October 23, 2023 4:42pm
A sector of slipping equities as equity markets head lower due to economic slowdown and geopolitical risks
Pre-open Indications: 3 Hits and 5 Miss
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No trending news doesn’t help share pricing but words will only decrease the ante so it can come back
The Dow closed DOWN -190.87 points or -0.58%, the S&P closed DOWN -7.12 points or -0.17% while the Nasdaq closed UP +34.52 points or +0.27%
Investors are going to need to prepare for another reporting cycle to confirm whether or not any bottoms are 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 closed mixed with only the Nasdaq closed up
The rapid rise in yields “should accelerate an already weakening economic picture that is masked by higher rates’” <Canaccord Genuity Group chief market strategist Tony Dwyer>
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Monday’s advance/decline line opened negative at 13 up/ 20 down and 2 flats, stayed negative with 10 up/ 24 down and 1 flat at the mid-day, ending with a negative close of 9 incliners, 26 decliners and 0 flat
Pre-open Indications: 3 Hits < Alnylam Pharmaceuticals (ALNY +$0.21), CRISPR Therapeutics (CRSP +$1.14), Blueprint Medicine (BPMC -$2.07)> and 5 Miss < Agenus (AGEN -$0.01), BioLife Solutions (BLFS -$0.44), Ionis Pharmaceuticals (IONS -$0.37), Verve Therapeutics (VERV -$0.11), Beam Therapeutics (BEAM +$1.41)>
- XBI at 65.90
- IWM at 164.76
- uniQure NV (QURE) at $5.89
- Generation Bio (GBIO) at $1.07
- Cellectis SA (CLLS) at $1.20
- CRISPR Therapeutics (CRSP) at $37.80
- Verve therapeutics (VERV) at $8.80
- Intellia therapeutics (NTLA) at $26.25
- Editas Medicine (EDIT) at $6.20
Ebb and flow:
Q4: October – 10 negative and 6 positive closes
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Monday, the IBB was down -0.98% and the XBI was down -2.27%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Monday was down -1.24 point or -5.71% at 20.48
Closing Down (10 of 26):
- Blueprint Medicine (BPMC -$2.07 after Friday’s +$0.16),
- Ultragenyx Pharmaceuticals (RARE -$1.12 after Friday’s -$0.33),
- Harvard Apparatus GN (HRGN -$0.59 after Friday’s +$0.81),
- Regenxbio (RGNX -$0.59 after Friday’s +$0.25),
- BioLife Solutions (BLFS -$0.44 after Friday’s -$0.99),
- Intellia Therapeutics (NTLA -$0.32 after Friday’s -$0.46),
- Ions Pharmaceuticals IONS -$0.37),
- Fate Therapeutics (FATE -$0.20),
- Intellia Therapeutics (NTLA -$0.32),
- Generation Bio (GBIO -$0.19)
Closing Up (9 of 9):
- CRISPR Therapeutics (CRSP +$1.48 after Friday’s -$1.16),
- Beam Therapeutics (BEAM +$1.41 after Friday’s -$0.67),
- Vericel (VCEL +$0.33 after Friday’s -$0.90),
- Alnylam Pharmaceuticals (ALNY +$0.21 after Friday’s +$1.29),
- Mesoblast MESO +$0.09),
- Adverum Biotechnologies (ADVM +$0.0332 after Friday’s +$0.07),
- Solid Biosciences (SLDB +$0.03),
- bluebird bio (BLUE +$0.02 after Friday’s +$0.08),
- Bellicum Pharmaceuticals (BLCM +$0.0199),
Q4/23 – October
- Monday (10/23) closed negative with 9 incliners, 26 decliners and 0 flat
The BOTTOM LINE: No help is coming from market breadth as the cumulative advance/decline lines remain bearish as well.
- Monday’s advance/decline line ended with a negative close of 9 incliners, 26 decliners and 0 flat
- Friday’s advance/decline line ended with a negative close of 9 incliners, 25 decliners and 1 flat
- Thursday’s advance/decline line ended with a negative close of 5 incliners, 26 decliners and 4 flats
- Wednesday’s advance/decline line ended with a negative close of 5 incliners, 30 decliners and 0 flat
- Tuesday’s advance/decline line ended with a barely positive close of 17 incliners, 16 decliners and 2 flats
- The previous Monday’s advance/decline line ended with a positive close of 21 incliners, 14 decliners and 0 flat
What’s SAFE … No one company is immune in the sector and this market of rolling downdrafts with geopolitical tensions roiling markets.
- Sector stocks ticked higher on Monday as Treasury yields rose and traders looked ahead to the release of corporate earnings from “our’ universe.
- The CBOE Volatility Index, or VIX, spiked to 23.08, though it was down 1.6% to 21.37 shortly after the market opened Monday. The VIX has rallied about 26% in the past five sessions, its longest winning streak since it rose for five-straight days in September. The VIX was recently up 24% in October, though it’s down 73% from its record high of 82.69 around the start of Covid-19 shutdowns in the U.S in March 2020.
- 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.
- I STILL believe the political aspect of the U.S.’s polarization, and disparities of the debt ceilings and rate hike arguments are contributing to the roller coaster ride for share pricing actions.
The cell and gene therapy sector equities share pricing closed negative on Monday, Friday, Thursday and Wednesday following inclines on Tuesday and the previous Monday positive close.
What’s behind the numbers:
- Higher bond yields and the risk of a wider Mideast conflict soured investor sentiment at the start of a week full of major corporate earnings and key inflation data. A gauge of global equity markets fell to an almost seven-month low on the outlook.
- The 10-year Treasury yield hit 5.021% but then pulled back, last trading at 4.835%, signaling the scale of the global bond sell-off.
- The sector and overall stock market tends to consistently rise and fall over the short-term with alternating volatility and involuntary momentum contraction.
- I remain EXTREMELY cautious as upcoming earnings may have a more significant negative impact on share price due to missed consensus as estimates will lessen valuations.
- Valuation suggests the cell and gene therapy sector is skating on very thin ice while the charts and data have YET to generate signals of a correction low. Thus, I believe risk is EVEN high as we enter earnings season.
- The United Auto Workers union announced Monday that it is expanding its strike to include a Stellantis plant in Michigan that produces full-sized Ram pickup trucks. The expansion adds about 6,800 workers to the strike. The additional factory is part of a larger move by the union against the Big 3 of Chrysler-parent Stellantis, Ford and GM. The strike has now been ongoing for more than a month.
Welcome to my world of defining the “grey’ in our universe!
The top three (3) performing in the session:
- Monday: CRISPR Therapeutics (CRSP), Beam Therapeutics (BEAM) and Vericel (VCEL)
- Friday: Alnylam Pharmaceuticals (ALNY), Harvard apparatus GN (HRGN) and Regenxbio (RGNX)
The worst three (3) in the session:
- Monday: Blueprint Medicine (BPMC), Ultragenyx Pharmaceuticals (RARE) and Harvard Apparatus RN (HRGN)
- Friday: CRISPR Therapeutics (CRSP), BioLife Solutions (BLFS) and Vericel (VCEL)
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.
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