Here are the most important news, trends and analysis that investors need to start their trading day:
- Stocks look steady even as 10-year yield jumps to late 2019 high
- Pfizer expects $54 billion in 2022 sales on Covid vaccine, treatment pill
- Peloton falls after co-founder John Foley is replaced as CEO
- SoftBank plans to take Arm public after Nvidia's takeover collapses
- Meta drops with Peter Thiel leaving board, Facebook in Europe in question
U.S. stock futures were relatively flat Tuesday, pointing to a second day of calm after last week's earnings-driven trading swings. The 10-year Treasury yield rose to 1.96% on Tuesday, a high not seen since November 2019 ahead of Thursday's key consumer inflation data. The Nasdaq, already in a correction, led Wall Street lower Monday, dropping nearly 0.6%. The S&P 500 lost almost 0.4%. The Dow Jones Industrial Average was virtually unchanged, edging up just over 1 point.
- More than halfway through earnings season for S&P 500 companies, 77% of them beat earnings estimates and 76% topping revenue expectations, according to FactSet. Over 70 S&P 500 companies are set to report quarterly results this week, including Dow stock Disney after the bell Wednesday.
Pfizer projects record-high revenue this year, saying Tuesday it expects to sell $32 billion of its Covid shots and $22 billion of its antiviral coronavirus treatment pill Paxlovid in 2022. However, Pfizer missed estimates with fourth-quarter revenue and the stock lost 3.5% in the premarket. Per-share earnings did exceed estimates.
Pfizer has started a clinical trial late last month of a Covid vaccine that targets the omicron variant in adults ages 18 to 55. CEO Albert Bourla has said the company expects to have the vaccine ready by March. Pfizer is also working to ramp up production and delivery of Paxlovid. Bourla has said Pfizer expects to produce 6 million to 7 million courses in the first quarter and 120 million courses by year-end.
Peloton shares dropped more than 2% in Tuesday's premarket, way off earlier lows, after the embattled connected fitness company said it will replace co-founder John Foley as CEO with former Spotify and Netflix CFO Barry McCarthy. Foley will become executive chairman. Peloton also plans to slash 2,800 jobs or about 20% of corporate employees.
In addition, the company cut full-year revenue and connected fitness subscriber guidance. Peloton on Monday closed up 20% on speculation that companies including Amazon and Nike may be interested in buy it. However, even including Monday's pop, the stock was down 80% from its February 2021 all-time high of $155.52.
Nvidia's planned acquisition of Arm from SoftBank has collapsed due to "significant regulatory challenges," the companies said in a joint release Tuesday. The deal was originally announced in 2020, with a value at the time of $40 billion in Nvidia stock and cash.
SoftBank said Arm will now prepare for a public offering within the year ending March 31, 2023. Arm makes technology that is at the core of every smartphone processor, including Apple's iPhones and Android devices running on Qualcomm chips. It counts nearly every major semiconductor company as a client. Shares of Nvidia fell 1% in the premarket.
Facebook parent Meta Platforms fell 1.4% in Tuesday's premarket, continuing a post-earnings slide that's sent the stock down 30% since quarterly results last Wednesday. Meta said on Monday billionaire tech investor Peter Thiel, an early Facebook backer, will step down from its board.
Digging through last Thursday's annual report, Meta said it's considering shutting down Facebook and Instagram in Europe if it can't keep transferring user data back to the U.S. Regulators in Europe are currently drawing up new legislation that will dictate how European Union citizens' user data gets transferred across the Atlantic.