August 5, 2020 8:01am

Q2 Earnings: AxoGen (AXGN), Cellectis SA (CLLS), Sangamo Therapeutics (SGMO), Fate therapeutics (FATE), Global Blood Therapeutics (GBT), Ionis Pharmaceuticals (IONS), Brainstorm Cell therapeutics (BCLI)

Pre-open indications: 1 BUY and 2 SELLs <Biostage (BSTG) Chronicles offer a yet another warning>

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Dow futures are UP +0.68% (+182 points), S&P futures are UP +0.53% (+18 points) and NASDAQ futures are UP +0.30% (+34 points)

 

U.S. stock futures are up on Wednesday proposing a positive open maybe, for a fourth day;

European stocks traded higher as investors digested another round of earnings reports, but weaker-than-expected euro zone economic data capped gains.

  • The pan-European Stoxx 600 was up 0.4% by mid-morning, paring earlier gains after July’s final euro zone PMI (purchasing managers’ index) reading came in at a modest 56.5, with the bloc’s dominant services sector showing a weaker rebound than expected.

Asia Pacific were mixed on Wednesday as uncertainty remains over the state of coronavirus relief stateside as the MSCI Asia ex-Japan index only gained 0.6%.

 

Data docket: Private payrolls data from ADP will be released at 8:15 am ET and investors will be watching if companies continued to bring back workers from their pandemic furlough in July. Economists are expecting 1 million private workers were added in July, down from the 2.369 million added in June.  The final read on July Services PMI will be released at 9:45 am ET. Economists are expecting a read of 49.6, the same as June. Finally, the ISM nonmanufacturing survey is set to release at 10:00 ET. Economists estimate a red of 55 down from June’s read of 57.1.

  • ADP reported that private payrolls in the U.S. increased by just 167,000 in July. That’s well below an estimate of 1 million and represents a tumble from the 4.314 million added in June;
  • The services PMI – previously known as the “non-manufacturing index” – rose to 58.1 in July, from 57.1 in June. Consensus economists had expected the index to fall to 55.0. Readings above the neutral level of 50.0 indicate expansion. July’s print marked a second straight month of expansion after contractions in April and May.

 

Henry’omics:

The country is still hanging in the wind by waiting for stimulus negotiation.

 

Tuesday night’s post title – “today is what I was warning about, capacity for the sector to sustain share pricing; a bubble is a bubble until stimulus “talks” are solidified and even then?”

  • The NASDAQ closed UP +38.37 points (+0.35%);
  • The IBB closed down -0.64% and XBI also closed down -0.31%;
  • Sector volume was LOW with 2 of the 13-upside having higher than the 3-month average volume and the 2 of 20-downside having higher than the 3-month average volume;
  • The CBOE Volatility Index (VVIX: INDEX) was down -0.52 points or -2.14% at 23.76;
  • Tuesday’s percentage (%) of the 13-upside were +0.08% (IONS) to +7.52% (MESO) while the 20-downside ranged -0.10% (BLFS) to -8.90% (ADRO); 

Last five (5) sessions:

  • Tuesday closed negative with 13 advancers, 20 decline and 2 flats
  • 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
  • Last Wednesday closed negative with 9 advancers, 25 decliners and 1 flat

Q3 so far:

  • August, 1 positive close and 1 negative 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 -$0.01 after Monday’s -$0.37 to $2.13. 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 Beijing, while the third director, 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:

Pluristem (PSTI) closed down -$0.88 to $10.16 after Monday’s +$1.24 and Friday’s +$0.65 and has a negative -$0.20 or -1.97% aftermarket indication. I LIKE PSTI however, most pricing inclines are usually met with resistance’

 

BUY

Editas Medicine (EDIT) closed up +$0.31 to $31.88 after Monday’s +$2.21 and Friday’s -$1.27 with a 52-week change of +30.12% and has a positive +$0.84 or +2.63% aftermarket indication as earnings are due this week;

 

 

The BOTTOM LINE: I usually don’t invest in an earnings’ laden week waiting for the pre and post reporting effects!

As the hop-scotch week evolves after 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.

Today brings … AxoGen (AXGN), Brainstorm Cell Therapeutics (BCLI), Cellectis SA (CLLS), Sangamo Therapeutics (SGMO), Fate therapeutics (FATE), Global Blood Therapeutics (GBT), Ionis Pharmaceuticals (IONS) on 8/5.

 

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.