May 30, 2023 7:44am

Challenges ahead to the acceptance and final ratification of the debt ceiling “deal.” Many right and left-wing lawmakers will oppose the legislation, so congressional leaders and the White House are pushing the rank-and-file hard to secure passage. A House vote is expected Wednesday, with the Senate acting soon anticipating a rocky road as even Senator Lindsey Graham and presidential candidate DeSantis knock the “deal”.

Pre-open Indications: 4 Sell into Strength

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!  Never leave an investor uninformed! 

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 DOWN -0.09% or (-31 points), S&P futures are UP +0.43% or (+18 point) and NASDAQ futures are UP +1.11% or (+169 points) early in the pre-open – so far

Stock futures rose Tuesday,

European stock markets were flat,

Asia Pacific markets trade mixed.

 

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 …

U.S. stock markets were closed Monday in observance of the Memorial Day holiday.

Friday (reported Saturday) - The Dow climbed 328.69 points, or 1% to settle at 33,093.34. The S&P 500 gained 1.3% to close at 4,205.45, and the Nasdaq advanced 2.2% to 12,975.69.

“New data out Friday morning showed inflation rose more than expected in April. The personal consumption expenditures index, the Fed’s preferred gauge of price pressures, increased 0.4% last month and 4.7% from a year earlier.” <CNBC>

Markets raised their bets for a June rate hike from the Federal Reserve following hotter-than-expected inflation data. Odds for a quarter percentage point increase jumped to 56%, according to CME Group data.

Economic Data Docket: The final reading on May consumer sentiment was slightly above expectations. The University of Michigan’s consumer sentiment index came in at 59.2, while economists polled by Dow Jones had forecast a reading of 57.7 - that level is well below April’s 63.5. “Consumer sentiment slid 7% amid worries about the path of the economy, erasing nearly half of the gains achieved after the all-time historic low from last June. This decline mirrors the 2011 debt ceiling crisis, during which sentiment also plunged,” Surveys of Consumers director Joanne Hsu wrote.

 

Saturday (5/27) … RegMed Investors’ (RMi) closing bell: “merry-go-round or roller coaster, volatility adds to liquidity issues as algorithms dumped into the downside movement. Stay “frosty,” debt ceiling negotiations have weighed on market sentiment this week; what about next week if NO deal? I am concerned Dems reuse to budge with a lack of accord!” … https://www.regmedinvestors.com/articles/12978

 

Ebb and flow:

Q2/23 – 

·         May – 8 negative and 12 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

Until a debt ceiling is voted and approved – a risky week continues as debt ceiling throws share pricing to the airstreams – “wind sock wanted; although a few sells into strength” …

Sell into Strength:

Blueprint Medicine (BPMC) closed up +$3.47 with a positive +0.81 or +1.40% aftermarket indication

Mesoblast (MESO) closed up =$0.18 with a negative -$0.08 or -2.20% pre-open indication,

Sage Therapeutics (SAGE) closed up +$1.08 with a flat aftermarket indication

Vericel VCEL) closed up +$0.48 with a flat aftermarket indication

 

The BOTTOM LINE:

I follow the dictum, quoting Churchill that “short words are best, and the old words when short are best of all, as I try to keep it simple and short!

Quoting again, “Debt-ceiling negotiations are a lose-lose for equity investors at this point, as a failure to strike a deal will lead to an immediate recession, while a deal will strain liquidity from markets as the US Treasury issues trillions in new bonds, which are newly born.” <Jose Torres, Interactive Brokers>

After a sour day in Washington and markets, CNBC’s Jim Cramer warned investors that lawmakers will inevitably cost them money as debt ceiling negotiations drag on. “Get ready for our politicians to lose you some more money,” Cramer said, referencing the earlier impasse surrounding the debt ceiling in 2011. “They hurt you then. They aren’t done hurting you now. But unless you trade full time it’s very hard to get out and get back in early enough for it to make a difference, which means most of us need to take the pain.”

It ain’t over … I believe the debt ceiling will NOT be solved without “blood on the streets”

As I have stated, “The cell and gene therapy sector WILL experience yet another “flight of Icarus” …  since “our” universe has oscillated between gains and losses since the first of 2023!”

There is VALUE out there however, it’s I would be selling into this upside!”

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.

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 securities referred to in this publication.