Green Dot $0.93
APA Apache $0.69
HUBG HUB $0.46
KAI Kadant $1.36
SBH Sally Beauty $0.16
BCH Banco De Chile $0.40
DAR Darling Ingredients $0.56
RARE Ultragenyx Pharmaceutical -$1.25
TRNO Terreno Realty $0.39
CCU Compania Cervecerias Unidas $0.32
CENTA Central Garden Pet $1.08
RCKT Rocket Pharma -$0.77
CUB Cubic $0.41
AVNS Avanos Medical Inc $0.18
FMS Fresenius Medical Care $0.45
UGP Ultrapar Participacoes $0.04
ELP Companhia Paranaense De Energia $0.03
LBTYK LIBERTY GLOBAL $0.09
FOX Twenty First Century Fox $0.58
NVO Novo Nordisk A Fs $0.79
BAK Braskem $1.38
AEBZY Anadolu Efes ADR $0.01
OMVJF OMV $0.97
SRPT Sarepta Therapeutics -$2.01
VIV Telefonica Brasil $0.13
ES Eversource Energy $1.10
GBT BMTC Group -$1.02

Thursday (May 6)

IN THE SPOTLIGHT: MODERNA

Moderna Inc, an American biotech company focused on drug discovery, is expected to report its first-quarter earnings of $2.36 per share, up about 700% from the same quarter a year ago. The Massachusetts-based biotechnology company’s revenue would surge to $1.97 billion.

“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.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MAY 6

Ticker Company EPS Forecast
PZZA Papa John’s International $0.55
AY Atlantica Yield -$0.13
SUN Sunoco $0.69
TECH Bio Techne $1.50
ZTS Zoetis $1.04
EPAM EPAM Systems $1.69
APTV Aptiv PLC $0.77
MGA Magna International USA $1.59
VER VEREIT $0.78
WCC Wesco International $0.76
BUD Anheuser-Busch $0.48
IRM Iron Mountain $0.64
LIN Linde PLC $2.26
BDX Becton, Dickinson and Co. $3.04
AES AES $0.31
BLD TopBuild Corp $1.93
HWM Howmet Aerospace Inc $0.20
BIP Brookfield Infrastructure $0.87
PENN Penn National Gaming $0.28
K Kellogg $0.95
PWR Quanta Services $0.74
BLL Ball $0.67
STWD Starwood Property $0.51
SEAS SeaWorld Entertainment -$0.83
CNP CenterPoint Energy $0.50
ALE Allete $1.11
WD Walker & Dunlop $2.01
COMM CommScope $0.31
PRLB Proto Labs $0.37
VG Vonage $0.05
AMRS Amyris -$0.16
BKI Black Iron Inc. $0.51
PBH Prestige Brands $0.79
W Wayfair Inc. $0.27
REGN Regeneron Pharmaceuticals $8.79
NSIT Insights $1.44
FIS Fidelity National Information Services $1.25
TRGP Targa Resources $0.15
EVOP EVO Payments Inc $0.12
CNQ Canadian Natural Resource USA $0.67
MUR Murphy Oil -$0.16
XRAY Dentsply International $0.55
IDCC InterDigital -$0.01
EVRG Evergy Inc $0.47
CAH Cardinal Health $1.57
EPC Edgewell Personal Care $0.62
THS TreeHouse Foods $0.35
STOR STORE Capital Corp $0.45
HAIN Hain Celestial $0.38
ADNT Adient PLC $0.59
MT Arcelormittal $1.57
OGE OGE Energy $0.18
NJR New Jersey Resources $1.17
MRNA Moderna Inc $2.36
BCRX BioCryst Pharmaceuticals -$0.26
FOCS Focus Financial Partners Inc $0.86
HII Huntington Ingalls Industries $2.52
IIVI Ii Vi $0.88
TPR Tapestry Inc $0.30
ARW Arrow Electronics $2.27
BLDR Builders Firstsource $0.81
INSM Insmed -$1.02
BECN Beacon Roofing Supply $0.01
NWSA News Corp $0.06
XLRN Acceleron Pharma -$0.83
QDEL Quidel $4.87
IHRT Iheartmedia -$0.44
AL Air Lease $1.01
Y Alleghany $4.65
AVLR Avalara Inc -$0.11
ALTR ALTAIR ENGINEERING $0.20
SEM Select Medical $0.65
CGNX Cognex $0.35
LYV Live Nation Entertainment -$1.77
TDC Teradata $0.46
CABO Cable One Inc $10.22
KWR Quaker Chemical $1.51
APLE Apple Hospitality $0.03
CLNE Clean Energy Fuels $0.01
ICUI ICU Medical $1.53
MCHP Microchip Technology $1.74
MTX Minerals Technologies $1.07
PTON Peloton Interactive, Inc. -$0.11
ANGI Angie’s List -$0.04
ENV Envestnet $0.61
CDK Cdk Global $0.68
REG Regency Centers $0.75
AIG AIG $0.99
SQ Square $0.16
MSI Motorola Solutions Msi $1.62
RVLV Revolve $0.13
SFM Sprouts Farmers Market $0.62
OLED Universal Display $0.67
PODD Insulet $0.06
AMH American Homes 4 Rent $0.31
PK Park Hotels & Resorts Inc -$0.55
EXPE Expedia -$2.52
TRIP TripAdvisor -$0.31
LNT Alliant Energy $0.67
FOXF Fox Factory $0.82
HTA Healthcare Of America $0.43
EXEL Exelixis $0.05
POST Post $0.55
CSOD Cornerstone OnDemand $0.42
SYNA Synaptics $1.87
ED Consolidated Edison $1.36
DBX Dropbox $0.30
IRTC iRhythm Tech -$0.87
DRH DiamondRock Hospitality -$0.14
MCK McKesson $5.01
YELP Yelp -$0.26
DIOD Diodes $0.78
CWK Cushman & Wakefield plc -$0.04
RGA Reinsurance Of America $0.07
STMP Stamps $1.63
EOG EOG Resources $1.50
BAP Credicorp USA $2.37
AAON AAON $0.24
MTD Mettler Toledo International $5.65
PCTY Paylocity $0.66
BCC Boise Cascade $2.50
NFG National Fuel Gas $1.21
MTZ MasTec $0.77
TPL Texas Pacific Land $5.77
FNF Fidelity National Financial $1.28
PHI Philippine Long Distance Telephone $0.61
NWS News $0.05
CYRX Cryoport Inc -$0.21
PPL PPL $0.61
NRG NRG Energy $1.64
NKTR Nektar Therapeutics -$0.75
GLUU Glu Mobile $0.07
PLUG Plug Power -$0.08
MNST Monster Beverage $0.61
NTLA Intellia Therapeutics Inc -$0.66
CTRE CareTrust REIT $0.36
ADT ADT $0.15
ARNA Arena Pharmaceuticals -$2.19
SWX Southwest Gas $1.83
MIDD Middleby $1.63
MRTX Mirati Therapeutics -$2.13
JOBS 51job $0.43
PFSI Pennymac Financial Services $5.79
KRTX Karuna Therapeutics -$1.06
MGEE Mge Energy $0.81
ITCI Intra Cellular Therapies -$0.81
XNCR Xencor -$0.77
SATS EchoStar -$0.02
DRNA Dicerna Pharmaceuticals -$0.28
IGMS IGM Biosciences -$0.98
RVNC Revance Therapeutics -$1.19
PAR Par Technology -$0.37
ACIW ACI Worldwide -$0.12
AG First Majestic Silver $0.07
ING Ing Groep $0.23
GFI Gold Fields $0.64
ABEV Ambev $0.03
AGO Assured Guaranty $0.56
MMS Maximus $0.82

Friday (May 7)

Ticker Company EPS Forecast
CI Cigna $4.37
VTR Ventas $0.02
LEA Lear $2.95
MD Mednax $0.16
AMCX AMC Networks $2.01
ENB Enbridge USA $0.57
CCJ Cameco USA -$0.08
TRP Transcanada USA $0.87
LBRDK Liberty Broadband Lbrdk $1.10
SPB Spectrum Brands $0.99
LBRDA Liberty Broadband $0.85
ITT ITT $0.87
FLR Fluor New $0.04
ESNT Essent $1.22
UNVR Univar Solutions Inc $0.32
HE Hawaiian Electric Industries $0.36
RICOY Ricoh Company -$0.08
IBP Installed Building Products $1.04
TU Telus USA $0.23
SSUMY Sumitomo ADR -$0.02
CNK Cinemark -$1.47
CVE Cenovus Energy USA -$0.02
LXP Lexington Realty $0.03

 

Why Shares Of Moderna Are Up By 7% Today?

Moderna Video 13.04.21.

Moderna Says That Its Vaccine Is Not Linked To Rare Blood Clots

Shares of Moderna gained solid upside momentum after the company stated that available safety data on its coronavirus vaccine did not suggest an association with cerebral venous sinus thrombosis (CVST) or thrombotic events. More than 64.5 million doses of Moderna’s vaccine have been administered globally.

Moderna decided to issue this statement after U.S. recommended to pause the use of Johnson & Johnson COVID-19 vaccine as six women developed blood clots after receiving the vaccine. Previously, AstraZeneca faced problems with rare blood clots, and some countries decided to limit the use of the company’s vaccine.

While blood clots appear to be a very rare side effect (more than 6.8 million doses of Johnson & Johnson’s vaccine have been administered in the U.S., and only six cases of blood clots potentially linked to vaccine have been reported so far), Johnson & Johnson’s vaccine will surely suffer a PR blow.

This is a negative development for the mass vaccination program but a positive development for Moderna which may gain additional market share due to problems of AstraZeneca and Johnson & Johnson.

What’s Next For Moderna?

The bull case for Moderna is getting stronger. Its coronavirus vaccine has avoided any notable problems, and the company’s shares stand ready to gain from the problems of its competitors.

Currently, analysts expect that the company will report earnings of $21.85 per share in 2021 and $14.87 per share in 2022 so the stock is trading at about 10 forward P/E for 2022.

However, it is not clear whether revenue from the coronavirus vaccine will be recurring. If data suggests that people will need regular vaccinations, like in the case of an ordinary flu, Moderna shares will look very cheap at current levels.

In the near term, Moderna stock will likely continue to benefit from Johnson & Johnson and AstraZeneca problems.

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

Why Moderna Stock Is Up By 7% Today?

Moderna Video 16.03.21.

Moderna Shares Move Higher As Company Starts Trial Of COVID-19 Vaccine In Children

Moderna shares gained strong upside momentum and are gaining 7% in today’s trading session after the company stated that it began to test its coronavirus vaccine in children. The study will include children aged from 6 months to 12 years.

Yesterday, the company stated that it had initiated a trial of its next COVID-19 vaccine candidate which should be stable in refrigerators. This is important because less developed countries do not have the resources to store vaccines at very low temperatures. If a vaccine is stable in refrigerators, it will be able to gain additional market share.

In addition to positive internal news, Moderna stock is supported by the current troubles of AstraZeneca‘s vaccine. Germany, France, Italy and several other European countries suspended the use of AstraZeneca’s vaccine amid concerns that the vaccine can provoke serious side effects in rare cases.

The World Health Organization promised to issue a statement on the topic by the end of the day, but it is clear that the political decision to stop inoculations in many European countries has already been made. This situation presents an opportunity for other vaccine providers to gain market share.

What’s Next For Moderna?

Moderna shares have pulled back from recent highs near the $190 level but managed to find support near $120 and are currently trying to settle above $150. The stock remains very volatile which is not surprising for shares of a biotechnology company that produces one of the world’s leading vaccines against coronavirus.

The key question for the valuation of all COVID-19 vaccine makers is whether the revenue from vaccines will be recurring in case the population will have to take the vaccine periodically, for example, every year.

Analysts are optimistic about the company’s financial performance and expect that Moderna will earn $21.96 per share in 2021 and $14.93 per share in 2022. At current prices, the stock is trading at about 10 forward P/E for 2022 which is cheap, but analyst estimates vary widely, highlighting uncertainty regarding the company’s future performance.

That said, AstraZeneca’s problems in combination with Moderna’s internal positive catalysts may provide additional upside for the company’s shares despite high uncertainty about its future profits.

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

Moderna Begins Study of COVID-19 Vaccine in Kids

The study will assess the safety and effectiveness of two doses of mRNA-1273 given 28 days apart and intends to enroll about 6,750 children in the United States and Canada.

The vaccine has already been authorized for emergency use in Americans who are aged 18 and older.

In a separate study which began in December, Moderna is also testing mRNA-1273 in adolescents between 12 and 18 years old.

The latest study is being conducted in collaboration with the National Institute of Allergy and Infectious Diseases (NIAID) and the Biomedical Advanced Research and Development Authority (BARDA).

(Reporting by Manojna Maddipatla in Bengaluru; Editing by Shailesh Kuber)

Kremlin Says Pressure on Countries to Reject Russia’s Sputnik V Vaccine is Unprecedented

Kremlin spokesman Dmitry Peskov made the remarks when asked to comment on a U.S. government report which appeared to show that the United States had tried to dissuade Brazil from buying Sputnik V.

The report, published on the website of the U.S. Department of Health and Human Services (HHS), detailed the work of the U.S. Office of Global Affairs (OGA) in “combating malign influences in the Americas”.

The report outlined the agency’s diplomatic efforts to counter what it described as attempts by countries, including Russia, to increase their influence in the region, to the detriment of U.S. safety and security.

“Examples include using OGA’s Health Attache office to persuade Brazil to reject the Russian COVID-19 vaccine,” the government report said.

Kremlin spokesman Peskov declined to comment specifically on the report but said Russia was against politicizing the situation around vaccines.

“In many countries the scale of pressure is quite unprecedented … such selfish attempts to force countries to abandon any vaccines have no prospects,” he said.

“We believe that there should be as many doses of vaccines as possible so that all countries, including the poorest, have the opportunity to stop the pandemic,” Peskov said.

The U.S. Embassy in Moscow referred a request for comment to the U.S. Department of State. The department did not immediately respond.

(Reporting by Dmitry Antonov; writing by Alexander Marrow and Polina Ivanova; editing by Andrew Osborn and Philippa Fletcher)

Moderna Rallies to Resistance

Moderna Inc. (MRNA) consolidated under 50-day moving average resistance in Monday’s pre-market session, trading more than 50 points below the euphoric Feb. 8 all-time high at 189.26. The stock has lost ground since hitting that peak and failing a breakout above the December high, dropping into intermediate support in the 130s. Long-term relative strength oscillators now suggest vulnerability into the 110s.

Long-Term Cash Flow

Even so, their SARS-2 vaccine looks like the Tesla Inc. (TSLA) of COVID-19 treatments, potentially signaling years or decades of strong revenue growth through boosters and new biohazards. Moderna added to that bullish theme last week, announcing the first doses in a study evaluating booster candidates targeting the South African variant. The research and eventual dosage fees should prove lucrative if these pathogens follow the path of influenza and other SARS outbreaks.

The biotech juggernaut touted the current vaccine’s efficacy with the SA variant in their press release, noting “Previously published data has shown that vaccination with the Moderna COVID-19 Vaccine produced neutralizing titers against all key variants tested, including B.1.1.7, first identified in the UK, and B.1.351, with a 6-fold reduction in neutralizing titers against B.1.351. Out of an abundance of caution, Moderna is pursuing a clinical development strategy against these emerging variants.”

Wall Street and Technical Outlook

Wall Street consensus has eased since massive upgrades following the March 2020 lockdown, with an ‘Overweight’ rating based upon 7 ‘Buy’,  5 ‘Hold’, and 1 ‘Underweight’ recommendation. Two analysts now recommended that shareholders close positions and move to the sidelines. Price targets currently range from a low of just $80 to a Street-high $208 while the stock is set to open Monday’s U.S. session more than $40 below the median $182 target.

Moderna cleared 2019 resistance around 30 in April 2020 and took off in an historic uptrend that settled in the upper 80s in May. A November breakout lost momentum above 175, giving way to a pullback to 20-day moving average support, followed by a failed February breakout attempt. The stock is now pulling back once again, carving the next stage in a trading range that could persist well through the second quarter.

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.

Moderna Testing New COVID-19 Vaccine as Potential Booster Shot

The company said its new candidate, mRNA-1283, could potentially be stored in refrigerators instead of freezers, making it easier to distribute, especially in developing countries.

The early-stage study will assess the safety and immunogenicity of mRNA-1283 at three dose levels, and will be given to healthy adults either as a single dose or in two doses 28 days apart, the company said.

Last week, Moderna began dosing the first participants in a study testing its COVID-19 booster vaccine candidates.

(Reporting by Manojna Maddipatla and Vishwadha Chander in Bengaluru; Editing by Shailesh Kuber and Anil D’Silva)

Italy’s Health Minister Expects COVID Cases to Start Falling in Late Spring

Italy, the first Western country hit hard by the pandemic, saw infections rise by 10% last week compared with the week earlier, and officials have warned that the situation is deteriorating as highly contagious variants gain ground.

“The application of more rigorous measures and the progressive rise in the number of vaccinated people make us think that already in the second half of spring (contagion) numbers will be improving,” Health Minister Roberto Speranza told daily la Repubblica in an interview.

He added that the coming weeks “would not be at all easy”.

The UK variant represented 54% of cases in the latest study by Italy’s Superior Health Institute, ISS, but the percentage was expected to be higher now, the minister added.

On Friday the government imposed a nationwide lockdown over the Easter holidays and placed curbs on business and movement on most of Italy.

Speranza said vaccines in Italy and Europe were “effective and safe”, with all checks being carried out, answering a question on Italy’s ban of the AstraZeneca vaccine.

Italy’s medicine authority Aifa on Thursday banned the use of one batch of the vaccine. Sources told Reuters the decision had been taken after the deaths of two men in Sicily. Aifa said earlier that the ban was a “precautionary” measure, adding that no link had been established between the vaccine and subsequent “serious adverse events.”

Italy on Saturday released its national vaccination plan, aiming to vaccinate at least 80% of its population by the end of September and administer 500,000 doses a day at full capacity.

Speranza said that Italy is expecting the delivery of 52 million doses in the second quarter of the year and that the vaccination campaign would be accelerated even with further supply delays.

So far, 6.6 million Italians have received at least one vaccine dose, with just under 2 million of them having received the required 2 doses, health ministry data shows.

(Reporting by Giulia Segreti; Editing by Nick Macfie)

Gold Futures Lag Far Behind the Other Three Precious Metals in Trading Today

However, at the same time, the three other precious metals that trade on the futures exchange gained value. Silver futures gained $0.19 (+0.70%) in trading today and are currently fixed at $26.625. Platinum futures gained $6.20 (+0.52%) and are currently fixed at $1191.50. Lastly, palladium futures gained $33 (+1.43%) and remained the most expensive of the precious metals complex at $2346.50.

gld 31

si 31

pl 31

pa march 1

The most reasonable explanation for why gold continues to underperform when valued against the other three precious metals that are traded on the futures complex is that gold has the least industrial usage when compared to platinum, palladium, and silver. That fact, coupled with the strong rally in U.S. equities markets today, is at the root of why three precious white metals have been consistently outperforming gold recently. It was another strong showing in all three major indexes, with the Dow Jones industrial average gaining 603 points (+1.95%), the Standard & Poor’s gained 90.67 points (+2.38%), and the NASDAQ composite gaining 398 points (+3.010%).

While it has been recent gains in Treasury yields that led to the strong selling pressure witnessed in gold last week, the primary factor moving equities higher and gold pricing lower is data that suggests that the economy in the United States is gaining momentum that is resulting in a rally in stocks on the first trading day of March.

As reported in MarketWatch, Jim Baird, chief investment officer at Plante Moran Financial Advisors, said, “Increasingly, it appears that the economy sidestepped a feared hard-landing despite a period of soft consumer spending that contributed to negative conditions for parts of the service sector and a surge in layoffs. If anything, it appears that manufacturers may have benefited from consumer spending habits that favored goods over services in recent months.”

One recent development has been the emergency use approval by the CDC of the Johnson & Johnson one shot coronavirus vaccine, which was greenlighted by the FDA last week. In fact, J&J began shipping their vaccine today, beginning with four 4 million doses. While not as effective as the other two primary vaccines granted emergency use (Pfizer-BioNTech and Moderna), the J&J vaccine is stable when stored in a refrigerator for three months and requires only one shot. Many medical professionals believe that this potentially could be key to the rural areas of the United States, which makes it difficult to ship and store the other vaccines at subzero temperatures.

These developments, when coupled with the passage in the Congress last week of President Biden’s $1.9 trillion aid package, have has shifted market sentiment towards the risk-on asset class rather than the safe-haven assets.

For more information on our service, simply use this link.

Wishing you, as always, good trading and good health,

Gary S. Wagner

 

Stocks Move Higher At The Start Of The Month

The Market Is Set To Rebound After Sell-Off

S&P 500 futures are up by about 1% in premarket trading as traders look ready to buy stocks after the recent sell-off.

The U.S. House of Representatives has approved Biden’s $1.9 trillion coronavirus aid package which will now go to the U.S. Senate. The package includes $1,400 stimulus checks which are expected to boost consumer spending and push prices higher.

The yields of U.S. government bonds began to move higher after the recent pullback as traders remained focused on the threat of higher inflation. That said, inflation expectations have failed to put any material pressure on the stock market today. Tech stocks like Tesla or Amazon look ready to rebound after the recent weakness, and the market’s mood is clearly bullish at the start of this month.

Oil Gains Ground On Vaccine Optimism

WTI oil is currently trying to settle back above the $62 level as traders bet that Johnson & Johnson vaccine will provide additional support to recovery in the longer-term.

FDA has recently approved the company’s coronavirus vaccine which is the first one that requires just one shot. This is the third vaccine which has been approved in the U.S. since the beginning of the pandemic. Pfizer/BioNTech and Moderna vaccines are distributed in two doses.

At this point, the supply of Johnson & Johnson vaccine is limited, but it will significantly increase in the upcoming months which is bullish for oil.

Manufacturing PMI Reports Show That The  Manufacturing Segment Continues To Recover

Today, traders will have a chance to take a look at the final reading of U.S. Manufacturing PMI report. Analysts expect that Manufacturing PMI declined from 59.2 in January to 58.5 in February.

Other countries have already published their PMI reports which indicated that the recovery in the manufacturing segment was stronger than expected. Euro Area Manufacturing PMI grew from 54.8 to 57.9 compared to analyst consensus of 57.7. In the UK, Manufacturing PMI increased from 54.1 to 55.1 compared to analyst consensus of 54.9.

If U.S. Manufacturing PMI exceeds analyst expectations, the market may get additional support.

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

US Stock Market Daily Recap: Shortest Stock Correction Ever

It was an overdue plummet- at least that’s what I thought at the start of the day. The Dow was down 360 points at one point, and the Nasdaq was down 3%.

But by the end of the day, Jay Powell played the role of Fed Chair and investor therapist and eased the fears of the masses.

The Dow closed up, the S&P snapped a 5-day losing streak, and the Nasdaq only closed down a half of a percent!

You really can’t make this up.

The day started gloomily with more fears from rising bond yields.

Sure, the rising bonds signal a return to normal. But they also signal inflation and rate hikes from the Fed.

But Powell said “not so fast” and eased market fears.

“Once we get this pandemic under control, we could be getting through this much more quickly than we had feared, and that would be terrific, but the job is not done,” Powell said .

He also alluded to the Fed maintaining its commitment to buy at least $120 billion a month in U.S. Treasuries and agency mortgage-backed securities until “substantial further progress is made with the recovery.

While the slowdown (I’d stop short of calling it a “downturn”) we’ve seen lately, namely with the Nasdaq, poses some desirable buying opportunities, there still could be some short-term pressure on stocks. That correction I’ve been calling for weeks may have potentially started, despite the sharp reversal we saw today.

Yes, we may see more green this week. But while I don’t foresee a crash like we saw last March and feel that the wheels are in motion for a healthy 2021, I still maintain that some correction before the end of Q1 could happen.

Bank of America also echoed this statement and said, “We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and as good as it gets’ earnings revisions.”

With more earnings on tap for this week with Nvidia (NVDA) on Wednesday (Feb. 24) and Virgin Galactic (SPCE) and Moderna (MRNA) on Thursday (Feb. 25), buckle up.

The rest of this week could get very interesting.

Look. Don’t panic. We have a very market-friendly monetary policy, and corrections are more common than most realize. Corrections are also healthy and normal market behavior, and we are long overdue for one. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017), and we haven’t seen one in a year.

A correction could also be an excellent buying opportunity for what could be a great second half of the year.

My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.

With that said, to sum it up:

While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don’t think that a decline above ~20%, leading to a bear market, will happen.

Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck.

 Nasdaq- To Buy or Not to Buy?

Figure 1- Nasdaq Composite Index $COMP

What a difference a few weeks can make!

Before, I was talking about the Nasdaq’s RSI and to watch out if it exceeds 70.

Now? As tracked by the Invesco QQQ ETF , the Nasdaq has plummeted by 4.5% since February 12 and is trending towards oversold levels! I hate to say I’m excited about this recent decline, but I am. This has been long overdue, and I’m sort of disappointed it didn’t end the day lower.

Now THAT would’ve been a legit buying opportunity.

While rising bond yields are concerning for high-flying tech stocks, I, along with much of the investing world, was somewhat comforted by Chairman Powell’s testimony. Inflation and rate hikes are definitely a long-term concern, but for now, if their inflation target isn’t met, who’s to fight the Fed?

Outside of the Russell 2000, the Nasdaq has been consistently the most overheated index. But after today, I feel more confident in the Nasdaq as a SHORT-TERM BUY.

But remember. The RSI is king for the Nasdaq . If it pops over 70 again, that makes it a SELL in my book.

Why?

Because the Nasdaq is trading in a precise pattern.

In the past few months, when the Nasdaq has exceeded 70, it has consistently sold off.

  • December 9- exceeded an RSI of 70 and briefly pulled back.
  • January 4- exceeded a 70 RSI just before the new year and declined 1.47%.
  • January 11- declined by 1.45% after exceeding a 70 RSI.
  • Week of January 25- exceeded an RSI of over 73 before the week and declined 4.13% for the week.

I like that the Nasdaq is below the 13500-level, and especially that it’s below its 50-day moving average now. I also remain bullish on tech, especially for sub-sectors such as cloud computing, e-commerce, and fintech.

But the pullback hasn’t been enough.

Because of the Nasdaq’s precise trading pattern and its recent decline, I am making this a SHORT-TERM BUY. But follow the RSI literally.

For an ETF that attempts to directly correlate with the performance of the NASDAQ, the Invesco QQQ ETF (QQQ) is a good option.

Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter – it’s absolutely free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!

Thank you.

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

Matthew Levy, CFA
Stock Trading Strategist
Sunshine Profits: Effective Investment through Diligence & Care

* * * * *

All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits’ employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

US Stock Market Daily Recap: The Yield Harbinger for Stocks

That correction I’ve been calling for weeks could have potentially started.

While I don’t foresee a crash like we saw last March and feel that the wheels are in motion for a healthy 2021, I still maintain that some correction before the end of Q1 could happen.

Bank of America also echoed this statement and said last week that “We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and as good as it gets’ earnings revisions.”

But rather than looking at the past, let’s take a look at what’s on tap this week to get you ready for what could potentially be a volatile week ahead.

This coming week, be on the lookout for the January leading indicator index, durable goods orders, and personal income and spending.

On Tuesday, we will also receive the February Consumer Confidence Index; on Wednesday, the Census Bureau will release upcoming home sales. On Friday, the University of Michigan will release its Consumer Sentiment Index.

Of course, as we’ve seen in weeks past, jobless claims from the previous week will be announced on Thursday too. After outperforming the last few weeks, the jobless claims announced last Thursday (Feb. 18) grossly underperformed and reached their worst levels in nearly a month.

Earnings season has been outstanding but is winding down now. Be on the lookout this week for earnings from Royal Caribbean (RCL) on Monday (Feb. 22), Square (SQ) on Tuesday (Feb. 23), Nvidia (NVDA) on Wednesday (Feb. 24), and Virgin Galactic (SPCE) and Moderna (MRNA) on Thursday (Feb. 25).

We have the makings of a volatile week, and as I mentioned before, a possible correction.

Look. Don’t panic. We have a very market-friendly monetary policy, and corrections are more common than most realize. Corrections are also healthy and normal market behavior, and we are long overdue for one. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017), and we haven’t seen one in a year.

While it won’t happen for sure, I feel like it’s inevitable because of how much we have surged over the last few months.

A correction could also be an excellent buying opportunity for what could be a great second half of the year.

My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.

With that said, to sum it up:

While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don’t think that a decline above ~20%, leading to a bear market, will happen.

Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck.

Will the Russell 2000 Overheat Again?

Figure 1- iShares Russell 2000 ETF (IWM)

The Russell 2000 popped on Friday (Feb. 19) after seeing a bit of a pullback since February 9. Between February 9 and the close on February 18, the Russell 2000 lagged behind the other indices after significantly overheating. I switched my call to a SELL then on the 9th, and it promptly declined by 3.40% before Friday’s session.

I foresaw the pullback but cautiously saw a rally and switched to a HOLD call before it popped over 2% on Friday (Feb. 19).

I do love small-caps for 2021, and I liked the decline before Friday. However, I feel like the index needs a minimum decline of 5% from its highs before switching it to a BUY.

As tracked by the iShares Russell 2000 ETF (IWM) , small-cap stocks have been on a rampage since November.

Since the market’s close on October 30, the IWM has gained nearly 47.56% and more than doubled ETFs’ returns tracking the larger indices. If you thought that the Nasdaq was red hot and frothy, you have no idea about the Russell 2000.

Not to mention, year-to-date, it’s already up a staggering 16.38%.

It pains me not to recommend you to BUY the Russell just yet. I love this index’s outlook for 2021. Aggressive stimulus, friendly policies, and a reopening world could bode well for small-caps. Consumer spending, especially for small-caps, could be very pent-up as well.

But we just need to hold on and wait for it to cool down just a little bit more for a better entry point.

HOLD. If and when there is a deeper pullback, BUY for the long-term recovery.

For more of my thoughts on the market, such as the streaky S&P, inflation, and emerging market opportunities, sign up for my premium analysis today.

Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter – it’s absolutely free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!

Thank you.

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

Matthew Levy, CFA
Stock Trading Strategist
Sunshine Profits: Effective Investment through Diligence & Care

* * * * *

All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits’ employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

U.S. Market Wrap & Forecast for Tuesday

U.S. equity bulls took control on the first day of February, lifting the Dow Industrial Average back above 30,000. SP-500 and Nasdaq-100 indices recouped short-term losses, closing at or above Friday highs after holding support going back to November. Short squeezes on beaten-down small caps faltered, dropping GameStop Inc. (GME) more than 40% while silver stocks and futures picked up the slack, lifting the less-loved precious metal to an 8-year high.

Monday Wrap-Up

Tesla Inc. (TSLA) bounced above 800, gaining around 6% on the session. Alphabet Inc. (GOOG) and Amazon.com Inc. (AMZN) booked strong gains ahead of Q4 reports after Tuesday’s close. SP-500 index bounced at the 50-day EMA, completing the first test since the November breakout. Moderna Inc. (MRNA) gave back gains booked after Dow component Johnson & Johnson (JNJ) disappointed investors with 66% vaccine efficacy last week.

Silver replaced Gamestop as a media obsession on Monday, with retail traders ‘allegedly’ pouring into equity and futures plays. Rather, it feels like big money is now moving the small fry, giving them the illusion of ‘democratization’ while hanging them upside down to shake out quarters. A history lesson might help at this point, with Net bubble survivors recalling that 95% or more young ‘market wizards’ blowing out their accounts in the 2000 to 2002 bear market.

The Week Ahead

This is January jobs week, with the ADP employment report in Wednesday’s pre-market and Non-Farm Payrolls on Friday morning. It’s been a terrible winter in the United States due to the pandemic so little improvement in the weak employment situation is likely. However, the market is discounting at least six months into the future and analysts expect dramatic improvement in the second half of 2021, after vaccines work their way through the population.

Market seasonality shifts to ‘bearish’ after the first day of a new month, predicting consolidation of Monday’s gains into mid-week. It feels like short squeeze momentum is winding down, with Reddit pumps hitting an invisible wall of inertia, driven by regulators and brokers seizing control of the ticker tape. You have to worry about Robinhood traders hanging onto exposure at this point because their market days could be drawing to a close.

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

Short Squeeze Mania – Stocks Swoon

It’s officially “stonk season” in the markets. The IPO market continues to baffle, and SPACs continue to pop-up like weeds in your front yard.

Plus if you’ve seen GameStop (GME), AMC Entertainment (AMC), and Blackberry (BB) lately, you know the Robinhooders are at it again.

These speculative gambles are ridiculously frothy right now as hedge funds and institutions continue to try and cover their shorts. The moves these stocks are making are more detached from reality than the guy in a buffalo headdress at the Capitol 3 weeks ago.

Complacency is the most significant near-term risk to stocks by far, and I have been warning about this for weeks. It also reminds me of the Q4 2018 pullback ( read my story here ).

It’s also earnings season (for those who care, like analysts), and it’s time for some big swings and volatility.

Well, not entirely. Monday (Jan. 25) saw a sudden mid-day plummet and subsequent recovery, and Tuesday (Jan. 26) traded slightly down. Wednesday (Jan. 27) looks set to open lower – we will see how that ends up.

Earnings have so far impressed, though, and there were some big moves from individual stocks.

General Electric (GE) popped over 9% thanks to a healthy outlook for 2021 and better than expected industrial free cash flow.

Johnson & Johnson (JNJ) also saw a nice 3% gain after beating earnings. Investors are also eagerly anticipating results from its vaccine’s trial. Johnson & Johnson’s vaccine is one dose and does not require any crazy storage protocols like Pfizer (PFE) and Moderna’s (MRNA). Strong results and FDA approval could genuinely change the tide of the pandemic and vaccine rollout.

Earnings from Microsoft (MSFT) and Advanced Micro Devices (AMD) also came in after the closing bell and impressed as well. Microsoft posted record quarterly sales, and AMD exceeded $3 billion in revenue.

Does this mean we’re all clear now and can party like it’s 1999?

Not exactly. Plus, if you’re a stock nerd like I am, you don’t want to party like it’s 1999. Because that means 2000 will come—the end of one of the biggest parties, investors have ever seen. I’m talking about the dot-com bust.

Fair warning: the S&P 500 is still at or near its most-expensive level in recent history on most measures, and the Russell 2000 has never traded this high above its 200-day moving average.

The more GameStop pops, the more of a circus I think this market is. GameStop a $15+ billion company? Really? A correction at some point in the short-term would not be shocking in the least.

John Studzinski , vice chairman of Pimco, believes that market valuations are sound and reflect expectations of this eventual reopening and economic recovery by the second half of the year.

I agree on some level about the second half of the year. Outside of complacency, though, I have other short-term concerns.

For one, trillions in imminent stimulus could be useful for stocks but bring back inflation by mid-year. The worst part about it? The Fed will likely let it run hot. With debt rising and consumer spending expected to increase as vaccines are rolled out to the masses, the Fed is undoubtedly more likely to let inflation rise than letting interest rates rise.

All of this tells me that the market remains a pay-per-view fight between good news and bad news.

We may trade sideways this quarter- that would not shock me in the least. But I think we are long overdue for a correction since we haven’t seen one since last March.

Corrections are healthy for markets and more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).

A correction could also be an excellent buying opportunity for what should be a great second half of the year.

Therefore, to sum it up:

While there is long-term optimism, there are short-term concerns. A short-term correction between now and Q1 2021 is possible. I don’t think that a decline above ~20%, leading to a bear market will happen.

In a report released last Tuesday (Jan. 19), Goldman Sachs shared the same sentiments.

My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth. Hopefully, you find my insights enlightening, and I welcome your thoughts and questions.

We have a critical week ahead with the Fed set to have its first monetary policy meeting of 2021 and more earnings announcements. I wish you the best of luck. We’ll check back in with you at the end of the week.

Small-caps are Too Hot to Handle

Figure 1- iShares Russell 2000 ETF (IWM)

As tracked by the iShares Russell 2000 ETF (IWM) , small-cap stocks underperformed the larger indices on Tuesday (January 26). The RSI is no longer technically overbought, but I still think that the Russell has overheated in the short-term. Stocks don’t just go up in a straight line without experiencing a sharp pullback. That’s just the nature of the beast.

Barron’s also claims that the Russell 2000/S&P 500 ratio has entered a powerful 15-year resistance area .

Nobody knows what will happen during this critical week of earnings, but I called a decline after the IWM began the week over a 70 RSI. Indeed the IWM is having a down week to this point, but it’s not sharply down enough for me to switch my call. Not even close.

I love small-cap stocks in the long-term, especially as the world reopens. Small-caps are also the most likely to benefit from Biden’s aggressive stimulus plan.

But the index has overheated. Period.

Before January 4, the RSI for the IWM Russell 2000 ETF was at a scorching hot 74.54. I called a sell-off happening in the short-term due to this RSI, and it happened.

After the RSI hit another overbought level of approximately 77 two Wednesdays ago (January 13), the IWM declined by another 1.5%. I said that Russell stocks would imminently cool down because the RSI was too hot, and precisely that’s what happened.

Consider this too. In its entire history as an index, the Russell has never traded this high above its 200-day moving average.

Small-caps may have priced in vaccine-related gains by now, and some stimulus optimism may have been priced in too.

I hope small-caps decline before jumping back in for long-term buying opportunities. I love where these stocks could end up by the end of the year.

SELL and take profits if you can- but do not fully exit positions . If there is a deeper pullback, this is a STRONG BUY for the long-term recovery.

Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter – it’s absolutely free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!

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

Thank you.

Matthew Levy, CFA
Stock Trading Strategist
Sunshine Profits: Effective Investment through Diligence & Care

* * * * *

All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits’ employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

COVID-19 Vaccine Update – New Strains and Supply Issues Remain a Concern

Vaccine News

Over the weekend, the news wires reported that the Johnson & Johnson vaccine could receive approval in just 2-weeks.

Dr. Anthony Fauci’s comments came amidst announcements of supply issues.

With just 2 vaccines currently approved for emergency use in the U.S, an approval of a 3rd vaccine would ease the strain.

Things may not improve near-term for the likes of the EU, however, which is likely to continue to face supply constraints.

In other parts of the world the AstraZeneca vaccine has already received approval for emergency use. This is not the case in the EU and the U.S, however.

While the EMA is scheduled to review AstraZeneca vaccine later this week, the U.S timeline is far lengthier.

The U.S FDA is currently due to review the AstraZeneca vaccine in April.

It goes without saying, however, that the U.S is not alone in needing access to multiple vaccines.

A Johnson & Johnson and AstraZeneca approval in the U.S and the EU will be key, though supply will remain a concern.

We have heard plenty of bullish production numbers floated by the leading three in the race to end the pandemic.

It remains to be seen, however, if the three can play catch up and meet their 1st quarter targets.

If the most recent updates are anything to go by, the need for a single dose vaccine has become all the more urgent.

Vaccinations Rates

According to the Bloomberg Vaccination Tracker, the U.S has administered 22,396,673 doses as at 24th January.

U.S states have only administered 54% of shots delivered, however, leaving the vaccination rate at just 6.8 doses per 100.

Transportation and storage requirements of both Pfizer Inc. and Moderna Inc.’s vaccines have contributed to the low vaccination rate.

By contrast, the UK has seen its vaccination rate jump to 10.21 doses per 100 people. The UK’s approval of the AstraZeneca vaccine enabled the sharp rise in the vaccination rate.

As at 24th January, Israel continued to have the highest vaccination rate at 39.94.

The UAE ranked 2nd, with a vaccination rate of 23.14, with the Seychelles coming in ahead of the UK, with a rate of 19.12.

In terms of actual doses administered, however, the U.S and China were well ahead of other nations.

As at 20th January, China had administered 15 million doses of the vaccine, sitting behind 22.4 million in the U.S.

In spite of supply issues, the EU ranked 3rd, administering 8.6 million doses.

The UK ranked 4th, with 6.8m doses, followed by Israel (3.6m) and the U.A.E (2.5m)

Looking across the EU, the Netherlands had amongst the lowest vaccination rates. As at 22nd January, the vaccination rate stood at just 0.78 doses per 100 people.

For France, one of the worst affected EU member states, the vaccination rate stood at 1.58. While this was up from 1.49 doses per 100 as at 22nd January, the rise was a marginal one at best.

Germany also trailed the EU front runners, with a rate of 1.96 doses per 100 people as at 23rd January.

Spain and Italy had performed somewhat better, with vaccination rates of 2.51 (22nd January) and 2.28 (24th January) respectively.

For a full breakdown of vaccination rates by country, please visit Bloomberg Vaccination Tracker page here.

The Latest COVID-19 Numbers

At the time of writing, there were a total of 99,774,351 confirmed COVID-19 cases and 2,139,03` related deaths.

By geography, the U.S had reported 25,702,125 cases and 429,490 COVID-19 related deaths.

India reporting 10,668,674 cases, with Brazil reporting 8,844,600 cases.

Sitting behind Russia (3,719,400) remained the UK (3,647,463).

France (3,053,617), Italy (2,466,813), Spain (2,603,472), and Germany (2,147,740) reported a combined 10,271,642 cases.

Looking Ahead

Johnson & Johnson’s vaccine approval by the FDA and AstraZeneca approval by the EMA remain key near-term.

Pfizer Inc. and AstraZeneca, in particular, will also need to address supply issues, however, to support a marked increase in vaccination rates.

Over the weekend, news hit the wires of further lockdown measures to hit France next month.

Of greater concern, however, was reports that vaccinated people can still spread the coronavirus.

For countries with low vaccination rates, this would mean that containment measures may remain in place for longer.

Coupled with the rising number of new and reportedly more virulent strains, border controls could also be seen across a wider number of countries.

For countries with higher vaccination rates, governments will also need to maintain momentum to deliver the 2nd doses.

This will also mean that countries would need to avoid supply constrains to meet the vaccination timelines.

The UK’s British Medical Association Board chair stated last week that there was increased concern that the vaccine would become less effective with doses 12-weeks apart.

It will therefore be all the more important to complete the vaccine dose regimens within optimal timelines.

When considering the supply shortage that the EU currently faces, a quick resolution is going to be needed to avoid making the 8.57 million administered doses redundant.

COVID-19 Vaccine Update – The EU’s Vaccine Woes Worsen and Is Unlikely to Improve Anytime Soon

EU Vaccine News

As the EMA readies to review the AstraZeneca vaccine on 29th January, there was some bad news for EU member states.

AstraZeneca has issued a warning to EU member states to expect limited supply of the vaccine near-term.

The EU has ordered up to 400 million doses of the AstraZeneca vaccine, with up to 100 million due within the 1st quarter.

Last week, the FT reported that AstraZeneca may only deliver less than half of the 100 million doses. That means that less than 25 million would receive full protection by the early part of the 2nd quarter.

It was also reported that there was deep satisfaction within the EU Commission even though the vaccine had yet to be approved.

With the EU having made significantly smaller Pfizer Inc. and Moderna Inc. vaccine orders, the shortfall will raise further concerns over the Eurozone economy and its recovery.

Less than 50 million doses would barely make a dent in inoculating the more than 440 million population.

The bad news followed Pfizer Inc’s cut back in supply to the EU earlier in the month.

Vaccination rates across the EU remain woefully short. The latest news will continue to leave vaccination rates on the lower side that will add further pressure on governments to contain the virus by other means.

Vaccinations Rates

According to the Bloomberg Vaccination Tracker, the EU’s vaccination rate stood at 1.79 doses per 100 people as at 22nd January.

This continued to fall well short of the UK, the U.S and leading nations in the Middle East.

As at 22nd January, Israel had the highest vaccination rate of 37.14 doses per 100 people.

The U.A.E came in a distant second, with a vaccination rate of 21.76 doses per 100.

Bahrain ranked 3rd, with a rate of 9.71 (19th January), with the UK coming in 4th with a rate of 8.76 doses per 100.

With Joe Biden’s drive to vaccinate 100 million in 100 days, the U.S vaccination rate climbed to 6.04 as at 22nd January.

Looking across the EU, France was amongst the worst performers, with a vaccination rate of just 1.49.

Germany also trailed the front runners in the EU, with a rate of 1.81 doses per 100 people.

Spain and Italy had performed somewhat better, with rates of 2.51 and 2.17 respectively.

When considering the fact that these 4 member states are the worst affected, the numbers should have been better.

A lack of supply and currently low rates are a bad combination for the EU. This raises the prospects of even more restrictions to hurt the region’s economy.

For a full breakdown of vaccination rates by country, please visit Bloomberg Vaccination Tracker page here.

The Latest COVID-19 Numbers

At the time of writing, there were a total of 98,750,103 confirmed COVID-19 cases and 2,116,438 related deaths.

By geography, the U.S had reported 25,390,042 cases and 424,177 COVID-19 related deaths.

India reported 10,640,544 cases, with Brazil reporting 8,755,133 cases.

Sitting behind Russia (3,677,3520) remained the UK (3,583,907).

France (3,011,257), Italy (2,411,854), Spain (2,603,472), and Germany (2,125,261) reported a combined 10,151,844 cases.

Looking Ahead

The reported AstraZeneca supply constraints make Johnson & Johnson’s vaccine availability all the more important.

A single dose vaccine would certainly ease the strain on the EU that will now have to maintain containment measures for longer.

The EU will be able to order up to 400 million doses of the Johnson & Johnson vaccine. This would cover close to the entire EU population should a single dose vaccine receive approval.

For the EU, however, a lack of supply by AstraZeneca and Sanofi troubles mean that the entire population would not receive a vaccine for some time.

The EU had preordered 300 million doses from Sanofi, which won’t be ready until later this year at the earliest.

As the markets respond to supply issues, we can expect focus on vaccination rates, infection rates, supply to become greater near-term.

Johnson & Johnson Vaccine News

News hit the wires this week that late clinical trial results will be available within the coming weeks.

With the U.S FDA ready to review the vaccine, single dose vaccines could be available within the U.S this quarter.

The easier to transport vaccine means that governments would be able to ramp up vaccination rates. For governments lagging behind, the biggest advantage will be the fact that it is a single dose vaccine.

Approvals would need to be given, however, for distribution of the vaccine. A slow moving EMA could see the EU fall further behind its peers.

It’s worth noting that the EU had secured enough vaccine doses to cover 183.5% of the population.

While Johnson & Johnson may be able to ease the pain, it will be some time before vaccination rates hit appropriate levels.

An Economic Recovery in the Waiting. COVID-19 Vaccination Rates Suggest a Longer Wait for Some

Economic Recovery

Following the 2nd quarter economic meltdown of 2020, major economies rebounded in the 3rd quarter.

A reopening of borders and businesses spurred the recovery. Many hoped that the worst of the COVID-19 pandemic had passed.

Going through the 4th quarter, however, conditions deteriorated rapidly once more.

The number of COVID-19 cases soared across the U.S, Europe, and beyond.

Amidst the doom and gloom, the Chinese economy provided a glimmer of hope.

Last week, 4th quarter GDP numbers impressed. While a spike in new COVID-19 cases in China muted the impact of the stats on riskier assets but the recovery was plane to see.

Other economies, have been less fortunate.

Those most at risk of an extended period of contraction are economies most dependent upon consumption and tourism.

For now, the global financial markets appear to be signaling a more uniform global economic recovery through 2021.

The latest COVID-19 numbers, vaccination rates, and containment measures paint a different picture, however.

The Economic Calendar

Next week, 4th quarter GDP figures are due out of the U.S, Germany, and France to name but a few.

Looking at the forecasts, the U.S economy is projected to grow by 4.4% in the 4th quarter.

It’s a different story for France and Germany, however.

Extended lockdown periods through late 2020 will likely lead to another sizeable quarterly contraction.

Economists have forecasted the French economy to contract by 3.2% and Germany’s by 4.6%.

Relative to the 2nd quarter of 2020, the contractions are relatively mild. By historical standards, however, these are quite dire forecasts.

Vaccinations Rates

According to the Bloomberg Vaccination Tracker, the U.S vaccination rate was 5.23 doses per 100 people as at 20th January.

With President Biden’s aim of 100 million vaccinations in 100 days, this is expected to accelerate in the coming weeks. The numbers have already picked up from quite dire levels just last week. As at 10th January, the U.S had had a vaccination rate of just 2.44 doses per 100 people.

While other countries face supply issues, this has not been the case for the U.S. To put it into perspective, 48% of shots distributed to states in the U.S have been administered. In numeric terms, 17.18 million doses have been administered.

Much will now depend on whether the U.S President meets his 100 million target or needs to reintroduce lockdown measures.

At the time of writing, the total number of COVID-19 cases in the U.S sits at 24,998,975, with the total number of deaths hitting 415,894.

Any acceleration in new cases and the U.S government may have little choice but to contain the spread. With labor market conditions still in dire straits, this would have painful consequences for the U.S economy.

The only goods news is that the Democrats now control both houses. Delivering fiscal support should be easier. Bringing unemployment back to pre-pandemic levels, however, is likely to be a far more difficult task.

Elsewhere, a number of governments have made strong progress in driving vaccinations. This bodes well for more rapid economic recoveries. These nations are few and far between, however.

Israel continues to lead the charge, with a vaccination rate of 32.56 doses per 100 as at 20th January. The U.A.E remains ranked 2 in terms of vaccination rates. (20.11 doses per 100 as at 19th Jan).

As at the 20th January, the UK is also at the top end of the table, with a vaccination rate of 7.59 doses per 100.

The EU

For the EU, however, the slow authorization of COVID-19 vaccines and apparent bad planning has been reflected in the figures.

EU wide, the vaccination rate stood at just 1.51 doses per 100 people as at 20th January. When considering the fact that the total number of COVID-19 cases is more than 10 million, this remains a concern.

Not only are we likely to see economic divergence globally but also within the EU.

Germany’s vaccination rate stood at 1.56 doses per 100 as at 20th January. By contrast, France’s vaccination rate was just 1.07.

Italy and Spain were amongst leading EU member states with rates of 2.07 and 2.21 doses per 100. These rates are also on the lower end for developed nations, however.

For a full breakdown of vaccination rates by country, please visit Bloomberg Vaccination Tracker page here.

Supply and Demand

Since the approval of vaccines in the U.S, Europe, and beyond, supply has become a focal point.

Back in December, we had highlighted supply as a key consideration as governments procure vaccines.

Some governments have been able to secure enough vaccines to inoculate 100% of their populations.

Others will barely touch the surface and will have to wait.

When considering the vaccination rates today and the need for 2 doses, it could be a long wait.

Some governments will undoubtedly be wanting to avoid going into another winter once this winter season passes.

Until there are more vaccine options and greater supply, however, this remains a credible risk for some.

As things stand, therefore, we continue to see Johnson & Johnson and AstraZeneca as two key players in the fight against the global pandemic.

Johnson & Johnson is key due to its goal to deliver a single dose vaccine. AstraZeneca remains key due to is affordable and easy to transport vaccine, not to mention manufacturing capabilities.

Government agencies including the EMA will need to authorize the use of these vaccines more hastily to support a speedier economic recovery.

The markets can then begin to look to developing economies that have continued to struggle since the beginning of the pandemic. Failure of the likes of Europe to catch up with the U.S and even the UK, could lead to an economic decoupling.

The Latest COVID-19 Numbers

At the time of writing, there were a total of 97,384,877 confirmed COVID-19 cases and 2,085,507 related deaths.

By geography, the U.S had reported 24,998,975 cases and 415,894 COVID-19 related deaths.

India reporting 10,611,719 cases, with Brazil reporting 8,639,868 cases.

Sitting behind Russia (3,655,839) remained the UK (3,505,754).

France (2,965,117), Italy (2,414,166), Spain (2,412,318), and Germany (2,090,161) reported a combined 9,881,762 cases.

Looking Ahead

Existing vaccine providers are going to need to materially increase supply in order to support the bullish outlook towards the economic recovery.

Market sensitivity to reports of any supply constraints will likely build in the current quarter. Failure to ramp up vaccination rates coupled with supply constraints would have an even more material impact on risk sentiment. All of this is before considering a continued rise in new cases and further extensions to lockdown measures.

For now, the pressure will be on the likes of AstraZeneca and Johnson & Johnson to deliver.

A marked increase in supply from Pfizer Inc. and Moderna Inc. would also be welcome.

At some point, however, the focus may well shift to how well or how badly governments have performed.

COVID-19 Vaccine Update – Some EU Member States Break Ranks

EU Vaccine News

Following the EMA’s decision to bring forward the review of the AstraZeneca vaccine, EU member states are looking to get ahead in placing orders.

Over the weekend, news hit the wires that the Irish government was in talks to secure delivery of the yet to be authorized vaccine.

Pfizer Inc. supply issues experienced across member states has resulted in bid to secure supply from elsewhere.

Ireland expects to receive more than 3 million doses of the AstraZeneca vaccine. By receiving the vaccine ahead of the EMA recommendation and EU Commission authorization, it would mean that the vaccine could be administered immediately upon authorization.

Last week, the EMA had indicated that upon recommendation, the vaccine would be widely available by mid-February.

Ireland would therefore be around 2-weeks ahead of other EU member states. More importantly, Ireland may also avoid jostling with other EU member states for supply.

Having seen Britain go it alone on the vaccine front and approve the AstraZeneca vaccine late last year, Britain’s vaccination rates are well ahead of any of those seen across the EU.

Vaccinations

According to the Bloomberg Vaccination Tracker, Ireland’s vaccination rate stood at 1.90 doses per 100 people as at 13th January.

While well short of the likes of the Israel, the U.A.E and even the UK and the U.S, its well ahead of many other EU member states.

To put it into perspective, the EU has a vaccination rat of 1.41 doses per 100 people as at 19th January.

Italy and Spain had rates of 2.01 and 2.08 doses per 100 as at 19th January.

By contrast, however, France had a vaccination rate of just 0.90 doses per 100. The numbers from the Netherlands were even more alarming. As at 19th January, the Netherlands had a vaccination rate of just 0.45 doses per 100 people.

With the broad spread of rates, it is not wholly surprising that some EU member states are looking to jump the gun in securing vaccine supply.

Ireland is certainly not amongst the worst affected by the COVID-19 pandemic.

At the time of writing, Ireland had a total of 176,839 total COVID-19 cases and 2,708 related deaths.

While well below the numbers reported from the likes of France, Germany, Italy, and Spain, there is some urgency globally to secure more vaccines.

New strains of the coronavirus have proved significantly more virulent and as a result could have a significant impact on economic conditions.

Germany has already announced an extension to its lockdown. Merkel also talked of a possible need to shut down borders in order to protect the country from new strains.

Without an adequate vaccine supply and vaccination drive, the impact of the new strains could be devastating.

COVID-19 numbers from the UK had certainly sent a warning to neighboring countries over the holidays.

Global Numbers

Leading the charge geographically, by vaccination rate, continues to be Israel.

As at 19th January, Israel had a reported vaccination rate of 29.78 doses per 100, up from 25.91 as at 17th January.

The U.A.E continued to trail Israel in 2nd place, with a rate of 19.21 doses per 100.

Sitting behind Bahrain in 3rd was the UK, with a vaccination rate of 7.07 doses per 100. This was up from 6.45 doses per 100 as at 17th January.

Looking at the numbers, A marked increase in vaccination rates is going to be needed to support a speedier economic recovery.

Further extensions to existing lockdown periods could begin to hit the prospects of a 2nd quarter recovery.

While we see economic divergence globally, stemming from marked differences in vaccination rates, the same is likely within the EU.

For the Eurozone economic outlook, France, Germany, Italy, Spain, and the Netherlands will need to materially ramp up vaccinations.

It will be interesting to see whether the issue is raised during the ECB press conference tomorrow. How does the ECB see growth when considering the divergence in vaccination rates across member states?

For a full breakdown of vaccination rates by country, please visit Bloomberg Vaccination Tracker page here.

The Latest COVID-19 Numbers

At the time of writing, there were a total of 96,625,755 confirmed COVID-19 cases and 2,065,698 related deaths.

By geography, the U.S had reported 24,806,964 cases and 411,486 COVID-19 related deaths.

India reporting 10,596,442 cases, with Brazil reporting 8,575,742 cases.

Sitting behind Russia (3,612,800) remained the UK (3,466,849).

France (2,938,333), Italy (2,400,598), Spain (2,370,742), and Germany (2,071,473) reported a combined 9,781,146 cases.

Looking Ahead

The AstraZeneca vaccine remains the key to bringing the pandemic under control near-term. This is largely due to an expected abundance of supply.

When considering the current vaccination rates, however, there is one other factor to consider.

Pfizer Inc., Moderna Inc., and AstraZeneca’s vaccines are 2-dose vaccines. This means that another round of vaccines is going to be needed for effective protection against the virus.

When considering current vaccination rates, some of the more adversely affected nations may not be anywhere 50% vaccinated before the 2nd quarter.

This is yet another factor for the markets to consider in terms of any economic recovery.

The availability of a single dose vaccine may not be far off, with Johnson & Johnson set to release data imminently. In all reality, however, supply constraints could limit the availability of a single dose vaccine beyond U.S borders.

Johnson & Johnson Numbers

Johnson & Johnson had previously projected to deliver 12 million doses by the end of February and 100 million doses by the end of June.

According to recent reports, however, Johnson & Johnson may a number of months behind.

That suggests that 1 billion doses by the end of 2021 may also be an ambitious target.

Pfizer Inc., Moderna Inc., AstraZeneca, Sputnik V, and China’s two vaccines will be key near-term. Ultimately, however, it will likely be a single dose vaccine that brings an end to the COVID-19 pandemic.

Availability across the globe is going to be needed, however, for the pandemic to truly come to an end.

As we have seen in the early days of the COVID-19 vaccines, richer nations have cornered much of the vaccine supply.

This will also need to change for the number of new cases across the globe to begin falling.