September 22, 2020 8:07am

Volatility was always lurking beneath sector equities as the quarter slowly ends

Pre-open indications: 3 BUYs and 2 SELLs

What I provide is an “intelligence daily” to ensure that shareholders are kept apprised based on a 24-hour surveillance of “our” universe, the RegMed/cell and gene therapy sector and its surrounding markets

Subscription is coming, it’s not conscription but, an offer to join our collective of like-minded investors!

My gift to you, I've kept RMi subscription FREE during these COVID-19 and volatile times!

 

Dow futures are UP +0.16% (+44 points), S&P futures are UP +0.34% (+9 points) and NASDAQ futures are UP +0.60% (+6 points)

 

Futures are “squeaking” up on the back of rumblings against further U.S. coronavirus fiscal stimulus, as lawmakers brace for a Supreme Court confirmation fight and Democrats assemble to shut-down government in leaving out the farm aid from budget which amplifies election agitation;

European stocks were slightly higher, attempting to bounce back from Monday’s losses on possibilities of more coronavirus restrictions and money laundering allegations as the pan-European Stoxx 600 gained +0.5%;

Asia-Pacific stocks fell after sharp declines on Monday following reports large sums of suspicious funds transfers, markets in Japan were closed again on Tuesday for a holiday while the MSCI Asia ex-Japan index fell -1.03%.

 

Data Docket: a hearing with U.S. Treasury Secretary Steven Mnuchin and Fed chair Powell in front of the House Financial Services Committee about pandemic responses

 

Henry’omics:

Pre-open futures on the Dow pointed to an opening loss of less than 20 points, the S&P 500 futures and the Nasdaq 100 futures are mixed.

Another session of anxious and uncertain endeavors; bet small and hope for the oversold’s “redemption”!

U.S. stocks suffered a sharp selloff on Monday but avoided a much uglier loss for the main benchmarks, as investors contended with the COVID-19 trajectory in Europe and a lack of progress toward another round of fiscal stimulus out of Washington.” <MarketWatch>

Real issues for consideration re market pricing:

  • The Chicago Fed’s national activity index, which is designed to gauge overall U.S. economic activity, fell to 0.79 in August from a revised 2.54 in the prior month;
  • The debt burden on the U.S. economy rose at a record pace in the second quarter, with the share of federal government debt soaring 58.9% to $22.58 trillion, as Washington ramped up is response to the pandemic, the Federal Reserve reported on Monday. <MarketWatch>

 

Monday night’s post: RegMed Investors’ (RMi) closing bell: uncertainty impales the sector. Look at a positive view, it’s a reset for the overbought with stimulus for the oversold … https://www.regmedinvestors.com/articles/11554

  • The Nasdaq closed DOWN -14.48 points (-0.13%);
  • The IBB closed down -2.56% and XBI closed down -3.55%;
  • Sector volume was NEGLITABLE with 0 of the 1-upside having higher than the 3-month average volume and the 1 of 33-downside having higher than the 3-month average volume;
  • The CBOE Volatility Index (VVIX: INDEX) was up +1.87 points or +7.24% at 27.71;
  • Monday’s percentage (%) of the 1-upside was +12.26% (BSTG) while the33-downside ranges from -0.86% (VYGR) to -10.64% (PGEN); 

Q3 so far:

  • September, 5 positive closes, 9 negative closes and 1 holiday
  • 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 up +$0.19 to $1.74 after Friday’s +$0.05 to $1.55, Thursday’s +$0.09, Wednesday’s -$0.14 to $1.41 and last Tuesday’s +$0.14 to $1.55. Question#1: Why has there been NO communication from president, Hong Yu other than 8-Ks; WHEN do the clinical trials begin?

BUY:

bluebird bio (BLUE) closed down -$2.16 to $54.50 with news of Bristol Myers Squibb (BMY) and BLUE today announced that the U.S. Food and Drug Administration (FDA) has accepted for Priority Review their Biologics License Application (BLA) for idecabtagene vicleucel (ide-cel; bb2121), the companies’ investigational B-cell maturation antigen (BCMA)-directed chimeric antigen receptor (CAR) T cell immunotherapy, for the treatment of adult patients with multiple myeloma who have received at least three prior therapies, including an immunomodulatory agent, a proteasome inhibitor and an anti-CD38 antibody. The FDA has set a Prescription Drug User Fee Act (PDUFA) goal date of March 27, 2021.

Brainstorm Cell Therapeutics (BCLI) closed down -$0.59 to $14.50 and has a positive +$1.00 or +6.90% aftermarket indication;

Mesoblast (MESO) closed down -$0.51 to $17.37 and has a positive +$0.13 or +0.75% aftermarket indication;

SELL into Strength:

CRISPR Therapeutics (CRSP) closed down -$0.77 to $85.13 and has a positive +$0.33 or +0.39% aftermarket indication;

 

The BOTTOM LINE: Tread cautiously, news is a stimulus but, algorithms are working against the flow…

Some say it better then I might, “Market volatility is returning after months of steady advances in risk assets, and we see elevated volatility ahead of the November U.S. election,” Jean Boivin, head of BlockRock Investment Institute, said in a note. “In addition, negotiations of a new U.S. fiscal package are dragging on, the pandemic is still spreading in many countries, and U.S. China tensions are running high.” <CNBC>

 

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.