- Merck's shares will become the worst member of Dow Jones on Tuesday.
- MRK shares move 4.8% lower as tariff concerns grow.
- Trump hinted at a large announcement that this week later.
- Trump signed a directive to put pressure on foreign drug manufacturers.
Merck (MRK) Loses its step on Tuesday, as the US wide stock market will give up during the last two weeks during a strong demonstration. MRK shares were the worst in Dow Jones's industrialized (DJIA), as much as 4.8%sinking at the time of writing. Merck deals with great uncertainty as to whether the Trump administration adds additional tariffs for pharmaceutical products, bearing in mind the US President's belief that pharmaceutical products should be produced at home.
Trump briefly excited investors on Tuesday when he hinted at the upcoming announcement with the new Prime Minister of Canada, Mark Carney. But the market quickly lost interest when the President hinted that it might not necessarily be related to trade.
“We have a very big announcement to do,” President Trump told reporters. “Like as big as it can, and I don't tell you what and it is very positive. It's really very positive and this message will be done either on Thursday or Friday or Monday.”
S&P 500, Dow Jones and Nasdaq moved 0.8-1% lower by noon. PALANTIR (PLTR) Stock sank surprisingly more than 13%, despite the fact that on Monday night there are strong guides during its quarter's profit.
Merck's stock news
On Monday, President Trump signed an executive order that would exert additional pressure on foreign manufacturers of pharmaceutical products – a policy that can increase the expenses of US pharmaceutical giants that order their production to foreign companies.
The Trump EO is directing the US Food and Drug Administration to reduce US pharmaceutical production companies in the US. In addition, the organization directs the agency to increase the fees from which it calls for the inspection of foreign manufacturing companies and to increase the enforcement of the reporting of the active ingredients of foreign manufacturers.
All in all, these directives are likely to increase the expenses of foreign pharmaceuticals who have to take higher prices for their US customers.
Trump also highlighted the Environmental Protection Agency (EPA), which he said would considers its approval process for pharmaceutical factories. Trump has said that the current time for the construction of a US pharmaceutical factory can last from five to ten years.
This directive pauses to pharmaceutical investors, as this means that Trump is likely to take the tariffs of foreign drugs and ingredients seriously, as he claimed in mid -April. On Monday, he told some journalists that the pharmaceutical industry will probably be informed over the next two weeks.
So far, pharmaceuticals have been one of the few industries that have acquired a immediate exemption from tariffs. But Trump told reporters in mid -April that “not too far in the future”, which will change to bring pharmaceutical production to the shores of the US. In response to his possible tariff questions, Trump said at the time: “The higher the tariff, the faster they come.”
Merck recently broke a billion dollar production facility at Delaware in Wilmington. The nearly half a million square feet of a plant is Keytruda's future home. Keytruda is Merck's leading drug and one of the most successful drugs used to treat cancer worldwide. The factory is still several years away.
Merck shares forecast
Merck shares have been down in the spiral for some time, so shareholders and curious bulls probably wonder where the sale ends. Of course it is difficult to say, but there are several levels on the week below.
First, the 78.6% Fibonacci extension sits $ 73.51. This level is quite close to the $ 70-73 demand zone, which pushed prices most of the time until the beginning of 2022. This makes it clear that the proper contribution of the MRK shares is likely to be less than 10%of the current price action.
Of course, pharmacy stock There is a grace of the Trump administration like everyone else, but the chart below suggests that there is an attractive purchase point nearby.
MRK WEEKLY shares chart
