March 30, 2020 8:39am
While “development-stage companies are being hit with delayed clinical trial initiations and time lines for data disclosure. These factors will impact their cash runways, as clinical data is a common catalyst for financing pressuring companies with low cash balances.”
Pre-open indications: could this be a re-test of lows or a black swan?
News: Pluristem (PSTI) with a pre-market indication of +$0.32 or +10.63% has dosed three (3) patients in two (2) different hospitals in Israel under a compassionate use program for the treatment of COVID-19. PSTI expects to enroll additional patients in Israel in the coming days and providing updates on clinical outcomes once significant data has been gathered.
I say today what others won't, so you can do what others can't whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors
Dow future are UP +0.25% (+68 points), S&P futures are UP +0.59% (+15 points) and NASDAQ futures are UP +0.77% (+58 points)
U.S. stock futures are vacillating between positive and negative percentage (%) moves as the pandemic infection and death rates rise possibly offset by news of J&J’s coronavirus candidate to begin a vaccine clinical trial by September;
European markets dived as the pandemic remains the focus of investors and the pan-European Stoxx 600 slid -2.2% in early deals;
Asia Pacific markets were mixed as the impact of the pandemic continues to spread rapidly; yet, Australia rallied +7% while Japan’s Nikkei 225 fell -1.57% and Mainland Chinese stocks were lower - the Shanghai composite was down -0.9% and the Shenzhen composite shed 2.114% and finally, the MSCI Asia ex-Japan index was -0.3% lower.
Stock-index futures signaled a choppy start to trading this week, flipping between gains and losses; the unknowns suggest that markets will remain volatile until the infection and impact uncertainties are resolved.
Referencing the title and factoids, The Dow last week posted its biggest weekly gain since 1938, surging more than 12%. The S&P 500 rose +10.3% and Nasdaq rose +9.1% as both are coming off their best week since 2009. The S&P 500 posted daily swings of at least 2.9% in four of the five sessions. That includes a 3.4% drop on Friday for the S&P 500.
The SPDR Biotech ETF (XBI) was down (-2.90%), the iShares NASDAQ Biotechnology ETF (IBB) was down -1.95%, the NASDAQ Biotechnology NBI (-2.38%), while the Health Care Select Sector SPDR Fund XLV ( -2.14%) is down 14%, while the SPDR S&P Biotech Exchange-Traded Fund XBI (-2.90%) has dropped 17%.”
Since fundamentals don’t matter, as share pricings gets rolled, markets get mugged and depending on how long this goes on, the economy will fumble — problem, we are in for more of the same!
There are several indicators that could, would or should “light a match” to share priding …
- Lower volume to the downside (versus 3 week or 3-month averages versus hap-hazard selling as most holders of stocks to build cash positions;
- Currency markets (the U.S. dollar has lost value in recent sessions after the Fed made aggressive moves to lower the cost of borrowing dollars and increase liquidity);
- Number of stocks trading at their 52-week lows;
- Weekly decline (-0.72%) in the CBOE volatility index VIX;
- Some strengthening of global indexes, the Stoxx Europe 600 SXXP, the Nikkei NIK and commodity prices BCOM might signal the worst may be over.
As we end the quarter (Q1/2020) … there exists no idea how long this disruption or as I have stated – share pricing “violence” will last, however … the more that risk adversity rises, the more the market and sector will bounce back – the ultimate question is when?
Friday night’s title: “volatility strikes to the heart of cell/gene therapy sector and its sentiment indicator. Another wipe-out re-tests the capacity to find a near-term bottom as we are not even close to the peak of the curve”.
- the NASDAQ closed DOWN -295.16 points (-3.79%);
- the VIX was up +4.54 points or +7.44% to 65.54;
- the IBB closed -1.95% and XBI also closed down -2.90%
- the close was negative with an A/D line of 8/25, 2 flats of 35 covered;
- the 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);
- 5 out of the 8-upside had higher than the 3-month average volume;
- 4 out of the 25-downside had higher than the 3-month average volume;
- 2 flat – BCLI and RENE.L
- March registered 11 negative and 9 positive closes
- February registered 9 negative, 9 positive closes, 3 vacation days and 1 holiday.
- January registered 9 negative, 10 positive closes and 2 holidays.
- December registered 11 negative and 10 positive closes
- November registered 8 negative, 12 positive and 1 holiday closes;
- October registered 14 negative, 10 positive and 1 neutral closes;
Companies in my headlights – It’s your decision; I provide an idea and context:
Watch and wait - a roller coaster starts and ends at the same position
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.