Indication intelligence, analysis and sector perception

Lower and ugly open expected, on the first day of trading - don’t lose sight of sector upside potential

January 4, 2016 6:37am

The stem, cell and gene therapy RegMed (SCGT&RM) sector weighed down by volatility had a lot to celebrate on New Year’s Day – 2015 was over!

Investors will still have to deal with more of the same however; a better future will be based on better guidance and communication

While others might provide the content; I provide the context, interpretation and the pricing metric. The time has come to SUBSCRIBE! Can you afford not to?

Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors before the sector and markets open.

DOW futures are DOWN -1.7% and NASDAQ futures are DOWN -1.9%

The exchanges are set for steep losses at the open on Monday, with U.S. stock futures mired in red after a market rout in Asia, where a slump in Chinese stocks triggered a trading halt. Investors stateside are also waiting for the latest readings on the manufacturing and construction sectors.

European markets slumped amid a sharp sell-off in Chinese stocks and heightened geopolitical tensions between Iran and Saudi Arabia.

Asia Pacific markets plunged lower after feeble manufacturing surveys revived concerns over the mainland Chinese's economic slowdown.

The sharp losses followed downbeat sessions in both Europe and Asia, which were spurred by an almost 7% slide in China’s Shanghai Composite Index SHCOMP ( -6.86%) on the back of a weak manufacturing reading. The slide triggered a new circuit-breaker system for Chinese stocks, halting trading on the mainland for the rest of the day.

Data docket: The Markit purchasing managers index for the U.S. manufacturing sector for December is due at 9:45 a.m. ET. The ISM manufacturing index is due at 10 a.m. ET. It is forecast to rise to 49.1% in December from 48.6% in November. Also due at 10 a.m. ET are the figures on construction spending for November.

The RegMed sector closed NEGATIVE on Thursday and Wednesday following a barely POSITIVE close on Tuesday after a NEGATIVE close on last Monday,

Past and present week:

· Friday, the markets were closed;

· Thursday closed NEGATIVE with 23 decliners, 18 advancers and 2 flats;

· Wednesday closed NEGATIVE with 23 decliners, 18 advancers and 2 flats;

· Tuesday closed POSITIVE with 20 decliners, 21 advancers and 2 flats;

· Monday closed NEGATIVE with 29 decliners, 13 advancers and 1 flat;

You’ve made it to the office, turned on the monitor having just gotten your coffee and it hits you - what are today’s trades?

The recap:

The S&P 500 and Dow both ended lower for the year, their worst since 2008. The NASDAQ closed up more than 5.5%for the year helped by outperformance in biotech stocks. The Russell 2000 also had its worst year since 2008;

The iShares Nasdaq Biotechnology ETF (IBB) gained 11.5% for the year, its seventh-straight year of gains;

Despite a volatile year that saw the major U.S. averages plunge more than 10%, the indexes ended about 5% or less away from their record intraday highs.

It’s time for a change … the stem, cell and gene therapy RegMed (SCGT&RM) should be positioned for a stronger start to the January session.

Stocks could get a boost next week from the so-called "January effect," when stocks that were sold off in December for year-end tax harvesting rally back in the next month as investors scoop them back up at lower prices.

Along with the return of many investors next week after the holidays, the economic calendar is more active, culminating with Friday's payrolls report.

And so it goes: news breaks, data is digested but, beware of the window dressing presented by volatility - pumpers pump and traders see right through it and dump!

Repeat warning - a new week and New Year ... the time has come to SUBSCRIBE, the last day of the "free read"! Can you afford not to?

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.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.

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Editor and Publisher ... Henry McCusker enters his tenth (10th) year at RegMed Investors with past experience in sell-side analysis, buy-side management, corporate management and due diligence.

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Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.