July 23, 2021 7:43am

Although investors are unsure whether distressed sector equities are ready for serious infusion as earnings releases will poke holes in the dam

Investors who have stopped a dam from cracking by plugging a leak with a finger are already working overtime

Pre-open indications: 3 SELLs: ADVM, BLUE, EDIT; -1 Maintain SELL: BSTG

My version of the morning’s “indications” is about what you need to know; it’s what could happen or materialize after the opening and what might happen during the session

Dow futures are UP +0.45% (+157 points), S&P futures are UP +0.41% (+18 point) and NASDAQ futures are UP +0.38% (+57 points)

 

Stock futures are up on Friday, projecting a positive open and trying to post their fourth (4th) straight session of gains,

European stocks advanced, as investors digested a slew of economic data from across the continent,

  • July’s flash PMI (purchasing managers’ index) readings on Friday showed euro zone business activity growing at its fastest pace in more than two decades, as an easing of social restrictions and expansion of vaccination programs unleashed pent-up demand.
  • U.K. retail sales grew 0.5% in June after a surprise pullback in May, according to official figures published Friday. However, the country’s economic recovery ran into a wall in July as the number of people instructed to isolate by the government’s test-and-trace app soared due to rising infections.
  • The IHS Markit/CIPS flash PMI dropped to 57.7 in July from 62.2 in June.

Asia-Pacific were mixed as investors monitored Chinese tech stocks in Hong Kong after regulatory concerns resurfaced.

  • Beijing is considering harsh penalties on ride-hailing giant Didi. The penalties being planned range from a fine likely bigger than the record $2.8 billion Alibaba paid earlier this year to even a forced delisting after Didi’s IPO last month. <Bloomberg News>

 

Henry’omics:

The major U.S. indexes closed Thursday’s regular trading session higher to notch a three-day win streak.

  • Which could mean that there could be slippage today …!

Now the average heads into Friday with a 0.4% gain for the week and is back to within 1% of a new record. The S&P 500 is up 0.9% for the week and the Nasdaq Composite is up 1.8%. Both are also within 1% of a record. <CNBC>

 

Data Docket: PMIs for services and manufacturing are due at 9:45 a.m., with the Baker Hughes rig count following at 1 p.m.

 

Thursday’s evening’s recap: “key word, expectation was subjugated by another move to another extreme downside. As I stated this a.m., “my internal Ouija board has lost its spirit. Expect a continuation of low volume trading through the seasonally-weak summer months and a more than possible correction” … https://www.regmedinvestors.com/articles/12015

  • The Nasdaq closed UP +52.84 points (+0.36%);
  • The IBB closed up +0.26% and XBI closed down -1.26%;
  • Sector volume was LOW with 1 of the 6-upside having higher than the 3-month average volume with very LOW volume of 3 of 26-downside having higher than the 3-month average volume;
  • The CBOE Volatility Index (VVIX: INDEX) was down -0.22 points or -1.23% at 17.69;
  • Thursday’s percentage (%) of the 6-upside were +0.16% (FATE) to +2.12% (IONS) while the 26-downside ranges from -0.90% (RGNX) to -9.41% (KDNY);

The week to date; 2 positive (Wednesday and Tuesday) and 2 negative (Monday and Thursday) closes

Q3/21: July, 5 positive, 1 holiday and 10 negative close

Q2/21:

  • June: 15 positive and 8 negative closes
  • May:  8 positive, 12 negative closes and 1 holiday
  • April: 11 negative and 10 positive closes

Q1/21:

  • March: 10 positive, 12 negative and 1 neutral closes
  • February: 9 positive, 10 negative closes and 1 holiday
  • January: 10 positive, 9 negative closes and 1 holiday

 

Companies in my headlights – It’s your decision; I provide an idea and context:

The Biostage (BSTG) Chronicles - Maintaining Sell – Could the share price stay up if it wasn’t being “pumped”?

Biostage (BSTG) closed flat with 200 shares traded after Wednesday’s +$0.01 with 200 shares traded, Tuesday’s flat at $1.70 with 49 shares traded after Monday’s +$0.01 to $1.71 with 307 shares traded.

Question#1: WHAT is the end game or play-book for this company, it has not done ANYTHING to monetize their asset of an approved IND with NO clinical trial initiative … so WHERE and WHAT is the value proposition?

MINORITY PUBLIC shareholders are waiting for the specific time, watching and weighing responses to MAINTAIN their RIGHTS.

 

The morning’s indications:

SELL:

Adverum Biotechnologies (ADVM) closed down -$0.09 to $3.06 and has a NEGATIVE -$0.36 or -20.49% pre-market indication. In a review of data available from the INFINITY clinical trial in patients with diabetic macular edema (DME) and the OPTIC clinical trial in patients with wet age-related macular degeneration (wet AMD). The data from the studies show marked differences in the safety profile between the two patient populations and between the low (2 x 10^11 vg/eye) versus high (6 x 10^11 vg/eye) doses. Adverum no longer plans future development for DME after a dose-limiting toxicity (DLT) not seen before in ocular gene therapy or anti-VEGF treatment has been observed at the high dose (6 x 10^11 vg/eye) in patients with DME.

bluebird bio (BLUE) closed down -$0.51 to $26.98 and has a NEGATIVE -$0.28 or -1.904% pre-market indication

Editas Medicine (EDIT) closed down -$1.08 and has a negative -$1.01 or -2.35% pre-market indication.

 

 

The BOTTOM LINE: Although we firmly think the sector is alive and well, let’s not fool ourselves into thinking that earnings season won’t take its toll on share pricing.

Risk is no doubt increasing as we head into the troublesome August and September months

Volatility is still front-and-center in the sector … after reviewing the week beginning the 19th.

I also continue to be a skeptic yet; earnings expectations will mostly depend on management's discussion of “up-coming” clinical advances on the earnings call

The cell and gene therapy sector is still a bit confusing as sentiment rages and fades, momentum is burped and usurped as fundamentals seem ignored.

Q2 earnings LPS (loss-per-share) release date are soon to be divulged and not positively; yet another – Sage Therapeutics (SAGE) and Alnylam Pharmaceuticals (ALNY) release “earnings” on 8/3 followed by Vericel (VCEL), MiMedx (MDXG), AxoGen (AXGN) on 8/4 and Athersys ATHX) on 8/9 – so far.

My focus has always been “indication and warning analysis” … my advice, trim and skim any new highs if one can!” I also see a number of lows that could be in the “pick-up” stock game.

My motto, never leave an investor uninformed about what I know!

 

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.

Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.