April 4, 2018 7:55am

The moves in pre-market trade come as China announced brand-new tariffs on 106 U.S. products,

… As the IBB (-1.64%), XBI (-1.65%), XLV (-0.66%) and the IWM (-0.67%) declines indicating continued   anxiety in the stem, cell gene and regenerative therapy sector after yesterday’s neutral and Monday’s negative closes keeping shareholder value under a cloud

 

Best idea, pre-open indication: 1 SELL

 

Lower open expected

 

Where the translation of truths shed light on share pricing!

 

Dow futures are DOWN -1.95% (-468 points) and NASDAQ futures are DOWN -1.89 % (-123 points)

 

U.S. stock index futures tumbled ahead of Wednesday's open, as concerns over a potential trade war between the U.S. and China intensified.

European markets were lower, as elevated concerns of a tit-for-tat trade war between the world's biggest economies.

Asian markets closed mixed qmid trade concerns

 

Today’s concern: concerns of further depreciation in “our” universe, the question of how deep?

Data docket:  the ADP National Employment Report at 8:15 a.m. ET and services purchasing managers' index (PMI) at 9:45 a.m. ET. At 10 a.m. ET, non-manufacturing ISM report on business is due as well as factory orders. Mortgage applications will be released at 7 a.m. ET as usual.

 

Today’s indications:

  • The iShares Nasdaq Biotechnology (IBB) is indicating a NEGATIVE -1.64% downside in Wednesday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) is indicating a NEGATIVE -1.65% downside in Wednesday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) is indicating a NEGATIVE -0.67% downside in Wednesday’s pre-open;
  • The iShares Russell 2000 (IWM) is indicating a NEGATIVE -1.6% downside in Wednesday’s pre-open

 

Henry’omics:

From Tuesday night’s newsletter: “sector flip-flops through-out the session. The sector’s move was a reaction to Monday’s selloff (31 of 40 covered); both the S&P and the NASDAQ fell into negative territory multiple times throughout the session.”

I also stated, “This is still a sector trading on fear instead of fundamentals and technicals, which has made it frustratingly difficult to figure out where we’re headed in the near term.”

 

What to be on the look-out for:

  • Volume is STILL low and volatility is expected to remain elevated … with one answer - the degree of depreciation in the oversold and any upside to the currently oversold ...

 

Review the last 7 session’s close (of 40 covered companies):

  • Tuesday closed NEUTRAL with 19 decliners, 19 advancers and 2 flats;
  • Monday closed NEGATIVE with 31 decliners, 9 advancers and 0 flats;
  • Friday was a market holiday;
  • Thursday closed POSITIVE with 16 decliners, 22 advancers and 2 flats;
  • Last Wednesday closed NEGATIVE with 26 decliners, 13 advancers and 1 flat;
  • Last Tuesday closed NEGATIVE with 35 decliners, 2 advancers and 3 flat;

 

Volatility (the VIX) is still a big driver which was down -10.67% after Monday’s up +18.28% after Thursday’s -12.68% and last Wednesday’s +0.76%.

 

What I am “feeling” and seeing this a.m.:  there is no way to know if sector equities are “cheap” or “expensive,” and the roller-coaster market is proof.

 

A re-cap: “Investors are still facing hefty losses as April begins having weathered the month of March!

  • Tuesday’s decliners ranged from -0.11% < OSIR -0.01> to -7.28% <BSTG -$0.22 > in 19 equities;
  • Tuesday’s gainers ranged from +0.34% <STML +0.05 > to +25.38% < CLLS +$7.80> in 18 equities;

 

Consider the iShares NASDAQ Biotechnology (IBB) over the last eleven (11) sessions it’s down -8.12%:

  • Tuesday was up +0.37%
  • Monday was down -3.95%
  • Friday was a market holiday
  • Thursday +0.72%
  • Wednesday +0.82%
  • Last Tuesday -2.77%
  • The previous Monday +2.68%...
  • Friday -2.63%
  • Thursday -2.30%
  • Wednesday -0.98%
  • The previous Tuesday +0.02%

 

My evaluation:  investors are better sitting on-the-sidelines and watching the first few hours of the session as over-optimism of a bounce back are looking minimal

 

Company in my headlights:

Cellectis (CLLS) closed up +$7.80 or 25.38% to $38.53 after news of a $175 M ADS (American depositary shares) offering post the “deal” with Allogene Therapeutics, Inc. (Allogene), a biotechnology company focused on the rapid advancement of allogeneic CAR T therapies targeting blood cancers and solid tumors, announced today that Allogene intends to assume from Pfizer (PFE) the global strategic collaboration to develop “off-the-shelf” CAR T immunotherapies for oncology. This agreement was initially formed with Cellectis in June 2014. Allogene and Pfizer (PFE) entered into an asset contribution agreement for PFE’s allogeneic CAR T-cell therapy portfolio, which includes 16 preclinical assets and UCART19. Subject to certain closing conditions, Allogene will assume the strategic collaboration and license agreement with CLLS, with exclusive rights to develop and commercialize previously defined allogeneic UCART programs directed at select targets. Cellectis will remain eligible to receive clinical and commercial milestone payments of up to $2.8 billion, or $185 million per target for 15 targets and tiered royalties in the high single digits on net sales of any products that are commercialized by Allogene under the agreement. This new alliance, with Allogene’s dedicated team, is expected to lead to a strong acceleration of CAR T therapies. The aftermarket indication is a NEGATIVE -$3.77 or -9.78% after announcing an ADS offering of $175 M - SELL

 

 

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.