October 17, 2023 4:46pm
For investors and traders to sift through as good news about the economy is once again bad news as the Fed straddles the fence on delivering more tightening while sector earnings season dates are about to be released and real sentiment is a glass half-full and still being sipped
News: Ultragenyx Pharmaceutical (RARE -$0.19 and -$0.91 aftermarket) has commenced an underwritten public offering of up to $300 M. RARE is expected to grant the underwriters of the offering an option for a period of 30 days to purchase up to an additional $45,000,000 of shares.
Subscription is coming, it is not conscription but, an offer to join our collective of like-minded investors! Join me … in the NO spin zone.
The bond market sems to be driving the stock market
Never leave an investor uninformed!
The Dow closed UP +13.11 points or +0.04%, the S&P closed DOWN -0.43 points or -0.01% while the Nasdaq closed DOWN -34.24 points or -0.25%
What’s SAFE … “No one company is immune in the sector and this market of rolling downdrafts? Welcome to my world of defining the “grey’ in our universe!”
Investors are going to need to prepare for another reporting cycle to confirm whether or not a bottom is even close to happening.
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 …
Indexes were mixed and the Nasdaq and S&P declined on Tuesday after retail sales data smashed expectations and earnings season picked up steam.
Rising yields have pressured the broader market in recent weeks as traders assess the prospects of tighter Federal Reserve policy for longer than expected. Investors have also considered the potential impact from the Israel-Hamas war on the global economy.
Economic Data Docket: In another sign of U.S. economic resiliency, retail sales rose 0.7%; economists expected a 0.3% increase. Excluding autos, sales increased by 0.6%. That was also above expectations.
- The unrevised September figure compares with preliminary August numbers that showed an increase of 0.6%. That August figure later was revised to 0.8%, which suggests consumer spending remains high and could portend a bigger revision for September.
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Tuesday’s advance/decline line opened positive at 19 up/ 13 down and 3 flats, staying positive with 20 incliners, 14 decliners and 1 flat at the mid-day, ending with a barely positive close of 17 incliners, 16 decliners and 2 flats
- Monday’s advance/decline line opened negative at 9 up/ 25 down and 1 flat, flipped positive with 18 up/ 16 down and 1 flat at the mid-day, ending with a positive close of 21 incliners, 14 decliners and 0 flat
Ebb and flow:
Q4: October – 6 negative and 6 positive closes
· Q3: September – 1 holiday, 8 positive and 12 negative closes
· August – 9 positive and 14 negative closes
· July - 1 holiday, 12 positive and 8 negative close
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Tuesday, the IBB was down -0.13% and the XBI was up +0.13%
- Monday, the IBB was up +0.55% and the XBI was up +0.83%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Tuesday was up +0.67 points or +3.89% at 17.88
- Monday was down -2.04 point or -10.56% at 17.28
Closing Down (10 of 16):
- Alnylam Pharmaceuticals (ALNY -$1.27 after Monday’s -$0.87),
- CRISPR Therapeutics (CRSP -$1.15 after Monday’s +$0.50),
- Intellia Therapeutics (NTLA -$0.58 after Monday’s -$0.20),
- Editas Medicine (EDIT -$0.45 after Monday’s +$0.21),
- Ultragenyx Pharmaceuticals (RARE -$0.19 after Monday’s +$3.45),
- Generation Bio (GBIO -$0.14),
- Graphite Bio (GRPH -$0.05),
- Mesoblast (MESO -$0.05),
- uniQure NV (QURE -$ after Monday’s -$0.15),
- Verve Therapeutics (VERV -$0.05 after Monday’s -$0.13),
- BioLife Solutions (BLFS $0.00 after Monday’s +$0.34),
- Homology Medicine (FIXX $0.00 after Monday’s -$0.06),
Closing Up (10 of 17):
- Blueprint Medicine (BPMC +$2.26 after Monday’s +$0.52),
- Vericel (VCEL +$2.11 after Monday’s +$2.00),
- Prime Medicine (PRME +$0.70 after Monday’s -$0.11),
- Harvard Apparatus GN (HRGN +$0.47 after Monday’s -$0.39),
- Ionis Pharmaceuticals (IONS +$0.37 after Monday’s +$0.16),
- Regenxbio (RGNX +$0.26 after Monday’s +$0.16),
- Fate Therapeutics (FATE +$0.25),
- MiMedx (MDXG +$0.20),
- Solid Biosciences (SLDB +$0.16 after Monday’s -$0.08),
- bluebird bio (BLUE +$0.11 after Monday’s +$0.14)
Q4/23 – October
- Tuesday closed positive with 17 incliners, 16 decliners and 2 flats
- Monday (10/16) closed positive with 21 incliners, 14 decliners and 0 flat
The BOTTOM LINE: Don’t be afraid of rotations and corrections; don’t be intimidated by people who use the words,” he said. “And remember, even though it’s hard to quantify, execution is as crucial factor when it comes to picking stocks—you want companies with proven, seasoned management teams that are less likely to drop the ball.”
- From Monday, “Our” universe’s trend remains " in a constant correction." That means that investors will be safer on the sidelines as again … earnings are coming.
- Middle East conflict still weighed on the market as investors assessed the chances of it breaking out into a wider war. The rising geopolitical tensions in the Middle East could drive a global recession, leading investors have warned.
- Plans for President Biden to visit Israel on Wednesday, hotter-than-expected retail sales, and a gauntlet of earnings reports were among the major headlines commanding investor attention.
- I STILL believe the political aspect of the country’s polarization, and disparities of the debt ceilings and rate hike arguments are contributing to the roller coaster ride for share pricing actions.
A quote of interest, “As more economic data rolls in, investors will be paying attention to any clues that may hint to the Fed's next moves. While 92% of traders anticipate that the central bank will hike interest rates in November, 29.5% expect another 25-basis point rate increase in November.” <Barron’s>
The cell and gene therapy sector equities share pricing inclined on Tuesday and Monday
- After ascending on Friday while Thursday DIVED after Wednesday’s decline
- After popping on Tuesday following the previous Monday’s declines.
Consider: Implied volatility shows how much movement the market is expecting in the future.
- Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other.
- It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.
What’s behind the numbers:
- I remain cautious as upcoming earnings may have a more significant negative impact on share price due to missed consensus and estimates will lessen valuations.
- Valuation suggests the market is skating on very thin ice while the charts and data have yet to generate signals of a correction low. Thus, we believe risk is high as we enter earnings season.
- The small-cap Russell 2000 defied the other indexes by rising 1.5%. But that index's 50-day line crossed below its 200-day line last week in what is commonly known as a death cross.
- Volume on the was lower on the Nasdaq exchange compared with the same time on Monday.
- Welcome to my world of defining the “grey’ in our universe!
Some good news that was almost bad … Johnson & Johnson (JNJ) pared some early losses after reporting Q3 results as it beat analyst views. Sales grew 6.8% while earnings per share showed a 19.3% increase. JNJ also raised its midpoint sales and earnings outlook for Q4.
The top three (3) performing in the session:
- Tuesday: Blueprint Medicine (BPMC), Vericel (VCEL) and Prime Medicine (PRME)
- Monday: Ultragenyx Pharmaceuticals (RARE), Vericel (VCEL) and BioLife Solutions (BLFS)
The worst three (3) in the session:
- Tuesday: Alnylam Pharmaceuticals (ALNY) – 2x, CRISPR Therapeutics (CRSP) and Intellia therapeutics (NTLA)
- Monday: Alnylam Pharmaceuticals (ALNY), Blueprint Medicine (BPMC) and Harvard Apparatus RN (HRGN) -2x,
Right up front, “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!”
- Focus should be on the upcoming quarterly earnings season!
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.