March 4, 2020 5:38pm
As I stated this a.m., “We invest to achieve a sustainable return!” The problem the sector is what it is until it isn’t!
Pre-open indications: 9 HITs <RENE.L ($0.00), RGNX (+$2.39), BLUE (+$1.79), ALNY (+$5.82), VSTM (+$0.04), GBT (+$6.04), EDIT (+$1.05), CRSP (+$2.11) and NTLA (+$1.36) and 1 MISS <VYGR (+$0.50)>
Insight is about understanding perception and is putting into context what is relevant to expectation fulfillment
The Dow closed UP +1173.35 points (+4.53%), the S&P closed UP +126.73 points (+4.22%) while the NASDAQ closed UP +334 points (+3.85%)
Indexes surged +4% (in three sessions) on Wednesday as the oversold equities were recognized after their plunge and victories in state” primaries” for former VP Joe Biden on Super Tuesday sparked a market rally.
The result of yesterday’s FED ’s move, equities opened higher on speculation other central banks and governments would provide stimulus as the outbreak claimed more lives and new cases piled up.
The S&P 500 surged into the close, nearly matching Monday’s rally that was the best in 14 months.
RegMed – cell and gene therapy alongside other health-care/biotech firms led the spike, rising the most since November 2008.
With Wednesday’s rally, all three major averages are on pace to move out of correction territory, or less than 10% down from their 52-week highs. <CNBC>
The XLV, XBI, NBI, IWM and IBB ETFs soared while the VIX declined -13.12%.
From my Data Docket, the U.S. services sector expanded at a faster-than-expected pace in February, data from the Institute for Supply Management showed. ADP and Moody’s Analytics said private payrolls jumped by 183,000 last month, topping expectations.
Lawmakers also struck a deal on more than $8 B in emergency coronavirus funding.
Framing the main takeaway … pricing, volume and machine trading created volatility and liquidity!
The oversold and momentum moving market took the sector along for the ride!
What’s happening, in my estimation is that the constancy of volatility is menacing, something that has not been experienced in years of this market which I also see as a potentially mortal threat to share pricing.
The real question is what “promises” will be fulfilled when companies nursed back to share pricing health post depreciation?
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Wednesday, the IBB closed up +4.69% and XBI closed up +4.70%
- Tuesday, the IBB closed down -2.67% and XBI closed down -2.84%
- Monday, the IBB closed up +5.54% and XBI closed up +3.54%
The advance/decline line scenario of 35 covered companies:
- Wednesday, the close was positive with an A/D line of 30/3, 2 flats of 35 covered;
- Tuesday, the close was negative with an A/D line of 7/26, 2 flats of 35 covered;
- Monday, the close was positive with an A/D line of 24/11, 0 flat of 35 covered;
Wednesday’s (only 3) Decliners:
- Biostage (BSTG -$0.85);
- Sangamo (SGMO -$0.12);
- Caladrius Biosciences (CLBS -$0.01) reports earnings on Thursday;
Wednesday’s (high 5 of 30) Incliners:
- Global Blood Therapeutics (GBT +$6.04 after Tuesday’s -$4.92);
- Alnylam Pharmaceuticals (ALNY +$5.82 after Tuesday’s -$3.36 and Monday’s -$2.88);
- Ionis Pharmaceuticals (IONS +$3.87);
- Fate Therapeutics (FATE +$2.50 after Tuesday’s -$2.76 and Monday’s +$1.81) after earnings;
- Regenxbio (RGNX +$2.390;
The percentage (%) indicators:
- Wednesday’s the range of the 30-upside was +0.31% (SLDB) to +9.85% (GBT) while the 3-downside ranged from -0.42% (CLBS) to -17.7% (BSTG);
- Tuesday’s the range of the 7-upside was +0.60% (NTLA) to +18.52% (BSTG) while the 26-downside ranged from -0.04% (MESO) to -17.14% (PGEN);
- Monday’s the range of the 24-upside was +1.6% (ATHX) to +13.53% (SAGE) while the 11-downside ranged from -0.327% (ADRO) to -8.30% (RENE.L);
Upside volume stats: to compare
- Wednesday: 5 out of the 30-upside had higher than the 3-month average volume;
- Tuesday: 4 out of the 7-upside had higher than the 3-month average volume;
- Monday: 12 out of the 24-upside had higher than the 3-month average volume;
Downside volume stats:
- Wednesday: 2 out of the 3-downside had higher than the 3-month average volume;
- Tuesday: 10 out of the 26-downside had higher than the 3-month average volume;
- Monday: 6 out of the 11-downside had higher than the 3-month average volume;
- Sangamo Therapeutics (SGMO -$0.12 with 3.615 M shares traded (3-month average = 2.528 M shares);
- Verastem Oncology (VSTM +$0.04 with 2.408 m shares traded (3-month average = 2.52 m shares);
- Biostage (BSTG -$0.85 to $3.95 with 16,380 shares traded after Tuesday’s +$0.75 to $4.80 with 11,680 shares traded (3-month average =3,006 shares);
- Sangamo Therapeutics (SGMO -$0.12 with 3.615 M shares traded after Tuesday’s -0.25) with 3.82 m shares traded (3-month average =1.957 M shares);
2 flat –MDXG and RENE.L
Wednesday closed positive with 3 decliners, 30 advancers and 2 flats
Tuesday closed negative with 26 decliners, 7 advancers and 2 flats
Monday closed positive with 11 decliners, 24 advancers and 0 flats
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.