October 25, 2023 5:18pm
Is volatility giving investors 'false sense of security' as investors can’t take its eyes off the bond market
Pre-open Indications: 3 Hits and 2 Miss
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The Dow closed DOWN -105.45 points or -0.32%, the S&P closed DOWN -60.91 points or -1.43% while the Nasdaq closed DOWN -318.65 points or -2.43%
Investors are going to need to prepare for another earnings’ 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 fell as each of 3 fell …
The Nasdaq dropped more than 2.3% during Wednesday’s session, putting the tech-heavy index within close range of its 200-day moving average at 12,766.693 and on pace for its worst day since February.
Economic Data Docket: new home sales in the U.S. rose much more than expected. Sales in September came in at 759,000, well above the August number of 675,000. That figure also exceeded an estimate of 680,000.
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Wednesday’s advance/decline line opened negative at 7 up/ 28 down and 1 flat, stayed negative with 7 incliners, 27 decliners and 1 flat at the mid-day, ending with a negative close of 8 incliners, 26 decliners and 1 flat
Pre-open Indications: 3 Hits < Vericel (VCEL -$1.09), CRISPR Therapeutics (CRSP -$2.33), Editas Medicine (EDIT -$0.05)> and 2 Miss < Beam Therapeutics (BEAM -$0.19), Verve Therapeutics (VERV -$0.21)>
- IBB at 114.70
- Prime Medicine (PRME) at $6.04
- Solid Biosciences (SLDB) at $2.02
- Sangamo Therapeutics (SGMO) at $0.47
- Generation Bio (GBIO) at $0.91
- Intellia therapeutics (NTLA) at $25.57
Ebb and flow:
Q4: October – 11 negative and 7 positive closes
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Wednesday, the IBB was down -1.91% and the XBI was down -2.38%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Wednesday was up +1.27 points or +6.69% at 20.24
Closing Down (10 of 26):
- Alnylam Pharmaceuticals (ALNY -$4.47 after Tuesday’s +$1.96 and Monday’s +$0.21),
- CRISPR Therapeutics (CRSP -$2.33 after Tuesday’s +$1.41 and Monday’s +$1.48),
- Blueprint Medicine (BPMC -$2.27 after Tuesday’s +$2.08 and Monday’s -$2.07),
- Intellia therapeutics (NTLA -$2.26),
- Ions Pharmaceuticals (IONS -$1.91 after Tuesday’s +$0.49 and Monday’s -$0.37),
- Vericel (VCEL -$1.09 after Tuesday’s +$1.91 and Monday’s +$0.33),
- Sage Therapeutics (SAGE -$0.81 after Tuesday’s +$0.74),
- Prime Medicine (PRME -$0.72 after Tuesday’s -$0.14),
- uniQure NV (QURE -$0.35),
- Regenxbio (RGNX -$0.34 after Tuesday’s +$0.34 and Monday’s -$0.59),
- Homology Medicine (FIXX $0.00 after Tuesday’s $0.00)
Closing Up (8 of 8):
- Ultragenyx Pharmaceuticals (RARE +$0.65),
- Harvard Apparatus GN (HRGN +$0.11 after Tuesday’s +$0.38 and Monday’s -$0.59),
- Editas Medicine (EDIT +$0.05),
- Adverum Biotechnologies (ADVM +$0.03 after Tuesday’s -$0.0335 and Monday’s +$0.0332),
- Agenus (AGEN +$0.0233 after Tuesday’s -$0.12 and Monday’s -$0.03),
- Mesoblast MESO +$0.02 after Tuesday’s -$0.03 and Monday’s +$0.09),
- BrainStorm Cell Therapeutics (BCLI +$0.0057 after Tuesday’s -$0.0139),
- Generation Bio (GBIO +$0.0001)
Q4/23 – October
- Wednesday closed negative with 8 incliners, 26 decliners and 1 flat
The BOTTOM LINE: after Tuesday’s positive close, a false sense of security …
The Nasdaq dropped -2.5% during Wednesday’s session, putting the index within close range of its 200-day moving average at 12,766.693 and on pace for its worst day since February.
Framing the main takeaway … pricing, volume and machine trading creates volatility and liquidity!
- Wednesday closed negative as the cell and gene therapy sector equities declined (8 incliners/26 decliners and 1 flat)
- Tuesday, cell and gene therapy sector equities advanced (26 incliners/8 decliners and 1 flat)
- Monday’s advance/decline line ended with a positive 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
- Last Wednesday’s advance/decline line ended with a negative close of 5 incliners, 30 decliners and 0 flat
What has changed: “Geopolitics and politics continue to hang over the market’s head, but it’s hard to know which way they will break. We would continue to play defense within both equities and fixed income, while waiting for a better opportunity to add risk."<Sameer Samana, senior global market strategist at Wells Fargo Investment Institute>
- Treasuries held onto a bounce-back after the 10-year yield breached 5% on Monday. The 10-year note last yielded 4.942%, up 10.2 basis points.
- Interest rate on the most popular U.S. home loan last week jumped to the highest since September 2000 - 7.9% - driving mortgage applications to a 28-year low.
- 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.
What’s behind the numbers:
- 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.
Welcome to my world of defining the “grey’ in our universe!
The top three (3) performing in the session:
- Wednesday: Ultragenyx Pharmaceuticals (RARE), Harvard Apparatus RN (HRGN) and Editas Medicine (EDIT)
- Tuesday: Alnylam Pharmaceuticals (ALNY), Vericel (VCEL) and Blueprint Medicine (BLMC)
- Monday: CRISPR Therapeutics (CRSP), Beam Therapeutics (BEAM) and Vericel (VCEL)
The worst three (3) in the session:
- Wednesday: Alnylam Pharmaceuticals (ALNY), CRISPR Therapeutics (CRSP) and Blueprint Medicine (BLMC)
- Tuesday: Prime Medicine (PRME), Cellectis SA (CLLS) and Agenus (AGEN)
- Monday: Blueprint Medicine (BPMC), Ultragenyx Pharmaceuticals (RARE) and Harvard Apparatus RN (HRGN)
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.