November 2, 2023 4:53pm
As investors bet the Fed is close to wrapping up its rate-hiking campaign and assessed a fresh stream of corporate results – that’s a bet I won’t take!
Pre-open Indications: 4 Hits < Cellectis SA (CLLS +$0.37), CRISPR Therapeutics (CRSP +$2.43), Intellia Therapeutics (NTLA +$0.98), Ionis Pharmaceutica’s (IONS -$1.53)> 0 Miss
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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 UP +564.50 points or +1.70%, the S&P closed UP +79.82 points or +1.82% while the Nasdaq closed UP +232.72 points or +1.78%
Q3 earnings’ reporting cycle is here 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 up on a market bet the Fed could be done raising rates for 2023.
Data released showed easing inflation and a slowing labor market. Labor costs unexpectedly dropped in Q3, as weekly jobless claims ticked higher to 217,000.
The Cboe Volatility Index (VIX) fear gauge — traded as low as 15.61 on Thursday, a level not seen in weeks.
Economic Data Docket: Around 217,000 people filed for new benefit applications over the period ending on October 28, a 5,000 increase from the prior total, taking the four-week average to around 210,000.
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Thursday’s advance/decline line opened positive at 26 up/ 6 down and 3 flats, stayed positive with 23 incliners, 10 decliners and 2 flats at the mid-day, ending with a positive close of 23 incliners, 9 decliners and 3 flats
Ebb and flow:
Q4: November – 2 positive closes
· October – 12 negative and 10 positive closes
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Thursday, the IBB was up +1.40% and the XBI was up +0.98%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Thursday was down -1.22 points or -7.23% at 15.65
Closing Down (9 of 9):
- Ionis Pharmaceuticals IONS -$1.53 after Wednesday’s +$0.99 and Tuesday’s +$0.27),
- Blueprint Medicine (BPMC -$0.50 after Wednesday’s +$1.04 and Tuesday’s +$4.52),
- Sage Therapeutics (SAGE -$0.14 after Wednesday’s +$0.97),
- Sangamo Therapeutics (SGMO -$0.13),
- Voyager Therapeutics VYGR -$0.10),
- Graphite Bio (GRPH -$0.06),
- uniQure NV QURE -$0.04),
- Brainstorm Cell Therapeutics (BCLI -$0.0017),
- Bellicum Pharmaceuticals (BLCM -$0.0017),
- Harvard Apparatus GN (HRGN $0.00 after Wednesday’s $0.00 after Tuesday’s -$0.06),
- Homology Medicine (FIXX)
- Regenxbio (RGNX)
Closing Up (10 of 23):
- Alnylam Pharmaceuticals (ALNY +$4.53),
- CRISPR Therapeutics CRSP +$2.43 after Wednesday’s +$4.82),
- Verve Therapeutics (VERV +$2.18 after Wednesday’s -$0.29 and Tuesday’s +$2.63),
- Intellia Therapeutics (NTLA +$0.98 after Wednesday’s +$0.45 and Tuesday’s +$1.22),
- BioLife Solutions (BLFS +$0.82),
- Solid BioSciences (SLDB +$0.59),
- Ultragenyx Pharmaceuticals (RARE +$0.56 after Wednesday’s +$0.64 and Tuesday’s +$2.32),
- Vericel (VCEL +$0.53 after Wednesday’s -$0.18 after Tuesday’s +$0.80),
- Beam Therapeutics (BEAM +$0.40 after Wednesday’s -$0.10),
- Cellectis SA (CLLS +$0.37 after Wednesday’s +$1.67 and Tuesday’s -$0.0452),
Q4/23 – November
- Thursday closed positive with 23 incliners, 9 decliners and 3 flat
- Wednesday closed positive with 18 incliners, 16 decliners and 1 flat
The BOTTOM LINE: The cell and gene therapy sector has seen a rebound after Thursday and Wednesday — the first and second trading days in November — kicking off an often historically strong month for the market.
- After all three major gauges closed with gains after the Fed held interest rates steady at their highest range in 22 years.
- Attention is now turning to earnings season …
- While, U.S. non-farm payrolls data is due out on Friday. A tight labor market is considered a key factor in the outlook for interest rates.
Roiling markets: If you're buying on weakness, you might be jumping onto a sinking ship even as …
- More earnings are coming around the bend
- Up and down market and past cell and gene therapy activity is reflective of investors sentiment – how can we be happy?
- 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:
- Markets are convinced the Fed has ended its historic tightening cycle, with the biggest bets now focused on a rate cut in June.
- Benchmark 10-year notes yields tumbled in the wake of the Fed decision and Powell's press conference, falling 15 basis points for the biggest single-day decline since March.
- 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:
- Thursday: Alnylam Pharmaceuticals (ALNY) – 2x, CRISPR Therapeutics CRSP) and Verve Therapeutics (VERV)
- Wednesday: Alnylam Pharmaceuticals (ALNY), CRISPR Therapeutics CRSP) and Cellectis SA (CLLS)
- Tuesday: Blueprint Medicine (BPMC), Verve Therapeutics (VERV) and Ultragenyx Pharmaceuticals (RARE)
- Monday: not recorded
The worst three (3) in the session:
- Thursday: Ionis Pharmaceuticals (IONS), Blueprint Medicine (BPMC) and Sage Therapeutics (SAGE)
- Wednesday: Verve Therapeutics (VERV), Vericel (VCEL) and AxoGen (AXGN)
- Tuesday: Regenxbio (RGNX), Harvard Apparatus GN (HRGN) and Cellectis SA (CLLS)
- Monday: not recorded
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.