May 15, 2023 7:38am

The debt-ceiling limit could be the biggest market concern

Earnings: Biostage (OTCQB: BSTG) issued a 10-Q (late Friday, NO press release or conference call – wonder WHY?), reporting a Q1/23 net loss of -$2.89 M or -$0.24 per share with a cash position of $3,369 M and a runway until Q4/2023. Verve Therapeutics and Brainstorm Cell Therapeutics (BCLI) on Monday;

Pre-open indications: 2 Positive and 1 Negative indications

My interpretation of the morning’s numbers is written to be informative; it’s built on what happened or will happen behind the headline today, not tomorrow or yesterday.

Subscription is coming, it’s not conscription but, an offer to join our collective of like-minded investors!  Join me … in the NO spin zone.

8:00 a.m. edition

Remember that overnight and pre-open actions in futures don't necessarily translate into actual trading in the coming day’s session. My interpretation of the morning’s numbers is written to be informative; it’s built on what will happen behind the headlines today, not tomorrow or yesterday

 

Dow futures are UP +0.37% or (+125 points), S&P futures are UP +0.37% or (+15 point) and NASDAQ futures are UP +0.28% or (+38 points) early in the pre-open – so far

U.S. stock futures rose on Monday,

European markets were mixed,

Asia-Pacific markets were mostly higher.

 

Henry’omics:

We need to more than consider the economic environment - rising rates and inflation to comprehend the micro re “our” universe of cell and gene therapy companies …

A new week of trading, with developments on the looming U.S. debt ceiling in focus alongside a trickle of economic data and remarks from central bank officials due in the coming days.

Friday, the Dow dropped -8.89 points lower, or -0.03%, the Nasdaq fell -0.35%, down -43.76 points while the S&P 500 slipped- 0.16% or -6.54 points.

Must read/consider quote, ““Sentiment hasn’t been helped by the political theater around the U.S. debt ceiling which has dominated the discourse in the media, and where discussions have been pushed into this week. While the risks around this are well-rehearsed it could be argued that the risks appear somewhat overstated given how regularly we’ve seen this scenario play out over the last few years on a regular ‘rinse and repeat’ basis before a late compromise is sealed.” <Michael Hewson, analyst at broker CMC Markets, Barron’s>

Economic Data Docket: May data for the Empire State Index, which will show how New York State manufacturers feel about the economy. Economists are expecting a reading of 1.0, which would be lower than the 10.8 level in a previous data.

 

Friday (5/12) … RegMed Investors’ (RMi) closing bell: “sector sentiment and conviction dampened by economic/inflation headwinds. Conviction is weighted to the downside in today’s sector as so many uncertainties inhabit sentiment while being surrounded by the tightening U.S. debt ceiling and Fed monetary policy time frame.” … https://www.regmedinvestors.com/articles/12957

 

Ebb and flow:

Q2/23 – May – 4 negative and 6 positive closes

·         April ended - 1 holiday, 8 positive close and 11 negative closes

Q1/23 –

·         March – ended with 10 positive and 13 negative closes

·         February – 1 holiday, 2 vacation, 7 negative and 8 positive closes

·         January – 2 holidays, 11 positive and 9 negative closes

 

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

Negative Indications:

Friday’s closing price, aftermarket dollar ($) and cent ($0.00) value and percentage (%)

Intellia Therapeutics (NTLA) closed down -$1.29 with a negative -$0.33 or -0.76% pre-open indication.

 

Positive Indications:

Friday’s closing price, aftermarket dollar ($) and cent ($0.00) value and percentage (%)

Compass Therapeutics (CMPX) closed down -$0.045 with a positive +$0.38 or +1.52% aftermarket indication.

uniQure NV (QURE) closed down -$0.27 or -0.825 pre-open indication.

 

The BOTTOM LINE: I try to keep it simple and short!

I follow the dictum, quoting Churchill that “short words are best, and the old words when short are best of all.”

“Sideways action is far more dangerous than a bear market because it lures investors in. The stock market rally showed mixed action last week. Also, not many stocks have been offering buy signals, and some of those have quickly wobbled. A choppy market rally is dangerous for investors. It's still a time to be mostly in cash.” <IBD>

What changes, certainly not : “sector divergence, weak breadth and many equities falling remain an issue.”

As I stated, I wouldn’t buy into ANY rally during earnings reporting season, I’d be selling and I have been RIGHT.

This week’s special, sector earnings continue rolling out … just one (1) NET INCOME to date yet, 31 net losses.

The cell and gene therapy sector could experience yet another the “flight of Icarus” …  since “our” universe have oscillated between gains and losses since the first of 2023!

Reiterating, “More frequently right than consequentially wrong … “The rubber is hitting the road, so those companies have to do quite well to justify it.” What is the “it” – as LPS (loss-per-share) numbers facilitate downslides.”

Investors should STILL be hesitant to add to positions re concerns of electronic trading i.e., algorithms seem to be the only ones leading any upside – go with flow.

I also hate to be so negative or contrarian but, this is a NO spin zone and truth is its product; I can always be WRONG but, I am mostly EARLY!

At ANY time, this week, be ready to take partial profits and exit losers.

 

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.

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 securities referred to in this publication.