June 10, 2020 8:13am
Momentum is fragmented, volatility exceeds volume and we shouldn’t assume anything in our portfolio positions in this climate of anticipation as the Fed seeks to define the way forward
Pre-open indications: 2 BUYs and 4 SELLs
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Skim if you can trim, buy if it will fly and sell if compelled!
Dow future are DOWN -0.04% (-10 points), S&P futures are UP +0.10% (+3 points) and NASDAQ futures are UP +0.58% (+57 points)
U.S. stock futures are fluctuating as investors await clarity from the Fed’s policy meeting on the state of the economy and further stimulus;
European stocks reversed early gains as investors await the outcome of the U.S. Fed’s latest policy meeting and economic forecasts as the pan-European Stoxx 600 slid -0.2% below the flatline by mid-morning trade;
Asia Pacific stocks were mixed as Chinese inflation data for May missed expectations. All country and regions indexes were higher as the MSCI Asia ex-Japan index added “0.34%.
Data docket: Applications for loans to purchase a home rose 5% last week from the previous week and were 13% higher than a year ago, according to the Mortgage Bankers Association.
- The average contract interest rate for 30-year fixed mortgages rose to 3.38% from 3.37%.
Chairman Jerome Powell’s news conference is scheduled at 2:30 pm EST re the Federal Reserve’s quarterly summary of economic projections including its policy statement of continuation.
- The Fed will be revealing its first forecast for the economy and interest rates since late last year, as it skipped a forecast in March just as the pandemic forced the abrupt shutdown of the economy;
- Will the Fed’s purpose be refining yield curves, i.e. pinning down longer-term interest rates in its policy-setting meeting?
U.S. stock futures are mixed, European stocks gave up early gains as investors looked ahead to comments by Fed and the bank’s economic forecasts.
- The Fed is UNLIKELY to make any major policy changes, with its benchmark rate near zero and the asset purchasing programs continuing. Key question is the length of time that the Fed will keep current policies in place.
Concerning other countries and Asian regions - French industrial production plunged in April, while China’s factory-gate prices fell deeper into deflation in May.
Tuesday evening post’s title: “some upside rhymes and no accounting for downside reasoning of share pricing moves; yet, the risk-on trade really is gaining traction.”
- The NASDAQ closed UP +29.01 points (+0.29%);
- The IBB closed down -0.14% and XBI also closed down -0.17%;
- Tuesday opened positive and closed negative;
- Volume continued WEAK with 4 out of the 14-upside having higher than the 3-month average volume and 3 out of the 19-downside having higher than the 3-month average volume;
- Tuesday’s percentage (%) of the 14-upside were +0.19% (AGTC) to +15.58% (FATE) while the 19-downside ranged from -0.16% (VYGR) to -8.70% (ADRO);
- June registered 3 positive and 4 negative closes
- May registered 9 negative, 11 positive closes and 1 holiday.
- April registered 10 negative, 11 positive closes and 1 holiday.
- 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
Adverum Biotechnologies (ADVM) close up +$0.55 to $23.43 and started June at $21.26 and May at $12.00 with a 52-week change of +107.62%. Average 10-day volume is 854.2 k and 3 month average is 1.42 M shares traded after announcing (5/28) the initiation of INFINITY, a P2, multi-center, randomized, double-masked, active comparator-controlled trial to assess a single intravitreal (IVT) injection of ADVM-022 in patients with diabetic macular edema (DME). Time to lighten and profit;
SELL into strength from BUY:
Brainstorm Cell Therapeutics (BCLI) closed up +$0.74 to $9.20 after Monday’s -$0.62 after Friday’s +$0.58) even with news that the ALS Association and I AM ALS have awarded a combined grant of $500,000 to BCLI. The grant will be used to draw insights from data and samples collected from patients enrolled in BCLI's ongoing P3 clinical trial of its NurOwn® treatment, to further understanding of critical biomarkers associated with treatment response for people with ALS. Check the chart, lighten the load;
CRISPR Therapeutics (CRSP) closed up +$2.73 to $63.26 after Monday’s -$1.73 to $60.53 and has a negative -$0.24 or -0.38% aftermarket indication. A 52-week change of +39.09% that June initiated at a share price of $66.59 and May at $48.46. CRSP regained strength is worth selling-into and then as/if needed buy back-in.
Fate Therapeutics (FATE) closed up +$4.41 to $32.72 after Tuesday’s +$0.10 to $28.31 and has a positive +$0.68 or +2.08% aftermarket indication. Post an offering with Johnson & Johnson Innovation-JJDC, Inc. in a private placement, a number of shares of common stock in an aggregate purchase price of up to $50 million, at a price per share equal to the price to the public in the underwritten public offering which was priced at $28.31. A lot of new shares and many in safe hands.
Pluristem (PSTI) closed down -$0.27 to $7.05 after Monday’s -$0.40 to $7.32 and has a positive +$0.03 or +0.43% aftermarket indication. PSTI has been PUNISHED enough as according to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the number one position in PSTI, worth close to $900 K, amounting to less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Sabby Capital, led by Hal Mintz, holding a $700 K position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining peers that are bullish comprise Ken Griffin's Citadel Investment Group, Peter Algert and Kevin Coldiron's Algert Coldiron Investors and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Sabby Capital allocated the biggest weight to PSTI, around 0.29% of its 13F portfolio. Algert Coldiron Investors is also relatively very bullish on the stock, earmarking 0.03 percent of its 13F equity portfolio to PSTI. <stats from Insider Monkey> Speculative and still a risk-on but, started June at $7.94 and May at $8.41 after May 14’s update on the status of COVID-19 infected patients treated with PLX cells under a compassionate use program in Israel and the FDA Single Patient Expanded Access Program in the U.S. All treated patients were in Intensive Care Units (ICU), on invasive mechanical ventilation and suffered from Acute Respiratory Distress Syndrome (ARDS) at the time of treatment. As of today, a total of 18 patients were treated in Israel and in the U.S., of which 8 (1 in the U.S. and 7 in Israel) so far have completed a 28-day follow up period.
ReNeuron (RENE.L) has NOT been traveling well lately but, has a positive U.S. pre-market +$1.50 or 1.11% appreciation;
The BOTTOM LINE: Profit-taking won over yesterday (Tuesday), particularly in the share pricing sensitive RegMed/Cell and Gene therapy sector which hasn’t delivered in June registering 3 positive and 4 negative closes to date.
June initiates as a carnival ride themed month (after May’s bumpy road) – my version of the morning’s forecast is written to what I anticipate is about to happened
Have you heard of Albert Einstein’s definition of insanity? The one where he says it’s “doing the same thing over and over again and expecting different results?”
Don’t get too comfortable; unfortunately, share pricing strength has many a short-term adversary. Momentum with weak daily volume diminishes share pricing’s upside; if you were a subscriber … you would understand why!
This market is a merry-go-round and too VOLATILE, not to take monies OFF-the-table (when one can) because we don’t realize profit until SELLING.
I continue with MY personal contrarian and skeptical approach to forecasting about “our” universe of RegMed/Cell and Gene therapy companies.
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.