September 13, 2022 5:11pm
Another I told you so … more frequently right than consequentially wrong
32 on my 35-coverage list dived to some of last year’s depth
Pre-open indications: 7 HIT and 1 MISS
WHY and HOW is this market affecting the cell and gene therapy sector … “The Bottom Line” underlines the framework of share pricing actions.
I DEVOTE a HUGE amount of time to “reckoning” the geography of my coverage group - it’s more than opinion, I deal in the facts and numbers that back them up. Who else is tracking a broad grouping of cell and gene therapy equities – can you afford to not read facts supported by real numbers?
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 -1,276.37 points (-3.94%) the S&P closed DOWN -177.72 points (-4.32%) while the Nasdaq closed DOWN -632.84 points (-5.16%)
Indexes fell sharply on Tuesday after a key August inflation report came in hotter than expected, hurting investor optimism.
Revealing quote, “I think we may even go back and retest the June lows,” UBS director of floor operations Art Cashin, the market’s godfather said <CNBC>
As I wrote this a.m., “The August consumer price index report showed a higher-than-expected reading for inflation. Headline inflation rose 0.1% month over month, even with falling gas prices. Core inflation rose 0.6% month over month. On a year-over-year basis, inflation was 8.3%.”
Economic Data Docket: “Inflation is not just a gasoline issue. Inflation was broad last month, with shelter costs rising 0.7% for the month. New vehicle prices and medical care services increased 0.8% each. And even as gas prices have declined, food prices continue to rise. The food at home index, a proxy for grocery prices, is up 13.5% over the past year.” <CNBC>
RegMed Investor’s (RMi) Pre-Open: “watch and wait to make a buck. A bottom is not in … just a game of musical chairs as the markets play-on.” … https://www.regmedinvestors.com/articles/12600
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 2 up/ 31 down and 2 flats, stayed negative with 2 up/32 down and 2 flats at the mid-day, ending with a negative close of 3/32 and 0 flat.
- Monday’s advance/decline line opened negative at 12 up/ 22 down and 1 flat, stayed negative with 15 up/19 down and 1 flat at the mid-day, ending with a positive close of 21/14 and 0 flat.
Pre-open Indications: 7 HITs <Biostage (BSTG $0.30 with 500 shares traded), Intellia Therapeutics (NTLA -$2.05), Ionis Pharmaceuticals (IONS -$2.41), CRISPR Therapeutics (CRSP -$2.27), Caribou Therapeutics (CRBU -$0.46), Beam Therapeutics (BEAM -$4.25), uniQure NV (QURE -$0.34)> 1 MISS < Brainstorm Cell Therapeutics (BCLI +$0.02)>
- Tuesday - Sector volume was LOW with 1 of the 3-upside having higher than the 3-month average volume with LOW volume of 16 of 32-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 down -4.50% and the XBI was down -5.12%
- Monday, the IBB was up +0.18% and the XBI was up +0.76%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Tuesday was up +3.40 points or +14.24% at 27.27
- Monday was up +1.08 points or +4.74% at 23.87
Jumping with share pricing momentum (3 of 3):
- Adverum Biotechnologies (ADVM +$0.01 after Monday’s -$0.09),
- Applied Genetic Technologies (AGTC +$0.0012 after Monday’s -$0.0127),
- Brainstorm Cell Therapeutics (BCLI +$0.02 after Monday’s +$0.24),
Closing down (10 of 32):
- Alnylam Pharmaceuticals (ALNY -$5.41 after Monday’s -$11.27 and a debt security raise),
- Beam Therapeutics (BEAM -$4.25)
- Fate Therapeutics (FATE -$3.53 after Monday’s +$1.02),
- Ultragenyx (RARE -$2.97 after Monday’s -$0.46),
- Regenxbio (RGNX -$2.43 after Monday’s -$0.11),
- Ionis Pharmaceuticals (IONS -$2.41 after Monday’s +$1.82),
- CRISPR Therapeutics (CRSP -$2.27 after Monday’s +$2.86),
- Intellia Therapeutics (NTLA -$2.05 after Monday’s +$0.76),
- Chinook Therapeutics (KDNY -$1.67 after Monday’s +$0.52),
- Sage Therapeutics (SAGE -$1.51 after Monday’s -$0.04),
- Tuesday closed negative with 3 incliner, 32 decliners and 0 flat
- Monday closed positive with 21 incliner, 14 decliners and 0 flat
The BOTTOM LINE: The sell-off followed a hot inflation report spurred calls for the biggest Fed rate hike since the early 1980s which was particularly painful in cell and gene therapy sector stocks.
I try to keep it simple … and short!
The recently revived stock market rally ran headlong into the CPI inflation buzz saw on Tuesday. The major indexes and Russell 2000 all tumbled below their 50-day moving averages. Markets are fully pricing in at least 75 basis points for a third straight Fed meeting next week. But there's now a roughly one-third chance of 100 basis points, up from zero before the CPI data. Markets are betting on a higher year-end rate. A more aggressive Fed, higher Treasury yields and a stronger dollar aren't a great recipe for stocks. That's especially so when markets were betting on the opposite. <IBD>
September continued with 1 holiday, 5 positive and 3 negative closes; August is over with 1 neutral, 11 positive and 11 negative closes while last week which ended the month.
Yesterday, I wrote – “Despite gains in recent sessions, the sector’s volatility outlook is an "uptrend under pressure." It hit hard!
As I stated, for the past sessions, “it was time to take PROFITS” …
As I continually question, “The real question that should be asked is how many companies are at the end of sentiments … leash?
Start by looking at cell and gene therapy companies trading below cash!”
Repeating myself, “I find it very interesting to evaluate share price over earnings and a shortage of revenue reporting as a proxy for share pricing performance?”
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.