June 2, 2020 8:28am

Yesterday’s market seems to have ignored the domestic unrest as protests continue; today it’s all about reopen business with a little of global purchase power thrown in

Pre-open indications: 2 BUY and 7 SELLs 

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Dow future are UP +0.50% (+127 points), S&P futures are UP +0.42% (+13 points) and NASDAQ futures are UP +0.35% (+33 points)

 

U.S. stock futures were higher in early trading on Tuesday as investors looked past civil unrest around the country and focused on the reopening of the economy from the coronavirus pandemic;

European markets gain on reopening and recovery hopes, despite backdrop of U.S. unrest as the pan-European Stoxx 600 climbed 1.65% by late morning;

Asia Pacific were higher with investors continuing to watch for the reopening of economies as coronavirus containment measures are eased.

 

Henry’omics:

In a last-minute address from the White House Monday evening, President Donald Trump said he will deploy the military if states and cities failed to quell the demonstrations. Futures fell as Trump spoke.

The disconnect between stocks and the economy generated widespread concern among some investors

The coronavirus crisis is likely to reduce U.S. economic growth by $7.9 trillion, or 3%, through fiscal 2030, according to the Congressional Budget Office.

 

Monday post’s title: “rowdy times starts a new month. Equity markets displayed resilience as to the troubling internal U.S. rioting events, China tensions as many are trying to forget, the pandemic.”

  • The NASDAQ closed UP +62.18 points (+0.66%);
  • Monday closed positive at 23/10 and 2 flats after Friday’s positive close at 19/15 and 1 flat;
  • the IBB closed down -0.47% and XBI also closed up +0.53%;
  • Volume was WEAK with 5 out of the 23-upside having higher than the 3-month average volume and 2 out of the 10-downside having higher than the 3-month average volume;
  • Monday’s percentage (%) of the 23-upside were +0.28% (MDXG) to +19.47% (NTLA) while the 10-downside ranged from -0.42% (AGTC) to -2.31% (FATE)

Q2:

  • June registered 1 positive close
  • May registered 9 negative, 11 positive closes and 1 holiday
  • April registered 10 negative, 11 positive closes and 1 holiday.

Q1:

  • March registered 11 negative, 10 positive closes and 1 neutral close.
  • February registered 9 negative, 9 positive closes, 3 vacation days and 1 holiday.
  • January registered 9 negative, 10 positive closes and 2 holidays.

 

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

Sell into strength:

  • Athersys (ATHX) closed up +$0.10 after Friday’s +$0.13, now it files for a whopping $35 million “shelf” and has a negative -$0.02 or -0.66% aftermarket indication;
  • bluebird bio (BLUE) closed up +$0.75 but has a negative -$0.18 or -0.28% aftermarket indication;

Maintaining BUY:

  • Sage Therapeutics (SGMO) closed down -$0.49 after Friday’s +$1.66 after Thursday’s -$0.29 to $37.38 and has a positive +$0.07 or +0.20% aftermarket indication. SAGE CUT the financial “tires” that allowed them down, it’s sleeker and able to respond quicker that others as the future becomes clear. NO aftermarket indication;
  • CRISPR Therapeutics (CRSP) closed up +$2.01 after Friday’s +$2.27 to $64.59 and has a positive +$1.07 or -1.61% aftermarket indication and a 52-week change of +79.55 and started May 1st at $48.46 and April 1st at $38.50;

Maintaining SELL:

  • Adverum Biotechnologies (ADVM) closed up again +$0.64 after Friday’s +$0.31, Thursday’s -$0.70 and Wednesday’s +$0.58 to $21.02 and reported Q1 miss of expectation and forecasts and has NO aftermarket indication. Let’s not get ahead of ourselves, a 52-week change of +98.37%, a chart that seems “peaky”, and finally a share price that opened may 1st at $12.00 – there’s a squeeze on the way;
  • Mesoblast (MESO) closed up +$0.56 after Friday’s +$0.18 and Thursday’s -$0.55 after reporting Q3 and nine (9) +month results and has a negative -$0.04 or -0.30% aftermarket indication. Q3 and 9-month results were capped by a “raise” and filing of a BLA in the US however, their borrowing costs were elevated by +$1.9 million;
  • Regenxbio (RGNX) closed down -$0.83 or -2.20% to $36.83 and has a negative -$0.70 or -1,90% aftermarket indication;
  • Ultragenyx Pharmaceuticals (RARE) closed up +$1.14 or +1.67% to $69.60 and has a negative -$0.08 or -0.11% aftermarket indication.
  •  

SELL on news of an offering:

  • Intellia therapeutics (NTLA) closed up +$3.41 or +19.47% to $20.92 on news after Friday’s +$2.27 to $64.59 and has a negative -$0.33 or -1.58% aftermarket indication on news of a $75 million offering and a 155 “green shoe’ with a 52-week change of +22.88% and started May 1st at $12.62 and April 1st at $11.12;

 

The BOTTOM LINE: As to the title, “Markets have misinformation and are effected by human behavior and error. Under this hypothesis it is believed NOT all the information is available to the investors and people's emotions (SENTIMENT) effect the price of the assets in the market.”

Reiterating, “I’m not worried about June – it will fizzle out, hiss, pop and run similar to the past month’s gamut however as the quarter ends – I will be extremely worried re Q2/2020 earnings.  

 

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.