August 13, 2019 9:11pm

We could be stuck in a risk-off phase where performance is iffy and mixed

Pre-open indications: as I had sated, “Hope is NOT measureable, yet I see a few of the oversold being … recognized; while many will remain stuck in the mud of under-appreciated; notice I didn’t say undervalued.”

How many times can I be right … there are opportunities here?

 

The remainder of the month’s trading sessions will be critical for the RegMed sector which will establish August and quarter’s (Q2) reporting initiating tumultuous devaluation.

 

Markets and indexes:

  • The Dow closed up +372.54 points or +1.44% to 26,279.91;
  • The S&P closed up +42.57 points or +1.48% at 2,882.70;
  • The NASDAQ was up +152.95 or +1.95% to 8,016.36;

 

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

  • Tuesday the IBB closed up +1.22% while the XBI closed up +1.38%
  • Monday the IBB closed down -1.25 % while the XBI closed down -1.88%
  • Friday the IBB closed down -0.38% while the XBI closed down -0.91%

 

Henry’omics:

Sector equities were up with an advance/decline line of 22/20 – at least it was up after sessions of fallen equities.

Stocks were lower before the USTR announcement as the bond market raised red flags, fueling concerns the global economic slowdown could tip us into a recession. The widely watched 2-year to 10-year yield spread is now just 2 basis points, according to FactSet. A yield-curve inversion has been a reliable recession indicator watched by the Federal Reserve as well as many market experts <CNBC>.

On the data front, the Labor Department’s consumer price index report showed inflation came in as expected last month. The yield curve continued to narrow after the report.

Up, down, round and round … be careful; the overbought are ready to be profit targets in some cases and the oversold could be ready to flame up … for a while!

 

Pre-open post, “another session of geo-politics; futures are fluctuating while pointing to a sell-off although devaluation won’t be so deep – hopefully! Sector sentiment is fragile yet, I feel a trading response is in order after two (2) deep down sessions. Remember, the “dog days” of August make investors sweat.”

 

The advance/decline line scenario of 45 covered companies:  

  • Tuesday the close was positive with an A/D Line of 22/20 and 1 flat and 2 acquired;
  • Monday the close was negative with an A/D Line of 13/29 and 1 flat and 2 acquired;
  • Friday the close was negative with an A/D Line of 11/30 and 2 flats and 2 acquired;

 

Earnings:

Give credit where it is due …

Biostage (BSTG) announced its Q2 “numbers” quietly (and effectively) from my viewpoint (formerly jaundiced) and is trading above many others at $2.31 and again with NO debt overhangs.

The loss from Q2/19 (-$0.37) as compared to Q1/19 (-$0.32) far less than Q2/18 (-$0.55).

In Q1, BSTG recognized grant income for qualified expenditures from a Fast-Track Small Business Innovation Research (SBIR) grant of $114 K (3/31/19) versus $59 K (3/31/18). In Q2, BSTG recognized grant income for qualified expenditures from that Fast-Track Small Business Innovation Research (SBIR) grant of $223 K for Q2 compared to $76 K in Q2/18.

The $300 K year-over-year increase in net loss was due primarily to a $400 K increase in R&D costs, a $200 K increase in S,G&A, offset in part by a $100 K decrease in non-cash expense from change in the fair value of warrants.

For the 1st half BSTG reported a net loss of $4.4 M, or a net loss per share of $0.69, compared to a net loss of $3.6 M, or a net loss per share of $1.11 for 1st half ’18.. The $800 K year-over-year increase in net loss was due primarily to an $800 K increase in R&D costs and a $300 K increase in G&A expenses, offset in part by a $200 K net decrease in expense from change in the fair value of warrants. In addition, BSTG recognized grant income for qualified expenditures from the SBIR grant of $337 K for 1st half compared to $135 K for 1st half in 2108.

I always like it, when I detect “forward motion” than the rah/rah/rah of many conference calls!

 

Decliners:

  • ReNeuron RENE.L -$9.00 after Monday’s +$11.00);
  • CRISPER Therapeutics (CRSP -$1.67);
  • Ionis Pharmaceuticals (-$1.01);
  • Solid Biosciences (SLDB -$0.64);
  • Global Blood Therapeutics (GBT -$0.45);

Incliners:

  • uniQure (QURE +$3.23);
  • Spark Therapeutics (ONCE +$1.67 after Monday’s -$3.58);
  • Alnylam Pharmaceuticals (ALNY +$1.12 after Monday’s -$1.90, Friday’s -$2.10 and Thursday’s +$2.47);
  • BioLife Solutions (BLFS +$1.01 after Monday’s +$0.31 and Friday’s -$1.55);
  • AxoGen (AXGN +$o.67 after Monday’s +$1.23 and Friday’s +$0.26);

 

The percentage (%) indicators: 

  • Tuesday’s range of the 22 upside was +0.14% (BLUE) to +8.70% (KOOL +$0.24) while the 20 downside ranged from -0.08% (CLLS) to -11.02% (SLDB);
  • Monday’s range of the 13 upside was +0.12% (GBT) to +19.19% (AXGN) while the 29 downside ranged from -0.56% (IONS) to -8.82% (PSTI);
  • Friday’s range of the 11 upside was +0.06% (FIXX) to +3.93% (ONVO) while the 11 downside ranged from -0.17% (NTLA) to -1`0.15% (BCLI);

 

Upside volume stats:  to compare

  • Tuesday: 5 out of the 22 upside had higher than the 3 month average volume;
  • Monday: 7 out of the 13 upside had higher than the 3 month average volume;
  • Friday: 3 out of the 11 upside had higher than the 3 month average volume;

Downside volume stats: NOTICE

  • Tuesday: 3 out of the 20 downside had higher than the 3 month average volume;
  • Monday: 7 out of the 29 downside had higher than the 3 month average volume;
  • Friday: 11 out of the 30 downside had higher than the 3 month average volume;

 

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

 

August’s sessions:

Tuesday closed POSITIVE with 20 decliners, 22 advancers, 1 flat and 2 acquired (AST & OSIR);

Monday closed NEGATIVE with 29 decliners, 13 advancers, 1 flat and 2 acquired (AST & OSIR);

Friday closed NEGATIVE with 30 decliners, 11 advancers, 2 flats and 2 acquired (AST & OSIR);

Thursday closed POSITIVE with 11 decliners, 28 advancers, 2 flats and 2 acquired (AST & OSIR);

Wednesday closed NEGATIVE with 21 decliners, 19 advancers, 3 flats and 2 acquired (AST & OSIR);

Tuesday closed POSITIVE with 10 decliners, 32 advancers, 1 flat and 2 acquired (AST & OSIR);

Monday closed NEGATIVE with 41 decliners, 2 advancers, 0 flat and 2 acquired (AST & OSIR);

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.