June 5, 2020 7:58pm

A stunning blowout and reversal in non-farm payroll numbers – they decreased however; sector under-performance continues with sentiment spoilage

Pre-open indications follow-up results: 4 HITs and 1 MISS <who>

Week in review …

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The Dow closed UP +829.16 points (+3.15%), the S&P closed UP +81.58 points (+2.62%) while the NASDAQ closed UP +198.27 points (+2.06%)

 

Pre-open indications follow-up results: 4 HITs < bluebird bio (BLUE +$4.08), Sage Therapeutics (SAGE +$1.04); sold into strength - Applied Genetic Technologies (AGTC +$0.12), Ionis Pharmaceuticals (IONS +$1.70)> and 1 MISS < Solid Biosciences (SLDB -$0.02)>

 

Henry’omics:

Stocks spiked on Friday after data showed the coronavirus-stricken U.S. economy unexpectedly added jobs in May.

  • The Labor Department’s jobs report Friday morning stunned market watchers, showing that the beleaguered economy added 2.5 million jobs last month, when consensus forecasts had called for another 8 million payrolls to be slashed. Meanwhile, the unemployment rate rose to 13.3%, well below expectations of a surge to 19.5%.
  • According to the Bureau of Labor Statistics, “total nonfarm payroll employment increased by 2.5 million in May, reflecting a limited resumption of economic activity that had been curtailed due to the coronavirus pandemic and efforts to contain it.”

The data pointed to a big market rally and suggested the economy could be on a much quicker than expected path to recovery.

  • Hopes that more businesses were ramping up activity amid the pandemic, along with optimism about a raft of new stimulus measures across the globe, eclipsed concerns of protests and unrest in many cities across the country.

The Dow was up 6.8% for the week, while the S&P 500 gained 4.9% and the Nasdaq Composite was up 3.4%.

 

RegMed/Cell and Gene therapy 35 covered equities’ Advance/Decline (A/D) lines: progressions and regressions …

  • Friday opened positive at 33/1 and 1 flat, swung neutral at the mid-day at 17/17 and 1 flat, closing negative at 16/19 and 0 flat;
  • Thursday opened negative at 16/18 and 1 flat, stayed negative at the mid-day at 14/19 and 2 flats, closing negative at 5/30 and 0 flat;
  • Wednesday opened positive at 18/14 and 3 flats, strayed negative at the mid-day at 15/18 and 2 flats, closing negative at 9/25 and 1 flat;
  • Tuesday opened negative at 13/30 and 2 flats, stayed negative at the mid-day at 13/30 and 2 flats, closing positive at 21/13 and 1 flat;
  • Monday opened positive at 30/13 and 2 flats, stayed positive at the mid-day at 21/12 and 2 flats, closing positive at 23/10 and 2 flats;

 

Key metrics:

  • Volume was WEAK with 5 out of the 16-upside having higher than the 3-month average volume and 5 out of the 19-downside having higher than the 3-month average volume;
  • Friday’s percentage (%) of the 16-upside were +0.02% (RARE) to +11.82% (ADVM) while the 19-downside ranged from -0.32% (FIXX) to -6.47% (CLBS);

 

Hammered in today’s market:

  • Alnylam Pharmaceuticals (ALNY), uniQure NV (QURE), Fate Therapeutics (FATE), CRISPR Therapeutics (CRSP), Global Blood Therapeutics (GBT)  and Cellectis SA (CLLS) to name a few of the 19 slipping of the 35 covered

Jumping with momentum:

  • ReNeuron (RENE.L), bluebird bio (BLUE), Ionis Pharmaceuticals (IONS), Adverum Biotechnologies (ADVM) and Sage Therapeutics (SAGE) to name a few of the 16 trading up of 35 covered

 

The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:

  • Friday, the IBB closed down -0.07% and XBI also closed up +0.81%
  • Thursday, the IBB closed down -0.91% and XBI also closed down -1.79%
  • Wednesday, the IBB closed down -1.32% and XBI also closed down -1.53%
  • Tuesday, the IBB closed up +0.32% and XBI also closed up +1.38%
  • Monday, the IBB closed down -0.47% and XBI also closed up +0.53%

 

Friday’s (top 10 of 16) incliners:

  • ReNeuron (RENE.L +$7.00);
  • bluebird bio (BLUE +$4.03 after Thursday’s +$1.80);
  • Adverum Biotechnologies (ADVM +$2.15 after Thursday’s -$0.59);
  • Ionis Pharmaceuticals (IONS +$1.63);
  • Sage therapeutics (SAGE +$1.10);
  • AxoGen (AXGN +$0.78 after Thursday’s -$0.41 and Wednesday’s +$0.58);
  • BioLife Solutions (BLFS +$0.65);
  • Brainstorm Cell Therapeutics (BCLI +$0.58 after Thursday’s +$0.37 and Wednesday’s +$0.23);
  • Voyager Therapeutics (VYGR +$0.20);
  • Regenxbio (RGNX +$0.36);

Friday’s (bottom 10 of 19) decliners:

  • Alnylam Pharmaceuticals (ALNY -$4.34 after Thursday’s -$5.35, Wednesday’s -$1.57, Tuesday’s +$5.25 and Monday’s -$1.70);
  • uniQure NV (QURE -$3.00);
  • Fate Therapeutics (FATE -$1.93);
  • CRISPR Therapeutics (CRSP -$1.68);
  • Global Blood Therapeutics (GBT -$1.41 after Thursday’s -$2.04 and Wednesday’s -$1.97);
  • Cellectis SA (CLLS -$0.65 after Thursday’s -$0.70 and Wednesday’s -$1.31);
  • Editas Medicine (EDIT -$0.440;
  • Intellia Therapeutics (NTLA -$0.30 after Thursday’s -$1.69, Wednesday’s +$2.07 <offering>, Tuesday’s -$0.66 and Monday’s +$3.41);
  • Sangamo Therapeutics (SGM) -$0.26);
  • Pluristem (PSTI -$0.14);

 

Percentage (%) movement/range statistics: look closely …

  • Friday’s percentage (%) of the 16-upside were +0.02% (RARE) to +11.82% (ADVM) while the 19-downside ranged from -0.32% (FIXX) to -6.47% (CLBS);
  • Thursday’s percentage (%) of the 5-upside were +2.76% (BLUE) to +8.64% (BSTG +0.17 with 1.430 shares) while the 30-downside ranged from -0.31% (BLFS) to -8.35% (ADRO);
  • Wednesday’s percentage (%) of the x-upside were +0.19% (ADRO) to +10.22% (NTLA) while the 9-downside ranged from -0.05% (BLUE) to -16.92% (PGEN); 
  • Tuesday’s percentage (%) of the 21-upside were +0.20% (GBT) to +83.33% (PGEN +$1.80) while the 10-downside ranged from -0.06% (QURE) to -23.74% (ADRO); 
  • 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); 

 

Sentiment and a few daily indicators:

The May jobs report represented a massive upside surprise, shocking market participants bracing for a surge in the unemployment rate to the highest since the Great Depression.

  • The report spurred cautious optimism, suggesting the economic recovery coming out of the coronavirus pandemic may be faster than previously anticipated.

The number of confirmed U.S. coronavirus cases: every day I get sadder as I post these numbers …

  • Friday 1.88 million
  • Thursday 1.85 million
  • Wednesday 1.84 million
  • Tuesday 1.81 million
  • Monday 1.79 million

Friday’s death rate escalated to a total of 108,768 after Thursday’s 107,175, Wednesday’s 106,636, Tuesday’s 105,147 and Monday’s 104,833 <Johns Hopkins University>

 

Upside volume stats: 

  • Friday: 5 out of the 16-upside had higher than the 3-month average volume;
  • Thursday: 1 out of the 5-upside had higher than the 3-month average volume;
  • Wednesday: 3 out of the 9-upside had higher than the 3-month average volume;
  • Tuesday: 4 out of the 21-upside had higher than the 3-month average volume;
  • Monday: 5 out of the 23-upside had higher than the 3-month average volume;

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Friday was down -1.29 points or -5% at 24.52;
  • Thursday was up +0.15 points or +0.58% at 25.81;
  • Wednesday was down -1.18 points or -4.40% at 25.66;
  • Tuesday was down -1.39 points or -4.92% at 26.84;
  • Monday was up +0.68 points or +2.40% at 28.17;

Downside volume stats:

  • Friday: 5 out of the 19-downside had higher than the 3-month average volume;
  • Thursday: 6 out of the 30-downside had higher than the 3-month average volume;
  • Wednesday: 3 out of the 25-downside had higher than the 3-month average volume;
  • Tuesday: 4 out of the 13-downside had higher than the 3-month average volume;
  • Monday: 2 out of the 10-downside had higher than the 3-month average volume;

Closing flat: 0

 

June

Friday closed negative with 16 advancers, 19 decliners and 0 flat

Thursday closed negative with 5 advancers, 30 decliners and 0 flat

Wednesday closed negative with 9 advancers, 25 decliners and 1 flat

Tuesday closed positive with 21 advancers, 13 decliners and 1 flat

Monday (6/1) positive with 23 advancers,10 decliners and 2 flats

 

The Bottom line:  We are all a product of our environment and in my case attached to the RegMed/Cell and Gene therapy sector and its surrounding market influences; “to paraphrase Mark Twain, reports about the labor market’s recovery may be greatly exaggerated.”

The U.S. is undoubtedly in the throes of a deep recession fomented by the coronavirus pandemic. Yet Friday’s nonfarm payrolls report showed employers added a stunning 2.5 million jobs in May — a shock to the system for a market convinced the world’s largest economy was in freefall.

There were certainly reasons to be cheerful about the data … and therein lies the risk, according to Mohamed El Erian, chief economic adviser at Allianz, who warned of a potential “major head fake” that could lessen the appetite in Washington for more economic support. <MarketWatch>

Reiterating, “I NEVER sidle-up to extremes – investors are looking at the worst data – virus pandemic and the highest unemployment in MY lifetime. Yet, here we see … all-time highs.”

It’s the skeptic in me … “caution is still warranted.”

 

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.