November 16, 2023 4:41pm
Facts versus reality … I suggest that it is better to keep your finger on the sell button but, still keep a buy ticket in the other hand!
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After careful examination of the sector and breathe trends, I have come away more cautious. Having lived through the rise and multiple declines of “our” universe’s stock price, investors must be better informed on what fluctuating economics and markets can do to an equity, or what impact indications or expectations can have.
News: Homology Medicines (FIXX -$0.30 or -34.27% to $0.57) enters into merger agreement and financing with Q32 Bio Inc. in an all-stock transaction … https://www.regmedinvestors.com/articles/13210
The Dow closed DOWN -45.74 points or -0.13%, the S&P closed UP +5.36 points or +0.12% while the Nasdaq closed UP +9.84 points or +0.07%
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 were mixed on Thursday, as investors took a pause from the November rally …
Better-than-expected inflation data has boosted stocks this month. With November about halfway through, the S&P 500 is up more than 7% for the month, while the Dow has advanced more than 5%. The Nasdaq has leapt over 9% in the period. <CNBC>
Economic Data Docket: Initial jobless claims clocking in higher than expected is good news for the Federal Reserve, but the stock market wasn’t so excited, especially after surging in recent weeks.
… For the week ended Nov. 11 claims came in at 231,000 vs. estimates for 222,000. That topped the prior week's revised 218,000.
- The Philadelphia Fed Manufacturing index came in at a better-than-expected -5.9 vs. the -11.00 forecast for November, according to Econoday. The reading was an improvement over October's -9.0, but a reading below zero still indicates deteriorating conditions. The metric measures regional business activity.
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Thursday’s advance/decline line was positive with 23 incliners, 11 decliners and 1 flat at the open, the mid-day flipped negative with 4 inclined, 28 decliners and 3 flats, ending with a negative close of 10 incliners, 25 decliners and 0 flat
Ebb and flow:
Q4: November – 6 positive and 6 negative 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 down -0.85% and the XBI was down -1.37%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Thursday was down -0.01 point or -0.07% at 14.17
Closing Down (10 of 25):
- Alnylam Pharmaceuticals (ALNY -$2.08 after Wednesday’s +$1.06, Tuesday’s +$4.98 and Monday’s +$3.12
- Ionis Pharmaceuticals (IONS -$1.23 after Wednesday’s +$0.62, Tuesday’s +$2.11 and Monday’s +$0.58)
- Blueprint Medicine (BPMC -$1.05 after Wednesday’s -$1.06, and Tuesday’s +$5.87),
- Sage Therapeutics (SAGE -$0.63 after Wednesday’s -$0.08, Tuesday’s +$1.98 and Monday’s +$0.21)
- Intellia Therapeutics (NTLA -$0.56),
- Verve Therapeutics (VERV -$0.51 after Wednesday’s +$0.72, Tuesday’s +$1.48 and Monday’s -$6,41),
- Vericel (VCEL -$0.47 after Wednesday’s -$0.70, Tuesday’s +$2.80 after Monday’s +$0.04),
- BioLife Solutions (BLFS -$0.38 after Wednesday’s +$0.45),
- Prime Medicine (PRME -$0.37 after Wednesday’s -$0.55),
- Beam Therapeutics (BEAM -$0.36 after Wednesday’s +$0.60, Tuesday’s +$2.61 and Monday’s -$0.22),
Closing Up (10 of 10):
- CRISPR Therapeutics (CRSP +$2.99 after Wednesday’s +$0.93, Tuesday’s +$3.29 and Monday’s -$1.15),
- Harvard Apparatus GN (HRGN +$0.13 after Wednesday’s $0.00, Tuesday’s -$0.17 and Monday’s $0.00)
- MiMedx (MDXG +$0.10 after Wednesday’s -$0.09),
- Precigen (PGEN +$0.09),
- Caribou Biosciences (CRBU +$0.06 after Wednesday’s +$0.45),
- AxoGen (AXGN +$0.04),
- Compass Therapeutics (CMPX +$0.02 after Wednesday’s -$0.05),
- Bellicum Pharmaceuticals (BLCM +$0.0124),
- Adverum Biotechnologies (ADVM +$0.0092),
- Graphite bio (GRPH +$0.0050 after Wednesday’s -$0.08)
Q4/23 – November
- Thursday closed negative with 10 incliners, 25 decliners and 0 flat
The BOTTOM LINE: Add to and keep portfolio powder dry … the stock market held onto losses on Thursday with the major indexes mixed.
Reiterating, something to think about … “An ominous 'death cross' has spooked traders and sparked fears the stock market could be headed for a major drop despite positive movement in the market.”
- The last time it appeared was March 2022, when the markets plunged a massive 12% over six months. It was noted on the Dow on Monday, the day before the markets saw their strongest performance since April - hitting their highest close since September 14 after being buoyed by the Labor Department's latest inflation figures. <Daily Mail>
- A 'death cross' is when the 50-day moving average of an index drops below the 200-day average - indicating momentum is weakening. A moving average is the average range of prices of an asset over a given period of time. <Investopedia>
- Meanwhile, small caps on the Russell 2000 were still feeling the love from Tuesday, as they added 0.3%. Coupled with Tuesday's gains, the index has cleared both its 50-day moving average and 100-day line. The index tried to crack 200-day line earlier in the session but pulled back.
A quote, “Upside risks to inflation and downside risk to growth mean the risk-positive data flow is unlikely to last through 2024, but it's not clear there will be sufficient data to refute the happy, if probably unsustainable, narrative before the end of the year." <analysts at Citi>
- Short positioning and leveraged trading in hedge funds percentage (%) is the highest since November 2018 …Regulators are particularly concerned about one strategy called the basis trade, which involves using leverage to profit from the price gap between Treasury futures and the underlying cash market. It has garnered particular attention from federal watchdogs over concerns about a lack of visibility into the amount of risk in the market.
- 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:
- Volume fell on the Nasdaq compared with Wednesday.
- Oil prices slumped almost $4 a barrel, with U.S. crude sliding 5% to $72.84 per barrel and Brent was at $77.32, down 4.8% on the day.
- Market and sector expectations have become more questionable …
- The sector and overall stock market tends to consistently rise and fall over the short-term with alternating volatility and involuntary momentum contractions.
Welcome to my world of defining the “grey’ in our universe!
- I believe … there will be deceleration in sector pricing gains and economic activity for the remaining weeks of 2023.
The top three (3) performing in the session:
- Thursday: CRISPR Therapeutics (CRSP) -3x, Harvard Apparatus GN (HRGN) and MiMedx (MDXG)
- Wednesday: Alnylam Pharmaceuticals (ALNY), CRISPR Therapeutics (CRSP) and Ultragenyx Pharmaceuticals (RARE)
- Tuesday: Blueprint Medicine (BPMC), Alnylam Pharmaceuticals (ALNY) and CRISPR Therapeutics (CRSP)
- Monday: Alnylam Pharmaceuticals (ALNY), Ultragenyx Pharmaceuticals (RARE) and Ionis Pharmaceuticals (IONS)
The worst three (3) in the session:
- Thursday: Alnylam Pharmaceuticals (ALNY), Ionis Pharmaceuticals (IONS) and Blueprint Medicine (BPMC),
- Wednesday: Blueprint Medicine (BPMC), Prime Medicine (PRME) and Vericel (VCEL)
- Tuesday: Harvard Apparatus GN (HRGN), Mesoblast (MESO) and Adverum Biotechnologies (ADVM),
- Monday: Verve Therapeutics (VERV), CRISPR Therapeutics (CRSP) and Intellia Therapeutics (BEAM)
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!”
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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