July 26, 2022 4:45pm
Brace for a blitz of earnings and economic data this week, as well as the outcome of the Fed meeting, that will direct expectations for the remainder of 2022
Pre-open indications: 1 MISS and 5 HITs
Earnings: more sector companies (8) are announcing dates of releases <see Bottom Line>
WHY and HOW is this market affecting the cell and gene therapy sector … “The Bottom Line” underlines the framework of share pricing actions. Who else is tracking a broad grouping of cell and gene therapy equities – can you afford to not read facts supported by real numbers?
No tunnel vision here, I get into the weeds of daily share pricing and causes
If I have learned one thing as a former research analyst, venture and public fund investor now a journalist; it is that your life and your bank account are largely tied to your knowledge of price movements and questioning pricing targets.
The Dow closed DOWN -228.66 points (-0.71%); the S&P closed DOWN -45.84 points (-1.16%) while the Nasdaq closed DOWN -220.09 points (-1.87%)
U.S. stock indexes fell on Tuesday …
The S&P 500 consumer discretionary index slid 3.2%, leading sectoral declines. The S&P 500 retailing index dropped 3.9%.
Advance Q2 GDP data on Thursday is likely to be negative after the U.S. economy contracted in the first three months of the year.
An appropriate quote from others in the know, “The bottom line is the Fed, no matter how you cut it, is going to quickly move to that restrictive stance that will have a toll on the economy,” Lang said. “It’s going to get there quickly enough, whether it’s an extra 25 basis points next time versus a month later. Within the next six months we’re going to be in a financially restrictive environment.”
Economic Data Docket: A bevy of economic data pointed to a weakening economy. The Conference Board's Consumer Confidence index dropped to 95.7 in July from 98.4 in June. Economists surveyed by Econoday expected 96.8. The S&P Corelogic Case-Shiller home price index rose 1.3% in May vs. the prior month, and it missed economist forecasts for a 1.6% increase. That gain decelerated from a revised 1.7% rise in April. Housing prices remain strong but the lower-than-expected figure indicates that rising mortgage rates and high home prices are pushing some home buyers out of the market.
- On-target quote, “The decline in consumer confidence tells us that the economy is on unsure footing," said Jeffrey Roach, Chief Economist for LPL Financial.
RegMed Investor’s (RMi) Pre-Open: “a pivotal month ending week. Don’t crowd the exits in a volatile stock market despite recent signs of strength” … https://www.regmedinvestors.com/articles/12533
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened …
- Tuesday’s advance/decline line opened negative at 7 up/ 26 down and 2 flats, ascended positive with 26 up/7 and 2 flats at the mid-day, ending with a negative close of 13/19 and 3 flats.
- Monday’s advance/decline line opened negative at 11 up/ 20 down and 4 flats, stayed negative with 6 up/28 and 1 flat at the mid-day, ending with a negative close of 14/20 and 1 flat.
Pre-open Indications: 5 HITs < Editas Medicine (EDIT -$0.11), Biostage (BSTG -$0.00 with 0 shares traded), Verve Therapeutics (VEVR -$1.27), Sangamo Therapeutics (SGMO $0.00)> > 1 MISS < Beam Therapeutics (BEAM +$0.17)>
- Tuesday - Sector volume was LOW with 1 of the 13-upside having higher than the 3-month average volume with LOW volume of 1 of 19-downside having higher than the 3-month average volume;
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Tuesday, the IBB was up +0.20% and the XBI was up +0.43%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Tuesday was up +1.55 points or +6.64% at 24.91
Jumping with share pricing momentum (13 of 13):
- Fate Therapeutics (FATE +$0.64 after Monday’s -$0.30),
- CRISPR Therapeutics (CRSP +$0.62 after Monday’s +$0.68),
- Regenxbio (RGNX +$0.57 after Monday’s +$0.03),
- Chinook Therapeutics (KDNY +$0.34 after Monday’s +$0.05),
- Sage Therapeutics (SAGE +$0.18 after Monday’s -$0.45),
- Beam Therapeutics (BEAM +$0.17 after Monday’s +$1.09),
- Agenus (AGEN +$0.15 after Monday’s +$0.02),
- Vericel (VCEL +$0.15 after Monday’s +$0.18),
- Voyager therapeutics (VYGR +$0.11),
- MiMedx (MDXG +$0.03 after Monday’s +$0.08),
- Bellicum Pharmaceuticals (BLCM +$0.03 after Monday’s +$0.03),
- Applied Genetic Technologies (AGTC +$0.004),
· Adverum Biotechnologies (ADVM), Biostage (BSTG) and Sangamo Therapeutics (SGMO)
Closing down (10 of 19):
- Verve Therapeutics (VERV -$1.27 after Monday’s -$0.83),
- Alnylam Pharmaceuticals (ALNY-$1.20 after Monday’s -$2.01),
- Ultragenyx (RARE -$0.77 after Monday’s -$0.56),
- Ionis Pharmaceuticals (IONS -$0.27 after Monday’s +$0.22),
- Mesoblast (MESO -$0.20),
- Global Blood Therapeutics (GBT -$0.17 after Monday’s -$0.14),
- Intellia Therapeutics (NTLA +$0.12 after Monday’s +$0.32),
- AxoGen (AXGN -$0.12 after Monday’s +$0.06),
- BioLife Solutions (BLFS -$0.12 after Monday’s -$0.94),
- Editas Medicine (EDIT -$0.11 after Monday’s +$0.40),
- Tuesday closed negative with 13 incliner, 19 decliners and 3 flats
- Monday closed negative with 20 incliner, 14 decliners and 1 flat
The BOTTOM LINE: I try to keep it simple … and short!
Thus, week has a lot of anxiety built-in also with a lot of headwinds, but the good news is that expectations have been set much lower for earnings than they would have been last quarter ago (the first sector company – Ultragenyx (RARE) and Alnylam Pharmaceuticals (ALNY) to release – 7/28).
Sector expectations are really low as earnings season begins next week; remember, a little bit of good news can go a long way when you have low expectations.
Volume is still low …
The coming next two (2) weeks will reveal more about the cell and gene therapy sector's state of health.
However, what will the cell and gene therapy sector start to sniff out – Q2 earnings as Ultragenyx (RARE) and Alnylam Pharmaceuticals (ALNY) on Thursday 7/28, Sage Therapeutics (SAGE) on 8/2; and AxoGen (AXGN), Editas Medicine (EDIT), Fate Therapeutics (FATE), MiMedx (MDXG) and Vericel (VCEL) on Wednesday, 8/3.
investors should be bracing for a milder-than-usual earnings season and downwardly LPS (loss-per-share) predictions,
I find it very interesting to evaluate share price over earnings as a proxy for performance.
We always need a villain and they are multiplying – “Earnings’ season is coming, investors NEED to focus on LPS (loss-per-share), collaboration revenues and cash positions i.e., runways”.
I stick to my view of anticipating the risks – as my careers focus has been “warning analysis”.
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.
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.