November 6, 2023 4:41pm
Cell and gene therapy sector equities dived in Monday’s trading as indexes struggled to build on their best week of 2023
Pre-open Indications: 7 Hits < Ionis Pharmaceuticals (IONS -$0.90), Verve Therapeutics (VERV -$0.60), Sell into Strength: CRISPR Therapeutics (CRSP +$0.59), Intellia Therapeutics (NTLA -$1.10), Vericel (VCEL -$0.71), REGENXBIO (RGNX +$0.46), Adverum Biotechnologies (ADVM +$0.024) > 0 Miss
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The Dow closed UP +34.54 points or +0.10%, the S&P closed UP +7.64 points or +0.18% while the Nasdaq closed UP +40.50 points or +0.30%
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 maintaining “some” momentum …
As indexes are coming off their best week of 2023. The Dow notched its biggest weekly advance since October 2022, while S&P and Nasdaq notched their best weeks since November 2022. Soft monthly jobs report also drove bond yields lower, giving a boost to equities.
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Monday’s advance/decline line was negative with 27 incliners, 8 decliners and 2 flats at the mid-day, ending with a negative close of 8 incliners, 25 decliners and 2 flats
- Sangamo Therapeutics (SGMO) at $0.44
Ebb and flow:
Q4: November – 3 positive and 1 negative closes
· October – 12 negative and 10 positive closes
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Monday, the IBB was down -0.32% and the XBI was down -2.21%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Monday was down -0.02 point or -0.13% at 14.89
Closing Down (10 of 25):
- Beam Therapeutics (BEAM -$1.19),
- Intellia Therapeutics (NTLA -$1.10),
- Blueprint Medicine (BPMC -$1.04),
- Ultragenyx Pharmaceuticals (RARE -$1.04),
- Ionis Pharmaceuticals IONS -$0.90),
- Vericel (VCEL -$0.71),
- Sage Therapeutics (SAGE -$0.68),
- Verve Therapeutics (VERV -$0.60),
- BioLife Solutions (BLFS -$0.37),
- Voyager Therapeutics (VYGR -$0.22),
- Harvard Apparatus RN (HRGN)
- Editas Medicine (EDIT)
Closing Up (8 of 8):
- CRISPR Therapeutics (CRSP +$0.59),
- Caribou Biosciences (CRBU +$0.59),
- Regenxbio (RGNX +$0.46),
- Fate Therapeutics (FATE +$0.12),
- Graphite Bio (GRPH +$0.11),
- Mesoblast (MESO +$0.045),
- Adverum Biotechnologies (ADVM +$0.024),
- Bellicum Pharmaceuticals (BLCM +$0.0044),
Q4/23 – November
- Monday closed negative with 8 incliners, 25 decliners and 2 flats
- Friday closed positive with 28 incliners, 6 decliners and 1 flat
- Thursday closed positive with 23 incliners, 9 decliners and 3 flats
- Wednesday closed positive with 18 incliners, 16 decliners and 1 flat
The BOTTOM LINE: Cell and gene therapy equities are hammered after coming off their best yet short first week of November and 2023.
- The 2nd week ushers in a light period for economic data and company earnings, but seasonal tailwinds could help propel the recovery in stocks.
- The Dow notched its biggest weekly advance since October 2022, while S&P and Nasdaq Composite notched their best weeks since November 2022. Soft monthly jobs report also drove bond yields lower, giving a boost to equities. <CNBC>
- Attention is turning up the viability of earnings season …
A right-on quote; “It's likely that we'll see some profit-taking now that the strong rally has subsided, but the seasonal rally has started with gusto, crude oil, and industrial metals are rising again reflecting improving global demand, and the soft-landing outlook is increasingly the general consensus.” < Navellier & Associates founder Louis Navellier>
Another, "With the US market coming off its best week of the year, the question now is whether this momentum can be sustained. That may come down to whether upcoming economic numbers continue to point in the same direction as last week’s jobs report, which showed the labor market slowed in October." <Chris Larkin, managing director, trading and investing at E*TRADE from Morgan Stanley>
- Yields moved higher, reversing last week’s trend, with the 10-year Treasury yield last up about 10 basis points at 4.66%.
- The combination of slowing jobs growth, solid third earnings prospects and an economy that is still showing resilient health, investors are betting on both a near-term soft landing with the prosect of policy easing over the mid-term. <The Street>
- Reiterating, more earnings are coming around the bend
- Up and down market and past cell and gene therapy activity is reflective of investors sentiment –we be happy as November starts but, as it continues next 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:
- Market expectations that the Fed will hold interest rates steady at its December meeting stand at 90.4%, down from 95.2 on Friday but above the 74.4% a week ago. Expectations for a rate cut of at least 25 basis points have grown to more than 50% at the May 2024 meeting. <CME's FedWatch Tool>
- 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 Nasdaq was on track for its sixth (6) straight session in the green while the S&P 500 and the Dow looked set for their fifth (6th) consecutive session of gains.
- I believe … there will be deceleration in sector pricing gains and economic activity for the next three (3) months also, provided that the Fed has to stay on hold at current levels!
- Although, the CBOE volatility index (VIX) touched a fresh six-week low, reflecting easing investor anxiety.
- Interesting fact, to date the Nasdaq has recorded 46 new highs and 62 new lows.
The top three (3) performing in the session:
- Monday: CRISPR Therapeutics CRSP) – 4x, Caribou Biosciences (CRBU) and Regenxbio (RGNX)
The worst three (3) in the session:
- Monday: Beam Therapeutics (BEAM), Intellia Therapeutics (NTLA) and Blueprint Medicine (BPMC)
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!
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