US OPEN: US500 approaches 4,450 pts support

• US markets trade slightly lower

• US500 tests support zone at 4,450 pts

• Pfizer drops after Q4 earnings release

US markets launched today's trading slightly lower. However, losses were quickly recovered and now all major Wall Street indices traded slightly higher or flat on the day. Scale of moves is minor so far, just as it was the case with European indices today. Economic calendar for today is almost empty and traders look towards earnings as potential drivers. Pfizer and Harley-Davidson experienced large share price swings following release of Q4 2021 results. Lyft will publish results for the final quarter of 2021 today after close of the session.

Source: xStation5

S&P 500 (US500) halted the recovery move last week and started to move lower. A point to note is that the recent local low matched a local low from the beginning of September 2021 (4,550 pts area). Moreover, the recent local low matched a local low from the beginning of October 2021 (4,265 pts area). As a result, a potential head and shoulders pattern surfaced on the chart. Should US500 drop below 4,450 pts support, the way towards the neckline of the pattern at 4,265 pts will be left open. Breaking below this hurdle could trigger a drop to 3,720 pts area if the range of the pattern is executed in a textbook manner.

Company News

Pfizer (PFE.US) reported results for Q4 2021 before the Wall Street session opened today. Company reported adjusted EPS of $1.08 (exp. $0.87) and revenue of $23.84 billion (exp. $24.12 billion). Revenue more than doubled in Q4 2021 compared to Q4 2020, thanks to vaccine sales. Covid-19 vaccine sales generated $12.5 billion in revenue for Pfizer in the final quarter of 2021. Company expects Covid-19 vaccines and treatments to remain a strong driver of earnings in 2022 - Pfizer expects vaccine sales to reach $32 billion and antiviral Covid treatment pill sales to reach $22 billion. Full-2022 sales are expected to reach $98-102 billion while adjusted EPS is expected at $6.35-6.55.

Novavax (NVAX.US) plunged over 5% in premarket trading today following a Reuters report. According to Reuters, Novavax delivered just 10 million vaccine doses so far out of the promised 2 billion in 2022. It was also reported that Novavax delayed shipments of vaccine shots to Europe and lower income countries on the back of regulatory issues (late approval by WHO). 

Harley-Davidson (HOG.US) is trading higher today after reporting an unexpected profit for the final quarter of 2021. Adjusted EPS reached $0.15 while the market expected an adjusted loss per share of $0.32. Adjusted revenue jumped 40.2% YoY, to $1.02 billion. Company noted strong demand as well as higher motorcycle prices as a driver of better-than-expected earnings. On top of that, the company decided to slash costs by exiting unprofitable markets. Last but not least, both Q4 results and future outlook are positively impacted by the EU decision to scrap the 31% tariff on the company's products.

Pfizer (PFE.US) is taking a hit in spite of releasing a solid quarterly report. Stock is trading near a key support level - combination of lower limit of the Overbalance structure and 38.2% retracement of the upward impulse launched in March 2021 ($50.75 area). Breaking and finishing the day below this support could hint that more weakness for the stock may be looming as break below Overbalance structure hints at potential trend reversal. Source: xStation5