October 27, 2023 4:48pm
As Sept PCE data declines, 10-yr Treasury yields little changed, the Fed is expected to keep its funds rate in a range of 5.25%-5.5% i.e., higher for longer next while oil prices rise
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Pre-Open Indications: 4 Hits and 2 Miss
Never leave an investor uninformed!
The week in review and what a journey it has been ...
I also won’t apologize for being a “Devil’s Advocate” challenging views or consensus by building a better or possible case for an explanation of today’s actions
The Dow closed DOWN -366.71 points or -1.12%, the S&P closed DOWN -19.86 points or -0.48% while the Nasdaq closed UP +47.41 points or +0.38%
Q3 earnings’ reporting cycle is here to confirm whether or not any bottoms are even close to happening?
News: FDA staff reviewers asked the regulator's advisory panel to consider the need for additional studies for Vertex Pharmaceuticals (VRTX) and CRISPR Therapeutics (CRSP +$0.35) sickle cell disease gene therapy --it was not clear if the limited donor cells used for assessment were adequate to evaluate the potential safety risks of the therapy.
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 the Nasdaq only popping …
For the week, all three major averages are on track for steep weekly losses; the Dow was down -2% and S&P 500 -2.6% and the Nasdaq -2.8%.
Inflation accelerated in September but consumer spending was even stronger than expected.
Economic Data Docket: The core personal consumption expenditures price index, which the Federal Reserve uses as a key measure of inflation, increased 0.3% for the month, in line with estimate and above the 0.1% level for August.
- Even with the pickup in prices, personal spending kept up and then some, rising 0.7%, which was better than the 0.5% forecast. Personal income rose 0.3%, one-tenth of a percentage point below the estimate.
- Including volatile food and energy prices, the PCE index increased 0.4%. On a year-over-year basis, core PCE increased 3.7%, one-tenth lower than August, while headline PCE was up 3.4%, the same as the prior month.
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Friday’s advance/decline line opened negative at 7 up/ 26 down and 2 flats, stayed negative with 3 incliners, 31 decliners/ 1 flat at the mid-day, ending with a negative close of 4 incliners, 30 decliners and 1 flat
- Thursday’s advance/decline line opened positive at 18 up/ 13 down and 4 flats, stayed positive with 20 incliners, 12 decliners and 3 flats at the mid-day, flipped neutral a 2 p.m. with 17 incliners, 17 decliners and 1 flat, ending with a positive close of 20 incliners, 15 decliners and 0 flat
- 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
- Tuesday’s advance/decline line opened positive at 25 up/ 8 down and 2 flats, stayed positive with 28 incliners, 7 decliners and 0 flat at the mid-day, ending with a positive close of 26 incliners, 8 decliners and 1 flat
- 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: 4 Hits < Blueprint Medicine (BPMC -$0.41), Ionis Pharmaceuticals (IONS -$1.58), Beam Therapeutics (BEAM -$0.97), Ultragenyx Pharmaceuticals (RARE -$1.70)> and 2 Miss < Verve Therapeutics (VERV -$0.66), Sage Therapeutics (SAGE -$0.87)>
- XBI at 64.55
- IBB at 113.35
- Prime Medicine (PRME at $5.81
- Intellia Therapeutics (NTLA) at $23.99
- Solid Biosciences (SLDB) at $1.93
- Caribou Biosciences (CRBU) at $3.74
- Alnylam Pharmaceuticals (ALNY) at $153.68
- uniQure NV (QURE) at $5.67
- Sangamo Therapeutics (SGMO) at $0.47
Ebb and flow:
Q4: October – 12 negative and 8 positive closes
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Friday, the IBB was down -2.29% and the XBI was down -3.11%
- Thursday, the IBB was down -0.05% and the XBI was up +1.04%
- Wednesday, the IBB was down -1.91% and the XBI was down-2.38%
- Tuesday, the IBB was up +1.15% and the XBI was up +2.19%
- Monday, the IBB was down -0.98% and the XBI was down -2.27%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Friday was up +0.54 points or +2.61% at 21.22
- Thursday was up +0.49 points or +2.43% at 20.68
- Wednesday was up +1.27 points or +6.69% at 20.24
- Tuesday was down -1.26 points or -6.19% at 19.11
- Monday was down -1.24 point or -5.71% at 20.48
Closing Down (10 of 30):
- Alnylam Pharmaceuticals (ALNY -$3.90 after Thursday’s -$3.83, Wednesday’s -$4.47, Tuesday’s +$1.96 and Monday’s +$0.21),
- Intellia Therapeutics (NTLA -$1.84 after Thursday’s +$0.62 and Wednesday’s -$2.26),
- Ultragenyx Pharmaceuticals (RARE -$1.70 after Thursday’s +$1.68, Wednesday’s +$0.65),
- Ions Pharmaceuticals (IONS -$1.58 after Thursday’s +$1.26, Wednesday’s -$1.91, Tuesday’s +$0.49 and Monday’s -$0.37),
- Vericel (VCEL -$1.57),
- Regenxbio (RGNX -$0.97 after Thursday’s -$0.22, Wednesday’s -$0.34, Tuesday’s +$0.34 and Monday’s -$0.59),
- Beam Therapeutics (BEAM -$0.97 after Thursday’s +$0.25),
- Sage Therapeutics (SAGE -$0.87 after Thursday’s +$0.29, Wednesday’s -$0.81 and Tuesday’s +$0.74),
- Verve Therapeutics (VERV -$0.66 after Thursday’s +$015),
- Blueprint Medicine (BPMC -$0.41 after Thursday’s +$1.26, Wednesday’s -$2.27 after Tuesday’s +$2.08 and Monday’s -$2.07),
- Mesoblast MESO $0.00 after Thursday’s -$0.06 after Wednesday’s +$0.02, Tuesday’s -$0.03 and Monday’s +$0.09),
Closing Up (4 of 4):
- Harvard Apparatus GN (HRGN +$0.08 after Thursday’s +$0.81, Wednesday’s +$0.11, Tuesday’s +$0.38 and Monday’s -$0.59),
- AxoGen (AXGN +$0.05 after Thursday’s -$0.05),
- MiMedx (MDXG +$0.02),
- Bellicum Pharmaceuticals (BLCM +$0.02),
Q4/23 – October
- Friday closed negative with 4 incliners, 30 decliners and 1 flat
- Thursday closed positive with 20 incliners, 15 decliners and 0 flat
- Wednesday closed negative with 8 incliners, 26 decliners and 1 flat
- Tuesday closed positive with 26 incliners, 8 decliners and 1 flat
- Monday (10/23) closed negative with 9 incliners, 26 decliners and 0 flat
The BOTTOM LINE: sector equites were condemned to a “pink mist” as economic releases spawned a tough week and a Friday negative close as investors digested a hectic week of mixed earnings, and economic data supported a "higher for longer" interest rate scenario.
“It’s hard to square such sequentially good economic growth with such lack luster stock market performance,” said Jamie Cox, Managing Partner at Harris Financial Group. “There is only one clear explanation: investors think ZIRP (Zero Interest Rate Policy) is the only condition which permits the economy to grow, and that is clearly an incorrect assumption.”
Also, "It's a divergent market." <Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut>
- The yield on the 10-year U.S. Treasury, which moves inversely to the price of the debt security and functions as a benchmark for global borrowing costs, was little changed at 4.862% after crossing 5% earlier in the week.
- 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:
- Friday: Blueprint Medicine (BLMC) – 3x, CRISPR Therapeutics (CRSP) -2x and MiMedx (MDXG)
- Thursday: Blueprint Medicine (BLMC) – 2x, Ultragenyx Pharmaceuticals (RARE) – 2x and Ionis Pharmaceuticals (IONS)
- 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:
- Friday: Alnylam Pharmaceuticals (ALNY) -3x, Ultragenyx Pharmaceuticals (RARE) and Vericel (VCEL)
- Thursday: Alnylam Pharmaceuticals (ALNY) -2x, Regenxbio (RGNX) and Voyager Therapeutics (VYGR)
- 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.