September 2, 2020 7:46am

There is NO escaping from this risk

Pre-open indications: 1 BUY <News from Mesoblast (MESO)>and 1 SELL

The Biostage (BSTG) Chronicles – WHAT is the role of William Fodor, PhD at Biostage (?) <Read more>

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Dow futures are UP +0.63% (+179 points), S&P futures are UP +0.62% (+22 points) and NASDAQ futures are UP +0.97% (+119 points)

 

U.S. stock futures are running to a positive open on Wednesday;

European stocks were sharply higher despite troubling economic indicators in the region although the pan-European Stoxx 600 index was up +2%;

Asia Pacific stocks largely rose as data showed Australia’s economy has officially slid into a recession, Chinese stocks were mixed, Japan and South Korea were up with the MSCI Asia ex-Japan index jumping +0.31% higher

 

Data Docket: Applications to refinance a home loan decreased 3% for the week, although they were 40% higher than a year ago.

  • Total mortgage application volume fell 2% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 35% higher one year ago.
  • New data on auto sales pointed to a continued economic recovery, with Autodata saying the pace of sales for August coming in at just over 15 million. The reading was down 11% year-over-year but was the highest rate since February.
  • Investors will be watching the ADP payroll data on Wednesday morning, one of the last reads on the labor market before the official August jobs report is released on Friday.

 

Henry’omics:

The major U.S. indexes all rose during Tuesday’s regular session, with the Dow Jones Industrial Average and the Nasdaq closing at record highs. The S&P 500 rose 0.75%, which was its best first trading day of September since 2010.

The backdrop to the session was either up or mixed keeping markets stabilized but, what is truly “driving” these events – businesses are NOT opening and many workers have NOT returned to a normal employed environment.

 

Tuesday night’s post title – “upside evaporates with only four (4) positive moves”

  • The Nasdaq closed UP +164.21 (+1.39%);
  • The IBB closed down -1.90% and XBI also closed down -2.01%;
  • Sector volume was LOW with 2 of the 4-upside having higher than the 3-month average volume and the 6 of 29-downside having higher than the 3-month average volume;
  • The CBOE Volatility Index (VVIX: INDEX) was down -0.29 points or -1.10% at 26.12;
  • Tuesday’s percentage (%) of the 4-upside were +0.38% (VCEL) to +6.33% (BLFS) while the 29-downside ranges from -0.04% (CRSP) to -9.92% (BLCM); 

Q3 so far:

  • September, 1 negative close
  • August, 10 positive closes and 11 negative closes
  • 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 -$ 0.05 to $1.45 after Monday’s +$0.02 to $1.50 and Friday’s -$0.46 or -23.71% to $1.48 with 71,846 shares traded (the highest in YEARS),

  • Keep “PUMPING” the share purchases – it’s costing you more and the less goes to the operations of the company.

Analysts ask questions … and usually doesn’t get a response from this company. Wonder WHY … what is the “HIDE”?

  • Question #1 – What’s happening with the approved IND and the clinical trials that should have or not been started.
  • Question#2: WHAT is the role of William Fodor, PhD at Biostage and HOW has he played it – in relation to the IND filing, his interactivity with the team that united to “right” the issues surrounding the running of the company and then left while he stayed. Which brings forth another question …
  • Question#3: the depth of his involvements in the musical chairs and revolving executive doors at Biostage?

 

BUY from SELL on news:

Mesoblast (MESO) closed down -$0.41 to $18.95 and has a positive +$0.58 or +3.06% pre-market indication on news of receiving ethics approval to include Australian hospitals in the P3 randomized controlled trial of remestemcel-L in ventilator-dependent COVID-19 patients with acute respiratory distress syndrome (ARDS). Participating hospitals in Melbourne and Sydney have been granted approval by the Human Research Ethics Committee of Monash Health and will join more than 17 leading US medical centers already in the P3 trial. This study is being conducted by the US National Institutes of Health–funded Cardiothoracic Surgical Trials Network, and cleared by the US Food and Drug Administration (FDA)

 

The BOTTOM LINE: I am getting nervous about September in relation to “our” universe of RegMed Investors, cell and gene therapy companies.

Who has been in those expensive buildings as most and many are working from home during this pandemic with the interactions, communications and cooperation are only “zoomed”?

I am forecasting a “BAD” Q3 reporting outcome … as well as a correction in the markets which would also take down the sector.

The advice I continually state … “Skim if you can trim, buy if it will fly and sell if compelled!”

 

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.