March 27, 2020 5:44pm
Another wipe-out re-tests the capacity to find a near-term bottom as we are not even close to the peak of ‘the infection curve”
Pre-open indications: 7 HITs <ALNY (-$3.01), IONS (-$0.34), CRSP (-$2.17), RARE (-$2.14), VCEL (-$0.65) RENE.L (-$0.00)> and 2 MISS <BSTG (+$0.50), SAGE (+$0.55)>
The week in review
Market talk, ideas and opinions; volatility sketches a contradictory picture of the short-term
The Dow closed DOWN -915.39 points (-4.06%), the S&P closed DOWN -88.60 points (-3.37%) while the NASDAQ closed DOWN -295.16 points (-3.79%)
Indexes fell sharply on Friday, giving back some of the strong gains experienced in the previous three days to cap off the end of another volatile week.
Yet, the major averages posted strong gains for the week. The Dow rose 12.8% week to date, its biggest one-week gain since 1938. The S&P 500 gained 10.3% this week for its best weekly performance since March 2009. The Nasdaq also had its biggest weekly gain in 11 years, rising 9.1%. <CNBC>
Despite the market’s weekly gains, the major averages were still more than 20% below the record highs set last month.
This Friday’s morning headline warned, “I’m worried about share pricing sustainability. It’s been asked, “take the surge in equities with a grain of salt; how much real buying is behind this week moves, besides the bailout-induced short-covering”
Sentiment took a HUGE hit as uncertainty slams the U.S. with the most confirmed cases.
- Subordinate classifications of the emotions (positive, negative or neutral) include other uncertainties facing investors (the length of the economic quarantine required to contain the virus and the ultimate economic damage) remain unresolved;
- Market peaks and valleys befuddle investors amid the COVID-19 Crisis.
As good as the last three days have been for the market, the VIX was UP is elevated as the economy spools. The CBOE Volatility Index (VIX) tracked:
- Friday up +4.54 points or +7.44% to 65.54,
- Thursday’s down -2.95 or -4.61% to 61.00,
- Wednesday’s +1.65 or +2.69% at 63.33,
- Tuesday’s +0.18 or +0.32% at 61.88,
- Monday’s -4.45 points or -6.74% at 61.59,
- Last week, the VIX eclipsed its financial crisis high, closing at 82.69.
Defining pandemic disruption: The number of confirmed U.S. coronavirus cases has surged Friday to 97,028 after Thursday’s 69,000, Wednesday’s 55,568 and Tuesday’s 46,500 while Friday’s death count has broken higher at 1475, after Thursday’s 1,00, Wednesday’s 809 following Tuesday’s 590. <John Hopkins University>
As I predicted in the pre-open “Companies in my Headlights” post, “Could be a ‘whack-a-stock” sort of day by the “machines” as investors have little impact.
A little history lesson, “The 1987 crash was a similar story with the market falling around 36% from the August high to the October low before bouncing almost 20%. It then retested the low in late October before marking another rebound of around 14% that was followed by yet another retest in early December before the S&P 500 pulled away to the upside. <MarketWatch>
The sector’s Advance/Decline (A/D) line opened at 2/33, sauntered to the mid-day at 10/25 and closed negative at 8/25 and 2 flats (BCLI, RENE.L) of the 35 covered companies.
Today’s upsiders stand-out – Athersys (ATHX), Bellicum Pharmaceuticals (BLCM), Cellectis SA (CLLS). Stemline Therapeutics (STML), bluebird bio (BLUE), Biostage (BSTG), Voyager Therapeutics (VYGR) and Sage therapeutics (SAGE) … the “some” were very lucky – I’d start thinking about questioning the Transfer Agents about the volatility of a few!!
Volume was muddled as 5 out of the 8-upside had higher than the 3-month average volume with minimal take-down volume as only 4 out of the 25-downside had higher than the 3-month average volume.
The BOTTOM LINE: investors after being thoroughly decimated pulling their money for the safety of cash and also pouring $259.8 billion into money market funds, a third consecutive week of record inflows (Refinitiv Lipper). At the same time, stock-based funds saw $13.7 billion in outflows. Taxable bond funds saw $62 billion in outflows while municipal bonds lost $13.7 billion, both records for two weeks in a row.
Check out the supporting data groupings and their numbers …
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Friday, the IBB closed -1.95% and XBI also closed down -2.90%
- Thursday, the IBB closed up +4.70% and XBI also closed up +3.97%
- Wednesday, the IBB closed down -0.55% and XBI also closed up +1.55%
- Tuesday, the IBB closed up +5.25% and XBI also closed up +8.11%
- Monday, the IBB closed down -0.55% and XBI also closed down -0.80%
The advance/decline line scenario of 35 covered companies:
- Friday, the close was negative with an A/D line of 8/25, 2 flats of 35 covered;
- Thursday, the close was positive with an A/D line of 27/7, 1 flat of 35 covered;
- Wednesday, the close was positive with an A/D line of 21/12, 2 flats of 35 covered;
- Tuesday, the close was positive with an A/D line of 32/3, 0 flat of 35 covered;
- Monday, the close was negative with an A/D line of 15/20, 0 flat of 35 covered;
Friday’s (only 8) incliners:
- Regenxbio (RGNX +$1.34);
- bluebird bio (BLUE +$1.20 after Thursday’s -$0.75 after Wednesday’s -$1.50);
- Sage Therapeutics (SAGE +$0.55 after Thursday’s +$0.62, Wednesday’s +$0.97 and Tuesday’s +$3.21);
- Biostage (BSTG +$0.50 after Thursday’s -$0.80);
- Bellicum Pharmaceuticals (BLCM +$0.27 after Thursday’s -$0.05);
- Stemline Therapeutics (STML +$0.15);
- Voyager Therapeutics (VYGR +$0.11);
- Athersys (ATHX +$0.04);
Friday’s (bottom 10) decliners:
- Alnylam Pharmaceuticals (ALNY -$3.01 after Thursday’s +$8.43 and Wednesday’s -$1.16);
- Homology Medicine (FIXX -$2.98 after Thursday’s +$1.08);
- CRISPR Therapeutics (CRSP -$2.17 after Thursday’s +$2.21, Wednesday’s -$0.88, Tuesday’s +$3.21 and last Monday’s +$0.58);
- Ultragenyx (RARE -$2.14 after Thursday’s +$2.04, Wednesday’s +$0.97, Tuesday’s +$3.36 and Monday’s +$0.76,
- Intellia Therapeutics (NTLA -$1.39 after Thursday’s +$0.54);
- Fate Therapeutics (FATE -$1.13 after Thursday’s -$0.09, Wednesday’s -$0.50 and Tuesday’s +$1.62);
- Editas Medicine (EDIT -$1.04);
- Global Blood Therapeutics (GBT -$0.88);
- uniQure NV (QURE -$0.69);
- BioLife Solutions (BLFS -$0.69 after Thursday’s +$0.90);
The percentage (%) indicators:
- Friday’s range of the 8-upside was +1.23% (VYGR) to +14.29% (BSTG +$0.50) while the 25-downside ranged from -0.24% (MESO) to -17.54% (FIXX);
- Thursday’s range of the 27-upside was +0.24% (STML) to +14.22% (VCEL) while the 7-downside ranged from -0.38% (FATE) to -18.60% (BSTG -$0.80);
- Wednesday’s range of the 21-upside was +0.81% (SGMO) to +10% (RENE.L) while the 12-downside ranged from -0.33% (BLFS) to -5.04% (ADRO);
- Tuesday’s the range of the 32-upside was +0.43% (BCLI) to +32.45% (RENE.L) while the 3-downside ranged from -2.56% (ATHX) to -6.06% (MDXG);
- Monday’s the range of the 15-upside was +0.43% (BCLI) to +10.64% (FIXX) while the 20-downside ranged from -0.16% (GBT) to -22.71% (PGEN);
Upside volume stats: key numbers
- Friday: 5 out of the 8-upside had higher than the 3-month average volume;
- Thursday: 8 out of the 27-upside had higher than the 3-month average volume;
- Wednesday: 10 out of the 21-upside had higher than the 3-month average volume;
- Tuesday: 15 out of the 32-upside had higher than the 3-month average volume;
- Monday: 3 out of the 15-upside had higher than the 3-month average volume;
Downside volume stats:
- Friday: 4 out of the 25-downside had higher than the 3-month average volume;
- Thursday: 4 out of the 7-downside had higher than the 3-month average volume;
- Wednesday: 7 out of the 12-downside had higher than the 3-month average volume;
- Tuesday: 1 out of the 3-downside had higher than the 3-month average volume;
- Monday: 10 out of the 20-downside had higher than the 3-month average volume;
2 flat – BCLI and RENE.L
Friday closed negative with 25 decliners, 8 advancer and 2 flats
Thursday closed positive with 7 decliners, 27 advancer and 1 flat
Wednesday closed positive with 12 decliners, 21 advancer and 2 flats
Tuesday closed positive with 3 decliners, 32 advancer and 0 flat
Monday closed negative with 20 decliners, 15 advancer and 0 flat
Friday closed negative with 23 decliners, 11 advancer and 1 flat
Thursday closed positive with 5 decliners, 30 advancer and 0 flat
Wednesday closed negative with 25 decliners, 10 advancer and 0 flat
Tuesday closed positive with 9 decliners, 26 advancer and 0 flat
Monday closed negative with 34 decliners, 1 advancer and 0 flat
Friday closed positive with 6 decliners, 29 advancers and 0 flat
Thursday closed negative with 33 decliners, 2 advancers and 0 flat
Wednesday closed negative with 32 decliners, 2 advancers and 1 flat
Tuesday closed positive with 10 decliners, 24 advancers and 1 flat
Monday closed negative with 32 decliners, 3 advancers and 0 flats
Friday closed negative with 29 decliners, 4 advancers and 2 flats
Thursday closed negative with 24 decliners, 11 advancers and 2 flats
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.