July 30, 2020 8:09am
It’s far less fun when the markets act like it’s their blueprint; sector equities have lately been alternating between the horrific and the benign.
Pre-open indications: 2 BUYs and 2 SELLs <Biostage (BSTG) Chronicles offer a cautionary tale>
Q2 Earnings: uniQure NV (QURE) and Ultragenyx Pharmaceutical (RARE) after the close
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Dow futures are DOWN -0.88% (-233 points), S&P futures are DOWN -0.93% (-30 points) and NASDAQ futures are DOWN -1.04% (-11 points)
U.S. stock futures are falling early Thursday projecting a lower opening;
European markets pulled back after the U.S. Fed held interest rates steady and earnings deluges while the pan-European Stoxx 600 slipped -0.7% in early trade;
Asia Pacific markets were mixed, Mainland China dipped, Japan slipped, although Australia finish trading positive as the MSCI Asia ex-Japan index was fractionally higher.
Data Docket: Data from the U.S. government showed gross domestic product plunged by a record 32.9% in the second quarter. The number was not as bad as feared, however, as economists surveyed by Dow Jones had expected a 34.7% decline.
U.S. weekly jobless claims came in at 1.434 million, roughly in line with estimates. However, continuing claims, or those who have been collecting for at least two weeks, totaled 17.018 million, up from about 16 million last week.
- Thursday’s data sent the benchmark 10-year Treasury yield lower to around 0.5%.
Key words from yesterday’s Fed meeting, “Powell made it loud and clear that our economic recovery is dependent on how we progress in fighting the pandemic,”
The DOW (+0.81%) S&P 500 (+1.24%) and Nasdaq (+1.35% closed higher.
Wednesday night’s post title – “yesterday, the sector coughed advances and today sneezed away more of the gains’
- The NASDAQ closed UP +140.85 points (+1.35%);
- The IBB closed down -1.11% and XBI also closed down -1.62%;
- Sector volume was LOW with 2 of the 9-upside having higher than the 3-month average volume and 6 out of the 25-downside having higher than the 3-month average volume;
- The CBOE Volatility Index (VVIX: INDEX) was down -1.34 points or -5.27% at 24.10;
- Wednesday’s percentage (%) of the 9-upside were +0.57% (MESO) to +5.88% (PSTI) while the 25-downside ranged from -0.13% (SAGE) to -8.80% (FIXX);
Last five (5) sessions:
- Wednesday closed negative with 9 advancers, 25 decliners and 1 flat
- Tuesday closed negative with 6 advancers, 27 decliners and 2 flats
- Monday (7/27) closed positive with 22 advancers, 11 decliners and 2 flats
- Friday closed negative with 7 advancers, 27 decliners and 1 flat
- Last Thursday closed negative with 4 advancers, 29 decliners and 2 flats
Companies in my headlights – It’s your decision; I provide an idea and context:
Biostage (BSTG) closed down -$0.01 to $2.59. On March 25, it was priced at $4.30, April 1st at $4.20, May 1st at $3.35, June 1st at $2.61, July 1st at $2.51 – so what does the price hold to the future?
Answer - UNDER $1.00, I’d take that bet as the multiple private rounds of $3.20, $3.50 and $3.70 and warrant executions amass millions of shares outstanding. What are their chances of financing – slim to none as warrant executions have kept them alive along with PPP funds received after raising a million dollars from the last warrant execution.
Questions NEED answers … do and did they deserve PPP funds after a most valuable senior scientist resigned rather than being forced to take a pay cut. Also, WHY did a BOD director/audit committee member reign abruptly after the entire accounting department walked-out with barely any notice?
These issues NEED to be transparent … also do these events constitute a need of oversight by regulatory bodies like the SEC and Mass Secretary of State enforcement division. Mrs. bin Zhou, as the major stocker holder and funder: WHY are you not overseeing the disorder wrecked by the current and latest iteration of a so-called management team? Public shareholders deserve accountability!
Facts are irrefutable and the First amendment of the U.S. Constitution protects American’s free speech.
BUY to SELL:
CRISPR Therapeutics (CRSP) closed down again -$0.30 to $85.53 after Tuesday’s -$5.72, Monday’s +$1.77, Friday’s -$0.45 and last Thursday’s -$2.17. CRSP has a negative -$0.30 or -0.35% aftermarket indication after an earnings and revenue miss;
bluebird bio (BLUE) closed down -$3.42 to $62.34 and has a positive +$0.36 or +0.58% pre-market indication on news of the submission of their Biologics License Application (BLA) to the U.S. FDA for idecabtagene vicleucel (ide-cel; bb2121), the companies’ and Bristol Myers Squibb (BMY) investigational B-cell maturation antigen (BCMA)-directed chimeric antigen receptor (CAR) T cell immunotherapy, for the treatment of adult patients with relapsed and refractory multiple myeloma. This submission provides further details on the Chemistry, Manufacturing and Controls (CMC) module to address the outstanding regulatory requests from the FDA in May 2020 following the original BLA submission from March 2020.
Homology Medicine (FIXX) closed down -$1.34 to $13.88 after Tuesday’s $15.22, Monday’s $15.03, last Friday’s $14.77 and the previous Thursday’s $15.30 and has a positive +$0.92 or +$6.63% aftermarket indication;
The BOTTOM LINE: Reiterating, “An earning’s beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earning’s beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earning’s miss.”
Once we get through Q2 LPS (loss-per-share) financial results <notice I didn’t say – earnings>, it will be easier for investors to possibly recognize a short or even a near-term view; but my fear is that Q2 numbers aren't going to look much better than the Q1/2020 numbers.
Expectation versus forecasts will be the theme of Q2’s earnings’ season.
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.