May 4, 2018 8:36am

TGIF, although the disguise of today’s indicators (IBB, XBI, XLV and IWM) is an issue!

 

Key nonfarm-payrolls data ahead, focus on the signal not the noise

 

Pre-open indications: 4 BUYs and 4 SELL

 

The understanding of indications sheds light on share pricing!

A negative open expected

Dow futures are DOWN -0.31% (-75 points) and NASDAQ futures DOWN -40% (-27 points)

 

U.S. stock index futures fluctuated ahead of Friday's open, as investors awaited the latest U.S. nonfarm payrolls data.

European markets higher

Asia markets close subdued as investors watch US-China talks

 

Data docket: At 8:30 a.m. ET today, nonfarm payrolls data, unemployment figures and average hourly wages will be released.

 

Today’s indications:

  • The iShares Nasdaq Biotechnology (IBB) is NOT indicating in Friday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) is indicating a NEGATIVE -0.02% downside in Friday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Friday’s pre-open;
  • The iShares Russell 2000 (IWM) is NOT indicating in Friday’s pre-open

 

Henry’omics:

Today’s moves:  The moves in pre-market trade came as markets across the globe showed a mixed picture. Markets in the Asia-Pacific region closed mostly lower, while in Europe, stocks edged higher during the session.

Yesterday, sector equities closed lower on Thursday, although major indexes came off the day's lows following a breach of key support levels.

From Thursday’s night’s newsletter: Q1 results stimulate headwinds did not helping sentiment. As reporting accelerates, we haven’t seen the worst of it yet while Sage Therapeutics (SAGE) sailed upward

I also stated, “What’s missing from the sector is something to make investors jump through the usual hoops – low volume, volatility and sentiment’s depression! I also don’t see pronounced catalysts, and if weak earnings reports aren’t enough, what pushes us away from the SELL button – losses but is there a reason to push the BUY button to even consider doubling down for a … perceived upside?”

 

Review the past sessions of 45 covered companies – new batting line-up:

  • Thursday closed NEGATIVE with 29 decliners, 11 advancers and 5 flats;
  • Wednesday closed POSITIVE with 15 decliners, 22 advancers and 8 flats;
  • Tuesday closed POSITIVE with 15 decliners, 25 advancers and 5 flats;

 

A re-cap:

  • A new month to measure … in the first week’s sessions in May,  two (2) positive and one (1) negative closes;
  • In the last six (6) sessions, the iShares NASDAQ Biotechnology (IBB) was down in four (4) and up in two (2) session for an aggregate of negative -3.86% after Thursday’s -1.36%, Wednesday’s -1.32, Tuesday’s +0.39%, Monday’s -1.86% and last Friday’s +0.29%,
  • Thursday’s decliners ranged from -0.08% <BMRN -$0.07> to -4.97% <SGMO -$0.85 > in 29 equities;
  • Thursday’s gainers ranged from +0.45% <BTX +$0.01 > to +8% <AST +$0.10 > in 11 equities;

 

My daily evaluation: Economic data will drive action on Friday, with key nonfarm-payrolls data ahead - it's all about signals, not the noise! . Also, the Fed meeting left investors uncertain over the central bank’s policy plan. Jobs data are among the figures the central bank uses in determining monetary policy, so a surprisingly good or bad number could strengthen or weaken the case for a rate rise. I am also worried about trade hostilities between the U.S. and China disrupting financial markets but, it is NOT a - today - issue. The masking of today’s indicators is an issue!

 

Company in my headlights:

Editas Medicine (EDIT) closed +$1.08 to $31.60 with 865 K shares traded <3 month average = 1.346 M shares> after reporting a loss of $30.9 million or -$0.67 in  Q1/18 as compared to $31.1 million, or $0.85 per share, for the same period in 2017. EDIT also has $359 M in cash on hand. Collaboration and other R&D revenues were $3.9 million compared to $700 K forQ1/17. The $3.2 million increase was attributable to a $2.9 million increase in revenue recognized pursuant to its strategic alliance with Allergan Pharmaceuticals International Limited and a $300 K increase in reimbursable R&D expenses. The results exceeded “street” expectations and reporting revenue of $3.9 million in Q1. EDIT shares have climbed 3% since 1/2/18 with shares climbing 61%in the last 12 months. The aftermarket indication is an upside of +$0.80 or +2.53% - SELL to BUY;

Aduro Biotech (ADRO) closed up +$0.30 to $7.55 with 1 M shares traded <3 month average = 578 K shares> after Wednesday’s +$0.25 to $7.25 having announced a net loss of $21.5 M or -$0.28 per share; which exceeded “street” expectations posting revenue of $6.6 million, also exceeding forecast. Aduro’s shares have declined slightly more than 3% since 1/2/18 and in the final minutes of trading on Wednesday, shares hit $7.25, a decrease of 25% in the last 12 months. With a premium in four sessions of $0.65 or +8.6% I’d pare the holding – Maintaining SELL;

Alnylam Pharmaceuticals (ALNY) closed down -$1.71 to $88.31 with 854.5 K shares traded <3 month average = 1 M shares> after Wednesday’s -$2.16 to $90.02 with 1.197 M shares traded.  ALNY has reached alignment with the U.S. FDA on a pivotal study design for lumasiran, an investigational RNAi therapeutic for the treatment of primary hyperoxaluria type 1 (PH1).  ALNY reported a loss of $141.2 million or $1.41 per share in Q1/18. The results did not meet “street” expectations for a loss of $1.18 per share while posting revenue of $21.9 million which also missing forecasts of an expectation of $36 million. Alnylam shares have fallen 30% since 1/2/18, at the close of trading ALNY had risen 61% in the last 12 months. The aftermarket indication is an upside of +$1.19 or +1.35% – Maintaining BUY;

CRISPR Therapeutics (CRSP) closed down -$0.04 to 421.26 with 733.6 K shares traded <3 month average = 1.14 M shares> after Wednesday’s +$1.11 to $48.53 with 955.4 K shares traded. Up, down- is also an exercise – it got “old” when I was young. April started at $43.27, March at $46.54, February at $38.48 and January ’18 at $23.52 – having “loved” the news surrounding the technology but, I say lighten the load and sell to comeback post Q1 result’s announcement. The aftermarket indicates a downside of -$0.05 or -0.24% – Maintaining SELL;

Ions Pharma (IONS) closed down -$1.47 to $41.27 with 1.61 K shares traded <3 month average = 1.21 M shares>. IONS shares rose 3.9% in premarket trading after reporting Q1/18 profit and revenue beat expectation. IONS said it and Biogen (BIIB) expect their recent deal to close in Q2/18. IONS reported a loss of $1.42 million, or a loss of $0.01 per share, after earnings of $8.96 million, or $0.07 cents per share, in the year-earlier period. Revenue rose to $144.42 million from $115.8 million, above “street” consensus of $144 million. IONS is projecting an upside of +$1.37 or +3.32% - BUY;

Sage Therapeutics (SAGE) closed up +$1.53 to $148.13 with 316.3 k shares traded <3 month average = 1.14 M shares> after Wednesday’s -$1.13 to $146.60 after Tuesday’s +$3.81 to $147.73 with 268 K shares traded <3 month average = 670.7 K shares>. After a high 4/13 of $170.58 following 3/15’s $174.05, 2/1’s $192.33 having started 2018 at $166.66 – Maintaining SELL;

uniQure (QURE) closed down -$1.28 to $29.14 with 2.3 M shares traded <3 month average = 362.1 K shares> after Wednesday’s +$0.57 to $30.42 with 690.2 K shares traded and Tuesday’s +$0.65 to $29.85 with an aftermarket indication of a downside -$0.182 or -2.82% so far due to a proposed 4.5 million (increased 500 K shares> offering and an increased 675 K overallotment priced at $28.50 -Maintaining SELL;

Verastem Oncology (VSTM) closed down -$0.05 to $4.34 with 680.3 K shares traded <3 month average = 823.6 K shares>after Wednesday’s +$0.20 to $4.39 with 1.8 M shares trading.  VSTM reported a loss of $21.1 million or -$0.41 per share meeting “street” expectations (-$0.41 per share). A year ago, VSTM was trading at $2.13. The aftermarket indication has an upside of +$0.15 or +3.46% - Maintaining BUY

 

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.