RegMed Investors’ (RMi) closing bell: markets need election clarity, whether we individually like it or not

November 3, 2020 6:36pm

The main threat is risk to asset holdings is the emergence of a contested election

Pre-open indication results: 5 HITs and 2 Miss

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The Dow closed UP +554.98 points (+2.06%), the S&P closed UP +58.92 points (+1.78%) while the Nasdaq closed UP +292.96 points (+1.85%)

Henry’omics:

Indexes jumped on Tuesday as investors hoped a winner would emerge from voting – tonight of their own choice.

Investors are also eyeing the key Senate elections which will determine the make-up of the Congress.

Back to business, November is moving positive for its two sessions, after last week, when all three indexes suffered their worst weekly losses since March 20, which led to sharp declines for October.

Pre-open indication: 5 HITs < Athersys (ATHX -$0.03), Applied Genetic Technologies (AGTC +$0.20), Vericel (VCEL +$1.550:  Sell into Strength: Editas Medicine (EDIT -$4.07) uniQure NV (QURE -$0.46)> and 2 MISS < Biostage (BSTG +$0.09), Brainstorm Cell Therapeutics (BCLI +$0.14)>

This morning, I stated in this a.m.’s newsletter – RegMed Investors’ (RMi) pre-open: “today’s outcome, the future of “our” country is at stake” … https://www.regmedinvestors.com/articles/11617

RegMed/Cell and Gene therapy 35 covered equities’ Advance/Decline (A/D) lines: progressions and regressions …

• Tuesday opened positive at 27/5 and 3 flats, stayed positive at the mid-day at 24/10 and 1 flat, closing positive at 30/4 and 1 flat;
• Monday opened positive at 23/8 and 4 flats, strayed negative at the mid-day at 9/23 and 3 flats, closing positive at 17/15 and 3 flats;

Key metrics:

• Sector volume was the usual LOW with 4 of the 30-upside having higher than the 3-month average volume with the increased volume of 2 of 4-downside having higher than the 3-month average volume;

• Tuesday’s percentage (%) of the 30-upside were +0.13% (CLLS) to +12.23% (PGEN) while the 4-downside of -1.10% (RENE.L) to -9.55% (EDIT);

Hammered in today’s market:

• Editas Medicine (EDIT), uniQure NV (QURE), ReNeuron (RENE.L), Bellicum Pharmaceuticals (BLCM) to name 4 of the 4 declining of the 35 covered

Jumping with share pricing momentum:

• Ultragenyx (RARE), Alnylam Pharmaceuticals (ALNY), Sage Therapeutics (SAGE), Vericel (VCEL) Fate Therapeutics (FATE) to name 5 of the 30 inclining of the 35 covered

The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:

• Tuesday, the IBB closed up +1.77% and XBI closed UP +2.71%
• Monday, the IBB closed down -0.18% and XBI closed down -0.01%

Tuesday’s (10 of 30) incliners:

• Ultragenyx (RARE +$6.47 after Monday’s -$4.97);
• Alnylam Pharmaceuticals (ALNY +$4.14 after Monday’s +$1.94);
• Sage Therapeutics (SAGE +$2.55 after Monday’s -$1.70);
• Vericel (VCEL +$1.84 after Monday’s +$0.55);
• Fate Therapeutics (FATE +$1.63 after Monday’s -$0.46);
• Global Blood Therapeutics (GBT +$1.52 after Monday’s -$0.41);
• bluebird bio (BLUE +$1,46 after Monday’s +$1.38);
• BioLife Solutions (+$1.35 after Monday’s +$0.85);
• Intellia Therapeutics (NTLA +$0.95 after Monday’s +$0.38);
• Adverum Biotechnologies (ADVM +$0.78 after Monday’s +$0.43);

Tuesday’s (4 of 4) decliner:

• Editas Medicine (EDIT -$2.99);
• uniQure NV (QURE -$1.58 after Monday’s +$0.44);
• ReNeuron (RENE.L -$1.00 after Monday’s -$4.00);
• Bellicum Pharmaceuticals (BLCM -$0.13 after Monday’s -$0.43);

Closing flat - 1 –Stemline Therapeutics (STML – acquired)

Percentage (%) movement/range statistics: a 360 degrees comparison of % and pricing

• Tuesday’s percentage (%) of the 30-upside were +0.13% (CLLS) to +12.23% (PGEN) while the 4-downside of -1.10% (RENE.L) to -9.55% (EDIT);
• Monday’s percentage (%) of the 17-upside were +0.19% (VYGR) to +14.66% (MDXG) while the 15-downside of -0.11% (PSTI) to -11.59% (BLCM);

Sentiment and a few daily indicators:

Investors are investing for WHO they think will win, and hoping for their party’s margin of victory. Investors are not expecting a long period of uncertainty – they're hoping that things are predictable, contrary to many expectations in today’s Election Day. Many will be happy and some unhappy?

Infection cases <Million>:

• Tuesday 9.29 M cases
• Monday 9.2 M cases
• Friday 8.99 cases

Tuesday’s death rate totaled 231,566 after Monday’s 231,011, Friday’s 229,141, Thursday’s 227,706, Wednesday’s 226,777 and last Tuesday’s 226,436 <Johns Hopkins University>

Stats:

Upside volume: 

• Tuesday: 4 out of the 30-upside had higher than the 3-month average volume;
• Monday: 7 out of the 17-upside had higher than the 3-month average volume;

The CBOE Volatility Index (VVIX: INDEX) tracked:

• Tuesday was down -1.58 points or -4.26% at 35.55
• Monday was down -0.89 points or -2.34% at 37.13

Downside volume:

• Tuesday: 2 out of the 4-downside had higher than the 3-month average volume;
• Monday: 5 out of the 15-downside had higher than the 3-month average volume;

November, the 2^nd month of Q4 …

Tuesday closed positive with 30 advancers, 4 decliners and 1 flat 

Monday (11/2) closed positive with 17 advancers, 15 decliners and 3 flats 

Commentary: As the U.S. votes to elect the next president, hedge fund luminary Ray Dalio cites political polarization as the "greatest problem of our time"— worsened by people being "passionately attached to their opinions" and unable to disagree thoughtfully.

Amid a still-unfolding and highly divisive election cycle, the founder of the $138 billion Bridgewater Associates hedge fund — the world’s largest — explained why he isn't confident the country can return to civility.

"I'm not optimistic that we can get there, but I do know that we can get there if people are fearful of the consequences of not getting there."

According to Dalio, the "most important thing" for the U.S. is "to do the fundamentals things" and "to come together."

I couldn’t agree more …!!!

The Bottom Line: The world’s markets are in a holding pattern as investors await clarity on the U.S. election!

Now we enter the big upswing in sector earnings’ LPS (loss-per-share) releases with the next month likely to remain volatile and uncertain.

Reiterating,” short-term risk and sentiment continue to weigh on investors, there are certainly fleeting patterns.’

Until then, I’d keep the lid on your portfolio if you haven’t reduced risk and sit with your back to the wall … to see what’s coming before you!

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.