March 6, 2020 8:39am

The trajectory of coronavirus fears, markets and sector share pricing reflect a petri dish of risk

Pre-open indication: 1 BUY and 5 SELLs plus the usual pricing evaporation in a wild market

March is a rollercoaster month – My version of the morning’s numbers is written to be informative not just about changes to indications; it’s about what happened or will beyond the headline in today’s session

Dow future are DOWN -2.99% (-778 points), S&P futures are DOWN -3.14% (-95 points) and NASDAQ futures are DOWN -3.46% (-300 points)

 

Futures pointed to further declines as the week ends after a volatile trading week;

European stocks fell sharply as the coronavirus outbreak keeps impacting businesses worldwide as the pan-European Stoxx 600 tumbled -3.6% by late morning;

Asia Pacific markets dived as volatility continued to grip the markets amid investor concerns over the global coronavirus outbreak with Japanese stocks were among the biggest losers regionally as the Nikkei 225 dropped 2.72% and the MSCI Asia ex-Japan index tumbled 2.13%.

 

Data Docket: a key jobs (number) report – Nonfarm payrolls grew far more than expected in February as companies continued to hire amid a growing coronavirus scare; US added 273,000 jobs in February, vs 175,000 expected

 

Henry’omics:

Optimism about any control of effective treatments now or on the horizon for the coronavirus is evaporating as infection and deaths rise worldwide.

… As coronavirus cases near 100,000 and deaths increase!

Risk assets have whipsawed this week, with traders on edge amid a rise in virus cases, governments extending quarantines and travel restrictions, and a slew of company warnings on the impact to earnings. Global equities have recovered some of the recent losses but remain about 10% below the all-time high reached last month. <Bloomberg>

 

My lingering question or a statement of impact, “we are far from at a “tradeable bottom (?); it depends on whether electronic machine-oriented trading “rules” will resist further selling”

 

Thursday night’s title: “The sector and market have bounced to an extreme again to yet another oversold condition in terms of the relative strength index (RSI), which measures momentum”

  • the NASDAQ closed DOWN -279.49 points (-3.10%)
  • the IBB closed down -2.12% and XBI closed down -1.59%
  • the close was negative with an A/D line of 11/24, 0 flats of 35 covered;
  • the range of the 11-upside was +0.25% (BSTG) to +9.48% (BCLI) while the 24-downside ranged from -0.11% (BLCM) to -9.09% (RENE.L); 
  • 4 out of the 11-upside had higher than the 3-month average volume;
  • 5 out of the 24-downside had higher than the 3-month average volume;

 

Q1:

March registered 2 positive and 2 negative closes

February registered 9 negative, 9 positive closes, 3 vacation days and 1 holiday.

January registered 9 negative, 10 positive closes and 2 holidays.

 

Q4:

  • December register 11 negative and 10 positive closes
  • November registered 1 holiday, 12 positive and 8 negative close;
  • October registered 10 positive, 1 neutral and 14 negative closes;

 

Companies in my headlights – It’s your decision; I provide an idea and context:

Pre-open indications:

BUY: EDIT (+$0.40 or +1.59% aftermarket indication)

SELL into strength; (BCLI with a +$0.07 or +0.92% aftermarket indication as close was up +$0.66 or +9.48% to $7.62), NTLA (closed up +$0.43 or +3.10% to $15.30), RENE.L (pre-U.S. market indication is -$2.08 in its common swing from its low).

SELL: GBT (a -$0.13 aftermarket indication after closing down -$0.58), CLBS (closed down -$0.02 based on earnings call, larger than expected losses and a shortened runway Q2/2021 with only $25.2 M in cash to $66.75)

 

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.