November 20, 2023 4:48pm
Short week became even shorter <for me> to enjoy a few sessions without thinking
Pre-Open Indications: 3 Hits (CRISPR Therapeutics (CRSP +$4.29), Alnylam Pharmaceuticals (ALNY +$1.53), Beam Therapeutics (BEAM +$3.29) and 0 Miss
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After careful examination of the sector and breathe trends, I STILL 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.
"I consider that a man’s brain originally is like a little empty attic, and you have to stock it with such furniture as you choose. A fool takes in all the lumber of every sort that he comes across so that the knowledge that might be useful to him gets crowded out, or at best is jumbled up with a lot of other things so that he has difficulty in laying his hands." — Sherlock Holmes, A Study in Scarlett
The Dow closed UP +203.76 points or +0.58%, the S&P closed UP +33.36 points or +0.74% while the Nasdaq closed UP +159.05 points or +1.13%
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 jumped Monday to start a holiday shortened week …
This is traditionally a very light week.
U.S. markets will be closed Thursday due to the Thanksgiving holiday. Friday will also be a shortened trading day. Trading around the Thanksgiving holiday has been choppy in recent years, but November is still the best-performing month for the S&P 500, according to the Stock Traders’ Almanac.
Economic Data Docket: The Fed is expected to issue minutes of its November meeting on Tuesday, which will be parsed for clues on the direction of U.S. interest rates.
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Monday’s advance/decline line was positive with 27 incliners, 7 decliners and 1 flat at the open, the mid-day continued positive with 26 declined, 8 incliners and 1 flat, ending with a positive close of 30 incliners, 5 decliners and 0 flat
Ebb and flow:
Q4: November – 8 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:
- Monday, the IBB was up +0.69% and the XBI was up +1.17%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Monday was down -0.38 point or -2.75% at 13.42
Closing Down (5 of 5):
- Solid Biosciences (SLDB -$0.19 after Friday’s -$0.15),
- Ultragenyx Pharmaceuticals (RARE -$0.62 after Friday’s +$1.02),
- Harvard Apparatus GN (HRGN -$0.07 after Friday’s -$0.08),
- Mesoblast (MESO -$0.02 after Friday’s -$0.08),
- Homology Medicine (FIXX -$0.0056 after Friday’s -$0.0119),
Closing Up (10 of 30):
- CRISPR Therapeutics (CRSP +$4.29 after Friday’s +$8.67),
- Beam Therapeutics (BEAM +$3.29 after Friday’s +$2.68),
- Blueprint Medicine (BPMC +$2.22 after Friday’s +$1.04),
- Intellia Therapeutics (NTLA +$2.16 after Friday’s +$2.10),
- Alnylam Pharmaceuticals (ALNY +$1.53 after Friday’s -$5.24
- Editas Medicine (EDIT +$1.06),
- Ionis Pharmaceuticals (IONS +$0.70),
- BioLife Solutions (BLFS +$0.64 after Friday’s +$0.81),
- Verve Therapeutics (VERV +$0.63 after Friday’s +$0.75),
- Sage Therapeutics (SAGE +$0.56),
Q4/23 – November
- Monday closed positive with 30 incliners, 5 decliners and 0 flat
The BOTTOM LINE: I believe, “market and sector expectations have become more questionable as to inevitability and uncertainty …
- The latest inflation data provided investors with a questionable narrative about the economy as it may Not last long - just count the escalating costs of a turkey dinner and its trappings.
- As “uncle algo and his electronic dwarfs” bid the upside for the sector to become overbought in the next weeks … ripening for a profit binge
- ENJOY the upside but SLASH some of your higher appreciators in your cell and gene therapy sector and be prepared for overbought “conditions” which will be profiteered.
- 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 continues to weigh on the market as investors assess the strident turn of media and protesting agitators who are also compromising elected officials especially in the democratic party by “progressives”!!
- The rising geopolitical tensions in the Middle East could drive a global recession, leading investors have warned.
Coming Attraction: A wave of retailers will report results on Tuesday, but no report will be bigger for the market
A Bad: Bristol Myers (BMY) fell -$1.94 or -3.82% to $48.90) as Germany's Bayer (BAYN, BE -$7.32 or -17.58 to $34.32) on Sunday stopped a late-stage trial testing a new anti-clotting drug, hurting investor confidence in all firms developing similar class of drugs.
The three major stock indexes have risen for three-straight weeks as investors increasingly bet the Federal Reserve is done raising interest rates, especially after the October consumer price index came in cooler than expected. Bond yields have also retreated, which has benefitted rate-sensitive stocks. The seasonal rally continues,” The positive momentum continues, and unless there are pointed problems with holiday spending, should be self-fulfilling into the year end.” < Navellier & Associates Louis Navelleir>
What’s behind the numbers:
- Traders have nearly fully priced in the likelihood that the Fed will keep interest rates unchanged in December, and have started pricing in rate cuts as soon as March. <CME Group'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 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:
- Monday: CRISPR Therapeutics (CRSP), Beam Therapeutics (BEAM) and Blueprint Medicine (BPMC)
The worst three (3) in the session:
- Monday: Ultragenyx Pharmaceuticals (RARE), Solid BioSciences (SLDB) and Harvard Apparatus GN (HRGN)
Right up front, “I also hate to be so negative or contrarian but, this is a NO spin zone and facts are 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.
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.