Dow went up 71, decliners over advancers 2-1 & NAZ slid back 62. The MLP index was off 1+ to the 239s & the REIT index lost 1 to the 379s. Junk bond funds fluctuated & Treasuries had heavy selling, which increased yields substantially with the 10 year Treasury yieldat a hefty 4.05%. Oil was off chump change but held above 81 & gold dropped 26 to 1982 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Merck (MRK) reported Q2 revenue that topped expectations on strong sales of its blockbuster cancer drug Keytruda & HPV vaccine Gaedasil. The pharmaceutical giant posted a quarterly loss, however, due to charges associated with the company's acquisition of Prometheus Biosciences earlier this year. Earnings swung to a net loss of $2.35 per share, from EPS of $1.55 during the
year-earlier period. Excluding acquisition & restructuring costs, EPS was $2.06 for the qtr. The loss reflects a $10.2B charge related to the acquisition of Prometheus, which specializes in treatments for autoimmune diseases. The deal was completed in mid-Jun. Revenue of $15.0B for the qtr rose 3% from a year earlier. “What
you really see...was long sustained underlying growth, and it was
driven by oncology and vaccines, and the Gardasil franchise in
vaccines,” CEO Robert Davis said. The company raised its 2023 sales
forecast to $58.6-59.6B, slightly higher
than the $57.7-58.9B guidance provided in late
Apr. Merck lowered its full-year adjusted EPS outlook to
$2.95-3.05, from a previous forecast of $6.88-7,00. The company said its business growth during the qtr
contributed 24¢ per share to the full-year earnings guidance, but
was offset by the $4.02 per share charge related to the Prometheus deal. The outlook also includes previously disclosed one-time charges related to the acquisition of Imago BioSciences last year & an upfront payment for a drug development agreement with Kelun-Biotech. “We
see strong growth to the full year, and the guidance range you are
referencing implies growth of 10% to 11% if you exclude the one-time
impact,” Davis said. “It’s a strong beat.” The stock was off 1.41.
If you would like to learn more about MRK, click on this link:
club.ino.com/trend/analysis/stock/MRK_aid=CD3289&a_bid=6aeoso5b6f7
Merck beats on revenue, but posts quarterly loss due to Prometheus deal
CVSNealth (CVS) is cutting 5000 jobs to reduce costs as the retail pharmacy giant furthers its push into health-care offerings. The pharmacy chain had about 300K employees in the US at the end of last year. A
CVS spokesperson said they are not expected
to affect “customer-facing colleagues in our stores, pharmacies,
clinics, or customer services centers.” Employees laid off will receive severance pay & benefits, including
access to outplacement services. “As part of an enterprise
initiative to reprioritize our investments around care delivery and
technology, we must take difficult steps to reduce expenses,” a
spokesperson said. “This unfortunately includes
the need to eliminate a number of non-customer facing positions across
the company.” CVS has sharpened its focus on health care over the past few years, following similar moves by rivals. The company moved deeper into patient care with its nearly $8B
acquisition of health-care provider Signify Health & $10.6B
deal to buy Oak Street Health, which operates primary care clinics for
seniors. CVS cut its annual earnings forecast last qtr, citing the cost of those deals. The stock was off 72¢.
If you would like to learn more about CVS, click on this link:
club.ino.com/trend/analysis/stock/CVS_aid=CD3289&a_bid=6aeoso5b6f7
CVS to slash 5,000 jobs as company deepens costly health-care push
Pfizer (PFE) reported Q2 adjusted earnings that topped expectations, but posted revenue that fell short of estimates due to a plunge in Covid product sales. The company also said it is prepared to cut costs if Covid-related revenue continues to disappoint this year. Sales were $12.7B, down 54% from the same period a year ago. “The
contraction in revenues was driven by the anticipated decline in
Paxlovid and Comirnaty sales,” CFO David Denton said. The company's Covid vaccine raked in $1.49B in sales, down 83% from the year-ago qtr. Its Covid antiviral pill Paxlovid posted $143M in revenue, a drop of 98%. Together,
the products pulled in $1.6B in revenue for the qtr. That
compares with roughly $17B in sales during the same period a year
ago. The company reaffirmed its forecast for $13.5B in Covid vaccine sales & $8B in revenue for Paxlovid for 2023. For the qtr, EPS was
41¢, down from $1.73
during the same period a year ago. Excluding certain items, the EPS was 67¢ for the qtr. Looking
ahead, the company narrowed its 2023 sales forecast to
$67-70B, from a previous forecast of $67-71B. PFE reiterated its full-year adjusted EPS outlook of $3.25-3.45.
CEO Albert Bourla said that there is
clearly a “higher level of uncertainty” about demand projections for
Covid products than for the rest of the company's business. He
noted that H2 will “play a bigger role in
informing our expectations for the long-term demand” of the company's
Covid vaccine & Paxlovid. Utilization “follows very closely” with
Covid infection rates, he added. The stock was off 44¢.
If you would like to learn more about PFE, click on this link:
club.ino.com/trend/analysis/stock/PFE_aid=CD3289&a_bid=6aeoso5b6f7
Pfizer beats on earnings, but revenue misses as Covid boom fades
Gold prices kicked off Aug in the red as the appreciation of the $ weighed on precious-metals prices even after the latest data on the US manufacturing sector showed it contracted for the 9th consecutive month in Jul, while employment openings in the US edged lower in Jun. Gold futures expiring in Dec by $30 (1.5%) to settle at $1978 per ounce. Gold futures were under pressure as Treasury yields edged higher & the $ firmed, despite mixed batch of economic data which offers more insight into the state of the US economy.
Gold futures settle lower to start August as Treasury yields and the U.S. dollar tick up
West Texas Intermediate (WTI) crude oil fell off the highest in more than 3 months, dropping after 3 rising sessions on a rising $. WTI crude for Sep closed down 43¢ to settle at $81.37 per barrel. Sep Brent crude, the global benchmark, was last seen down 20¢ to $85.23. The drop comes despite still-tight supplies as OPEC+ cuts & one-M barrels per day of voluntary production cuts from Saudi Arabia imposed for Jul & Aug, with the country expected to extend them to Sep when OPEC+ meets later this week. Today's drop comes as the $ strengthened, with the ICE $ index last seen up 0.45 points to 102.3, cutting into the price of $-priced commodities. Middling demand from China, as the country's manufacturing sector contracted in Jul, is also limiting prices.
WTI Crude Oil Falls From a Three-Month High as the Dollar Strengthens
Higher interest rates have become a major driver of stock prices. Unfortunately high rates may around for some time going forward.
Dow Jones Industrials
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