February 14, 2024 7:27am

A double-edged sword for investors; with warning signals of LPS (loss-per-share) mania

Pre-open Indications: 3 Positive Indications

Earnings’ reporting: Sage Therapeutics (SAGE) with Blueprint Medicine (BPMC)

News: Sage Therapeutics (SAGE +$2.98 or +12.95% after closing -$0.81) reports Q4 and FY23 bucking the usual trend to “ascend” in positive territory. Cash position of $753 M, net loss was $32.7 million for Q4/23 compared to $147.1 million for Q4/22. For the FY23, the net loss was $541.5 million compared to $532.8 million for FY22.

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Never leave an investor uninformed!

Remember that overnight and pre-open actions’ futures and global markets doesn't necessarily translate into actual trading in the today’s market session.

There is no breadline for share pricing and fact-based intelligence!

I also follow the dictum, quoting Churchill that “short words are best, and the old words when short are best of all.”

 

Wednesday: The pre-open Dow futures are UP +0.26% or (+09 points), the S&P futures are UP +0.50% or (+25 points) as the Nasdaq futures are UP +0.73% or (+128 points)

U.S. stock futures nudged higher Wednesday,

European markets were cautiously higher,

Most Asia-Pacific markets fell.

 

Henry’omics:

We need to more than consider the economic environment to comprehend the micro re “our” universe of cell and gene therapy companies …

Tuesday was the worst session since March 2023 as the Dow shed -1.35%, the S&P 500 lost -1.37%, and the Nasdaq slumped -1.8%.

Economic Data Docket: comments from Chicago Fed President Austan Goolsbee.

  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 6.87% last week from 6.80% the week before.
  • Applications to refinance a home loan fell 2% for the week but were 12% higher than the same week one year ago.
  • Applications for a mortgage to purchase a home dropped 3% for the week and were 12% lower than the same week a year ago.

 

Tuesday’s night RegMed Investors (RMi) Closing Bell: “CPI infused dominoes topple the cell and gene therapy sector. Their displacements seems like a slinky from Monday’s market and Nasdaq’s session.” … https://www.regmedinvestors.com/articles/13328

 

Q1/24: February – 5 positive and 4 negative closes

  • January: 2 holidays, 11 negative and 8 positive closes

 

Companies in my headlights – It’s your decision; I provide ideas and context:

I post about “indication intelligence” devoting my time to collection and analysis of information to assist investors with insight into sector vulnerabilities and strengths. A dictionary definition of “indicate” refers to something less than a certainty; an indication could be a signal of being oversold or overbought, a recommendation, or grounds for inferring or a basis for believing.

Positive Indication:

Tuesday, Monday, Friday, Thursday, Wednesday and last Tuesday’s closing “numbers” with aftermarket dollar ($) and cent ($0.00) value and percentage (%)

Caribou Biosciences (CRBU) closed down -$0.66 with a positive +$0.20 or +3.09% pre-open indication.

CRISPR Therapeutics (CRSP) closed down -$3.66 after Monday’s +$6.43, Friday’s +$1.18, Thursday’s +$3.11 and last Wednesday’s -$1.16 with a positive +$1.55 or +2.13% pre-open indication

Sage Therapeutics (SAGE) closed down -$0.81 with a positive +$2.98 or +12.95% pre-open indication; earnings’ reporting today.

 

The BOTTOM LINE: The outlook for stocks is also shadowed by the beginning of earnings’ season, an uncertain economic picture, geopolitical and recession risk, surmounted by the risk that the Fed will not cut rates.

Repeating from Monday, “Earnings’ week – 4 of them.” This week will bring a new challenge to the rally, with the January reading of the Consumer Price Index due today.

Also from Friday, “Don't chase the cell and gene therapy sector, especially with the Nasdaq extended.”

The remainder of the month’s trading sessions will be critical as the RegMed sector will begin earnings’ LPS (loss-per-share) season, estimates and consensus which set market reaction. 

  • Coming attractions …Q4 and FY23 reporting season will ALSO report “runways” and those whose cash positions render their future questionable.

Wednesday thoughts coming after Tuesday’s actions: market and sector are looking extended; investors should be cautious about new buys!

  • The small-cap Russell 2000 tumbled nearly 4%, but closing fractionally above the 50-day line.
  • The 10-year Treasury yield surged 14.5basis points to 4.315%, the highest settlement since 11/30.

The REAL question is …  Was Tuesday's retreat a one-off or the start of a more-serious pullback? A Nasdaq test of the 21-day would not be surprising, but the major indexes don't have to stop there. A slide to the 50-day moving averages, or worse, would likely trigger significant losses in growth stocks.

Welcome to my world of defining the “grey’ in our universe!

  • 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!”
  • The sector is what it is, until it isn’t and even then, it doesn’t seem to be… as NOT much changes as the sector’s share pricing rides the waves of volatility, algorithms, electronic trading and short covering.

 

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. All investments are subject to risks. Investors should consider investment objectives.

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.  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.

Henry McCusker, the editor and publisher of RegMed Investors could hold or have positions securities referred to in this publication and he will NOTIFY investors of holdings.