April 10, 2024 4:36pm

After inflation data came in hotter than expected as the Nasdaq dipped 1.01%

Who stands in-front, beside and behind investors - RMi

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The present and future value of RegMed Investors (RMi) NEWS sheds light on the stem, cell and gene therapy sector’s risks to share pricing and the sector’s upside acrobatics and potential downslides.

I write this blog/newsletter to inform investors with facts and supporting numbers focused on what they need to hear that others will not say or write about – facts in evidence! 

 

Wednesday: The Dow closed DOWN -422.16 points or -1.09%, the S&P closed -49.27 points or -0.95% while the Nasdaq closed DOWN -136.28 points or -0.84%

 

Henry’omics:

We need to more than consider the economic environment - rising rates and inflation to comprehend the micro re “our” universe of cell and gene therapy companies …

Market indexes and sector equites tanked on Wednesday after March inflation data came in hotter than expected, likely pushing off interest rate cuts by the Fed that investors have been anticipating.

With the exception of energy, all sectors in the broad market index were red for the day. Real estate fell around 4%, leading sector losses for the day. The S&P 500 had been treading water in April in anticipation of this inflation report following a roaring start to the year where the benchmark rallied 10%, its best first-quarter gain in five years. <CNBC>

“As we continue to see multiple reports in a row that are higher-than-expected, it becomes more difficult for the Fed to advocate cutting rates any time soon.” <Chris Zaccarelli, Independent Advisor Alliance chief investment officer>

Economic Data Docket: The CPI in March rose 0.4% for the month and 3.5% year-over-year, versus estimates of a 0.3% monthly increase and 3.4% year over year. Core CPI, which excludes volatile food and energy prices, accelerated 0.4% from the previous month while rising 3.8% from a year ago, compared to estimates for 0.3% and 3.7%, respectively. CPI in April increased at a 3.2% annual pace for all items.

  • Fed officials at their March meeting expressed concern that inflation wasn’t moving lower quickly enough though they still expected to cut interest rates at some point this year. At a meeting in which the Federal Open Market Committee again voted to hold short-term borrowing rates steady, policymakers also showed misgivings that inflation, while easing, wasn’t doing so in a convincing enough fashion. The Fed currently targets its benchmark rate between 5.25%-5.5%
  • On the downside, they cited a more balanced labor market, enhanced technology along with economic weakness in China and a deteriorating commercial real estate market.
  • They also discussed higher-than-expected inflation readings in January and February. Chair Jerome Powell said that it’s possible the two months readings were caused by seasonal issues, though he added it’s hard to tell at this point. There were members at the meeting who disagreed. <CNBC>

 

Wednesday’s RegMed Investors’ (RMi) opening bell: “another little progress against inflation report? Will it provide a stumbling block to “our” universe’s share pricing - again?” … https://www.regmedinvestors.com/articles/13411

 

Advance/Decline (A/D) Line:

  • Wednesday’s advance/decline line at the open was negative with 3 incliner, 31 decliners and 1 flat; ending with a negative close of 5 incliners, 28 decliners and 2 flats

 

Ebb and flow of MY covered sector cell and gene therapy session daily “endings”:

Q2/24: 6 negative and 2 positive closes

Q1/24:

  • March, 1 holiday, 8 positive and 12 negative closes
  • February, 1 holiday, 9 negative and 11 positive closes
  • January: 2 holiday, 12 negative and 8 positive closes

 

Key Metrics:

The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:

  • Wednesday, the IBB was down -1.80% and the XBI was down -1.84%

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Wednesday was up +0.84 point or +5.61% at 15.82

 

Wednesday’s Closing Down (10 of 28):

  • Alnylam Pharmaceuticals (ALNY -$3.49 after Tuesday’s -$0.14 and Monday’s +$2.48),
  • CRISPR Therapeutics (CRSP -$3.45 after Tuesday’s +$1.10 and Monday’s +$1.19),
  • Beam Therapeutics (BEAM -$2.26 after Tuesday’s +$0.51 and Monday’s +$0.61),
  • Blueprint Medicine (BPMC -$1.71 after Tuesday’s +$0.66 and Monday’s -$0.11),
  • Vericel VCEL -$1.16),
  • Intellia Therapeutics (NTLA -$1.13 after Tuesday’s +$0.78 and Monday’s +$0.52),
  • BioLife Solutions (BLFS -$0.90 after Tuesday’s +$0.85 and Monday’s +$0.18),
  • Verve Therapeutics (VERV -$0.74 after Tuesday’s +$0.35 and Monday’s -$0.12),
  • Solid Biosciences (SLDB -$0.73 after Tuesday’s -$0.35 and Monday’s -$0.26),
  • AxoGen (AXGN -$0.53)

Flat (2):

  • Precigen (PGEN
  • Cellectis SA (CLLS)

Wednesday’s Closing Up (5 of 5):

  • Ultragenyx Pharmaceuticals (RARE +$1.05 after Tuesday’s +$0.59),
  • Ionis Pharmaceuticals (IONS +$0.11 after Tuesday’s +$0.59 and Monday’s -$0.98),
  • Harvard Apparatus RT (OTCQB: HRGN +$0.09 after Tuesday’s -$0.98 and Monday’s $0.00),
  • Brainstorm Cell Therapeutics (BCLI +$0.0190 after Tuesday’s -$0.1475),
  • Homology Medicine (FIXX +$0.0071),

 

Q2/24 – April

  • Wednesday closed negative with 5 incliners, 28 decliners and 2 flats

 

The BOTTOM LINE: Markets and the cell and gene therapy sector “fumbled on Wednesday after hotter-than-expected inflation data threw cold water on hopes the Fed would enter its monetary policy easing phase soon.

Minutes from the Fed's March policy meeting reflected officials' concerns that inflation's progress toward that target might have stalled, and restrictive monetary policy may need to be maintained for longer than anticipated. <Reuters>

  • Equity prices were further pressured by benchmark Treasury yields, which breached 4.5% to touch its highest level since November.
  • Interest rate-sensitive stocks were hardest hit, with real estate primed for its biggest one-day percentage drop since June 2022.

Indexes wobbled again on Wednesday’s negative close after Tuesday after Monday closing POSITIVE as investors kicked off a 2nd week that saw CPI inflation data leaving blood in the market and sector.

 

The test for rate-cut views and the start Q2 earnings season.

  • The CPI data prompted markets to reset expectations regarding the timing and extent of Fed rate cuts.

 

Last week, I wrote that I favor … caution over the next few weeks! Wednesday … proved me true!

 

The top three (3) performing in the session:

  • Wednesday: Ultragenyx Pharmaceuticals (RARE), Harvard Apparatus RT (OTCQB: HRGN) and Compass Therapeutics (CMPX)
  • Tuesday: CRISPR Therapeutics (CRSP), BioLife Solutions (BLFS) and Intellia Therapeutics (NTLA)
  • Monday: Alnylam Pharmaceuticals (ALNY), CRISPR Therapeutics (CRSP) and Beam Therapeutics (BEAM)

The worst three (3) in the session:  

  • Wednesday: CRISPR Therapeutics (CRSP), Alnylam Pharmaceuticals (ALNY) and Blueprint Medicine (BPMC)
  • Tuesday: Adverum Biotechnologies (ADVM), Mesoblast (MESO) and Generation Bio (GBIO)
  • Monday: Ionis Pharmaceuticals (IONS), Vericel (VCEL) and Voyager Therapeutics (VYGR)

Welcome to my world of defining the “grey’ in our universe!

  • Right up front, “I also hate to be so negative or contrarian but, this is a NO spin zone and facts are its product; I can always be WRONG but … I am mostly EARLY!”

 

Opinions expressed are those of the author and are subject to change, and not intended to be a forecast of future events, a guarantee of future results, nor investment advice. Whether information or intelligence is good, bad, or somewhere in between; I put into context what is relevant and useful for investors.  All investments are subject to risks. Investors should consider investment objectives.

Henry McCusker, the editor, and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication. Regulation Analyst Certification (Reg AC): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities.

I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.