Tuesday Market Overview

Today Germany suspended its certification of the Nord Stream II pipeline through the Baltic which is supposed to deliver Russian gas to Western Europe, in retaliation for Russia's support of Belarus immigration scams and pressure being put on Ukraine by Russia. The gas price in Europe rose 9%. This is truly a post-Angela Merkel moment and may herald other energy initiatives as well, notably copying France with nuclear power plants, which she, despite being a physicist, shut down. 

While gold gained modestly again today, cryptocurrencies fell hard. 

Business newspaper article

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Pharma

*Here is some good news. Moderna MRNA set up a deal to donate 70 mn vaccine doses to Covax, part-funded by the EU. US Pfizer PFE will license its oral Covid-19 pills to generic drug makers, following the lead of Merck MRK

Here is some bad news. This move crushed other drug firms including our Roche RHHBY and Astra-Zeneca, hitting AZN despite it having good phase II trial data on its AZD8601 to treat heart disease, down nearly 4%.

*Other drug-makers also dropped, TEVA by 2.54% in the wake of Compugen's CGEN losses, now another $2 today despite a confirmatory share buy from Bristol Myers. BMY likes partnerships and purchase of small and mid-sized drug firms.

*Zymeworks of Canada fell some more. Its forecast earnings loss level in the current quarter was upped to $1.206 from $1.227, an improvement. ZYME.

*India's Dr. Reddy's (RDY) was downgraded to buy from strong buy with an earnings forecast of 46 cents vs 67. 

*Grifols of Spain is up 2.11% but I have no idea why the plasma firm rose. GRFS.

*Glaxo Smith Kline lost 2% today, its investor day. GSK.

*Recently listed Organon, OGN, is now expected to earn $1.311/sh in the current quarter. The earlier estimate was $1.34. 

Tech & tel

*Vodafone, the UK telco, reported today in euros on its first half, creating difficulties for those aiming to figure out Q2 results for the UK firm.t saw a drop it was covering up but the changed sterling exchange rate made it hard to sort things out. VOD is British but sells its services mostly in EU countries, starting with Germany. It said its revenues beat consensus forecasts in H1, up 2.8% to euros 19,010 mn and that its EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 6.5%, both against fiscal 2020-1 which closed in April. However, the Q2 rise was only 5 euro cents. Return on capital was 6.3% and it announced a 53 euro pence dividend, up 6.85%. The stock rose 6.17% at the opening here but dropped later to 5.6%. Sterling today rose to 1.3462 pounds per dollar but of course, the half-year levels were not that clear. The conference call revealed that Vantage Towers are on the block and that VOD wants to build up its position further in Germany with Orange or Deutsche Telekom. It had higher debt, up 3.7% from the close of its prior year. CEO Nick Read talked about lots of tech plays. Whether they will pay off is unclear.

It also talked about Vodapay and MPesa in Africa, which first led to our buying VOD. Now there i also Ziggo. 

VOD also plans to integrate former Liberty communication systems in Spain and Egypt. It lost money in H1 but it raised its guidance. 

*Uruguayan Mercado Libre, MELI, lost $1.55/share after it new equity sales were at a 5.1% discount from its earlier stock. MELI raised $1.55 bn. It became a key holding yesterday for Temasek of Singapore which is selling Chinese stocks.

*Qualcomm and BMW will create self-drive cars using QCOM Snapdragon chips for ride-vision, vision perception, and driver-assisted systems. 

*Credit Suisse wrote that Microsoft has a 19% upside. It is also a favorite of Value Line.

Funds and finance

*Atlantica Sustainable Infrastructure Fund, AY, was downgraded to hold from buy with a target EPS in Q4 of 10.8 cents/sh, down from 34 earlier. The share rose all the same. 

*Scotia Bank Q4 eps was upped to C$1.92 from 1.90. BNS.

*CBOE has bought NEO from Aequitas Innovation for an unknown sum to boost its prowess in global securities markets. It will add Match Now to its derivative and securities markets by the end of the first half of next year. The stock rose over 2%. CBOE is Chicago Board Options Exchange but it has outgrown its moniker. 

Energy

*Nutrien of Canada is doing a $1.8 bn redemption and a purchase of $300 mn of debt in the period until Dec. 14. NTR makes and sells plant food and other farm products. NTR.

*Earthstone Energy's Q4 eps was raised to .367 from .36. ESTE.

*Brazilian Cosan reported net profit of 3.26 bn reais in Q3 and its investor day today did not help its price in part because there were so many cautions over its estimates and forward-looking statements. Its stock fell. CSAN.

*China will no longer fund coal power plants outside its borders. Inside is something else. But it means that new coal power plants in Asia will total 22 gigawatts, according to the Center for Research on Energy and Clean Air. We need to send Manchin to the PRC.

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