August 2, 2019 7:33pm

The in-line July jobs report didn’t change the macro outlook but, equities have other problems – Q2 reporting season

Today was not the day to catch a falling knife or a wall of equity paper from any height

Pre-open indications: 1 HIT and 0 MISS

Are the estimates so hard to fathom in “our” universe’s journey through the Q2/19’s reporting cycle!

 

During “earning’s” season, traders vote by buying and selling shares, and in the short run, the trades happen at the levels dictated by whether the buyers or sellers are motivated by meeting “street” expectation  versus LPS (loss-per-share) as compared to net income.

 

Markets and indexes:

  • The Dow closed down -98.41  points or -0.37% to 26.485.01;
  • The S&P closed down -21.51 points or -0.71% at 2,932.05;
  • The NASDAQ was down -107.05 or -1.32% to 8,004.07;

 

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

  • Friday the IBB closed down -1.2% while the XBI closed down -2.20%
  • Thursday the IBB closed up +0.68% while the XBI closed up +0.27%
  • Wednesday the IBB closed down -0.66% while the XBI closed down -1.23%
  • Tuesday the IBB closed up +0.90% while the XBI closed up +1.51%
  • Monday the IBB closed up +0.09% while the XBI closed down -0.22%

 

Henry’omics:

Friday (8/2), the sell-off renewed trade fears, capping a week where the benchmark S&P 500 index and the NASDAQ saw their worst weekly percentage plunges since December, when investors were spooked by the prospect of a looming recession.

Sector equities and broader market stocks also fell as President Trump stoked U.S.-China trade fears with the announcement of more tariffs while investors digested U.S. employment data.

The S&P 500 dropped -3.1% and NASDAQ plunged - 3.9% this week while the Dow declined -1.6%.

The U.S. economy added 164,000 jobs in July, just below an estimate of 165,000. The job gains pushed the size of the U.S. labor force to a record high. Wages topped analyst expectations. They rose 3.2% on a year-over-year basis. The strong wage number could be seen by traders as a sign of rising inflation, which could keep the Fed from cutting rates multiple times later this year.

 

Pre-open post, “an ugly Friday, the sun is shining? As earnings, jobs report and China tariff issues overwhelm share pricing. Beware Q2 earnings’ “LPS” <loss-per-share> perp walk.”

Friday’s advance/decline line scenario of 45 covered companies:  

  • The close was negative with an A/D Line of 8/34 and 1 flat and 2 acquired;

 

Pre-open indications: 1 HIT and 0 MISS

  • ReNeuron (RENE.L ) closed down -$5.00 – hit;

 

Decliners:

  • bluebird bio (BLUE -$7.87 after Thursday’s -$3.08 after Wednesday’s -$1.81,  Tuesday’s -$3.78 and Monday’s -$2.92;
  • ReNeuron (RENE.L +$5.00);
  • Ultragenyx Pharmaceuticals (RARE -$4.77);
  • BioMarin Pharmaceuticals (BMRN -$3.16 after Thursday’s +$1.68 after Wednesday’s -$1.68 and Tuesday’s +$1.18);
  • CRISPER Therapeutics (CRSP -$2.67 after Thursday’s +$1.87);

Incliners:

  • Stemline Therapeutics (STML +$1.83)
  • Solid Biosciences (SLDB +$0.51);
  • Pluristem (PSTI +$0.37);
  • Histogenics (HSGX +$0.0114);
  • Applied Genetic Technologies (AGTC +$0.10;

 

The percentage (%) indicators: 

  • Friday’s range of the 8 upside was +0.57% (MDXG) to +14.04% (STML) while the 34 downside ranged from -0.95% (BTX) to -12.61% (ADVM);
  • Thursday’s range of the 22 upside was +0.% () to +% () while the 19 downside ranged from -0.06% (NTLA) to -9.53% (PSTI);
  • Wednesday’s range of the 6 upside was +0.21% (RENE.L) to +4.90% (VSTM) while the 37 downside ranged from -0.06% (CRSP) to -7.56% (BTX);
  • Tuesday’s range of the 26 upside was +0.57% (ONCE) to +8.99% (SLDB) while the 18 downside ranged from -0.07% (ONVO) to -6% (ATHX);
  • Monday’s range of the 11 upside was +0.34% (EDIT) to +7.11% (PSTI) while the 31 downside ranged from -0.26% (CLLS) to -7.95% (CUR -$0.19);

 

Upside volume stats:  to compare

  • Friday: 3 out of the 8 upside had higher than the 3 month average volume;
  • Thursday: 4 out of the 22 upside had higher than the 3 month average volume;
  • Wednesday: 1 out of the 6 upside had higher than the 3 month average volume;
  • Tuesday: 4 out of the 26 upside had higher than the 3 month average volume;
  • Monday: 2 out of the 11 upside had higher than the 3 month average volume;

Downside volume stats: NOTICE

  • Friday: 9 out of the 34 downside had higher than the 3 month average volume;
  • Thursday: 8 out of the 19 downside had higher than the 3 month average volume;
  • Wednesday: 8 out of the 37 downside had higher than the 3 month average volume;
  • Tuesday: 4 out of the 18 downside had higher than the 3 month average volume;
  • Monday: 6 out of the 31 downside had higher than the 3 month average volume;

 

1 flat – BSTG with 2 acquired (AST & OSIR) and the Spark Therapeutics’ (ONCE) acquisition by Roche still being delayed

 

August’s sessions:

Friday closed NEGATIVE with 34 decliners, 8 advancers, 1 flat and 2 acquired (AST & OSIR);

Thursday closed POSITIVE with 19 decliners, 22 advancers, 2 flat and 2 acquired (AST & OSIR);

 

 

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.