August 4, 2020 8:00am
It’s not the movie … how long can markets ignore coronavirus deaths and headlines, damage to the economy, once normal living and continue animus over a fiscal relief package
Q2 Earnings: six (6) coming on Wednesday, 8/5/2020
Pre-open indications: 2 BUYs and 5 SELLs <Biostage (BSTG) Chronicles offer a yet another warning>
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Dow futures are DOWN -0.28% (-75 points), S&P futures are -0.40% (-13 points) and NASDAQ futures are DOWN -0.44% (-48 points)
U.S. stock pre-market open futures traded down on Tuesday after yesterday’s gains to start the second day of August’s trading month;
European stocks declined after positive manufacturing data around the world drove stocks higher to start the week with the pan-European Stoxx 600 falling -0.5%;
Asia Pacific stocks rose after the Reserve Bank of Australia opted to leave its monetary policy stance unchanged to maintain the current policy settings as the MSCI Asia ex-Japan index rose 1.47%.
Henry’omics:
All investor’s eyes are monitoring U.S. fiscal stimulus talks, with Congressional Democrats and the White House on Monday hinting at progress as lawmakers look to hammer out a new coronavirus relief bill.
Monday night’s post title – “reap what one can, markets are disconnected from the economic realities; weather the volatility, pare gains and take some “money off the table” as sector earnings’ ramp”
- The NASDAQ closed UP +157.52 points (+1.47%);
- The IBB closed up +3.13% and XBI also closed up +4.20%;
- Sector volume was LOW with 8 of the 31-upside having higher than the 3-month average volume and the 1 of 1-downside having higher than the 3-month average volume;
- The CBOE Volatility Index (VVIX: INDEX) was down -0.18 points or -0.74% at 24.28;
- Monday’s percentage (%) of the 31-upside were +1.33% (AGTC) to +8.24% (CRSP) while the 1-downside was -14.80% (BSTG);
Last five (5) sessions:
- Monday (8/3) closed positive with 31 advancers, 1 decline and 3 flats
- Friday (7/31) closed negative with 7 advancers, 27 decliners and 1 flat
- Thursday closed positive with 24 advancers, 8 decliners and 3 flats
- Wednesday closed negative with 9 advancers, 25 decliners and 1 flat
- Last Tuesday closed negative with 6 advancers, 27 decliners and 2 flats
Q3 so far:
- August, 1 positive close
- July -11 positive and 11 negative closes with 1 holiday
Companies in my headlights – It’s your decision; I provide an idea and context:
Maintaining Sell:
Biostage (BSTG) closed down -$0.37 to $2.13 after Friday’s +$0.40, Thursday’s -$0.49, Wednesday’s -$0.01. 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 for the future? … Under $1.00 after ALL the private placement millions of shares are calculated into the outstanding share numbers versus the float.
From the NY Times (front page), “in an upcoming economic relief package, a provision proposed by Senate republicans would make businesses partially owned by Chinese companies (92% of BSTG) or have a Chinese resident on the board of directors … ineligible for the next round of loan money’ and also deny forgiveness … if it turned out the <past> borrower was …not eligible or misrepresented their business in the loan documents.”
Biostage (BSTG) received on May 1, 2020 (8-K) a $404,221.00 PPP loan through Bank of America after raising $1 million through warrant exercises … Jason Chen, the chairman of the board and another director - Ting Lee reside in Beijking, while Wei Zhang, MD resides in Peking, China.
Biostage (BSTG) public shareholders deserve accountability. Mrs. bin Zhou, the major stock holder and head of DST Capital, BSTG’s funder: WHY are you not overseeing the disorder wreaked by the current so-called management team?
Facts are irrefutable and the First amendment of the U.S. Constitution protects American’s free speech.
SELL:
Athersys (ATHX) closed up +$0.13 to $2.69 and has a negative -$0.04 or -1.48% aftermarket indication;
Pluristem (PSTI) closed up +$1.24 after Friday’s +$0.65 and has a negative -$0.04 or -0.36% aftermarket indication. I LIKE PSTI however, most pricing inclines are usually met with resistance’
Sell into Strength:
Editas Medicine (EDIT) closed up +$2.21 to $31.57 after Friday’s -$1.27 with a 52-week change of +22.69% and has a positive +$0.33 or +1.05% aftermarket indication as earnings are due this week;
uniQure NV (QURE) closed up +$0.86 to $42.59 and has a negative -$0.60 or -1.40% aftermarket indication;
BUY:
Homology Medicine (FIXX) closed up +$1.10 to $14.25 after Friday’s -$0.79 and has a positive +$0.24 or +1.68% aftermarket indication;
Mesoblast (MESO) closed up +$0.85 to $14.37 after Friday’s -0.23 and has a positive +$0.27 or +2.76% aftermarket indication. 7/30 news, the independent Data Safety Monitoring Board (DSMB) has set a date for early September to complete the first interim analysis of the P3 trial of remestemcel-L in ventilator dependent COVID-19 patients with moderate to severe acute respiratory distress syndrome (ARDS). The trial’s first 90 patients will have completed 30 days of follow up during August, after which the DSMB will perform an interim analysis review of the safety and efficacy data. The DSMB will then inform Mesoblast on whether the trial should proceed as planned, or should stop early. There are currently no approved treatments for COVID-19 ARDS, the primary cause of death in patients infected with COVID-19. Also, The Oncologic Drugs Advisory Committee (ODAC) of the FDA has scheduled a meeting for August 13, 2020 to review data supporting the Biologics License Application (BLA) for approval of RYONCIL in the treatment of steroid-refractory acute graft versus host disease (SR-aGVHD) in children;
The BOTTOM LINE: I usually don’t invest in an earnings’ laden week waiting for the pre and post reporting effects!
After the hop-scotch week and the July’s roller-coaster month, who is willing in their right mind to be LONG – the “boulders are weakening on “Sentiment Mountain”!
Expectation versus forecasts will be the theme of Q2’s LPS (loss-per-share) season.
The first full week of August brings more … AxoGen (AXGN), Cellectis SA (CLLS), Sangamo Therapeutics (SGMO), Fate therapeutics (FATE), Global Blood Therapeutics (GBT), Ionis Pharmaceuticals (IONS) on 8/5, Alnylam Pharmaceuticals (ALNY), Regenxbio (RGNX) and Editas Medicine (EDIT) Bellicum Pharmaceuticals (BLCM), Intellia Therapeutics (NTLA) on 8/6.
Insight is about understanding perception and putting into context what is relevant to expectation fulfillment.
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.
