Lower open expected as the markets set-up for a struggle on Friday.

January 15, 2016 6:29am

Once stem, cell and gene therapy RegMed stocks do find a bottom, I expect a slow upward trend. 

The question I have for many executives is how much Teflon can they wear after all the miscues? 

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. The time has come to SUBSCRIBE!  Can you afford not to?

Investors suffer from the paradox of information overload. If you have a smartphone in your pocket, you can access more information about the financial markets than the world's top hedge funds did 20 years ago. Yet, I bet your investment returns have not improved one iota as a result.  But, who is interpreting that information … get it here!   

DOW futures are DOWN -1.9% and NASDAQ futures are DOWN -2.2%

U.S. stock index futures indicated a lower open on Friday as traders looked to a speech from New York Federal Reserve President William Dudley as well as a host of important data.

European markets extended losses as Chinese stocks closed sharply lower and the oil price dipped back below $30 per barrel.

Major Asian stock markets ended down Friday, erasing early gains despite a positive finish from Wall Street overnight.

Data docket: retail sales, PPI and the Empire State manufacturing survey will be released at 8:30 a.m. ET. Industrial production and capacity utilization are scheduled to be released at 9:15 a.m., while consumer sentiment and business inventories are set to come out at 10:00 a.m. Dudley is scheduled to speak at the Economic Leadership Forum in Somerset, New Jersey, at 9 a.m. ET. Traders expect Dudley to sound dovish on U.S. monetary policy and there's anticipation that he will discuss whether he sees recent market developments as factors that could give the Fed pause.

The stem, cell and gene therapy RegMed sector closed POSITIVE on Thursday, NEGATIVE on Wednesday, Tuesday, Monday and last Friday.

Past five (5) days:

·         Thursday closed POSITIVE with 13 decliners and thirty advancers;

·         Wednesday closed NEGATIVE with 41 decliners, 2 advancers and o flat;

·         Tuesday closed NEGATIVE with 23 decliners, 19 advancers and 1 flat;

·         Monday closed NEGATIVE with 34 decliners, 7 advancers and 2 flats;

·         Last, Friday closed NEGATIVE with 25 decliners, 17 advancers and 1 flat;

I stated yesterday, the stem, cell and gene therapy RegMed (SCGT&RM) sector was DUE for an UP day and we GOT one! 

Five statements have also come TRUE:

1.       The sector has been undermined by non-fundamental reasons - uncertainty, emotion and exaggerated expectations that are triggered by selective dissemination of “positioned” clinical data;

2.I had said it was far too soon to assume the worst;

3.       Technical indicators such as support levels and market breadth suggest it was nearly time for a bottom to be found;

4.       Shareholders are going to have to come to the realization that the trading frequency and long-term investing we once considered “normal” are over and portfolios have to be adjusted more frequently;

5.       Remember, this New Year - 2016 is all about “short-termism”

It will be very interesting to see how investors respond today ahead of the weekend. Strong risk aversion ahead of the weekly close … will be a clear vote of no confidence in the markets, which doesn’t bode well for the coming weeks.

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?   

• Applied Genetic Technologies (AGTC) closed UP +$0.10 to $14.72 on Thursday having been down -$0.86 on Wednesday and -$0.17 on Tuesday to $15.84 after Monday’s -$1.00 after Friday’s -$0.41 after Thursday’s -$1.81 following Wednesday’s -$0.60 after last Tuesday’s +$0.03. I ‘m NOT giving up standing on my bully pulpit – Maintaining BUY;

• BioLife Solutions (BLFS) closed DOWN -$0.12 to $1.59 on Thursday, followed downdrafts of -$0.06 and the previous day’s -$0.22 after all the downside fluctuation from 1/4/16. Post the filing of a mixed shelf of a $20 M offering, cash is down to $5.25 M as of 9/30/15 with total operating expense of $2.269 M per quarter and an operating loss of 1.296 M. Funny, how BLFS has hidden <almost didn’t find them> all financials and filings from the website – hiding something or many issues? A $120 K a year full-time Chairman, a $500 K a year CEO, a $400 K CTO and a $300 CFO; too many cooks in the kitchen for a $1.59 share price. Offering pending, SELL;

• Bluebird bio (BLUE) closed UP +$0.40 to $46.57 after a number of disastrous depreciative months. Could we be seeing a mild resurgence in the share pricing? Financial results (Q4) are due with 18.99 M in revenue, $43.78 M in debt but, $707.46 M in cash post Q3, The after-market indication is +$0.16. BUY ;

• Caladrius Biosciences (CLBS) closed UP +$0.10 to $0.65. After the melanoma program was dropped post the DOA of the cardiac program. The focus is now PCT which has a competitive burden and crowded market especially with companies wanting to keep clinical manufacturing in-house.  Shouldn’t CEO Mazzo and the Basking Ridge polo club be preparing their resume while “presenting” at the Club Med, Noble conference in Sandpiper, Florida I it’s all about perception! Again, what has he done for shareholders since his “anointment” by then NeoStem’s (NBS) BOD – the stock price was $3.77. The cash position will be severely affected by all the lay-offs, pay-outs and cut-backs - Maintaining SELL;

• Capricor (CAPR) closed DOWN another -$0.04 to $2.01 on Thursday. Following previous sessions -$0.11 and -$0.06 after Monday’s -$0.22 after last Friday’s +$0.02. A failed offering, small volume and pricing volatility reflect a short-term trading opportunity.  CAPR, answer me two (2) questions:  what is the patent position of their research into Exosomes and WHY is this in-experienced CEO still sitting in the chair, that is when she shows-up and finally where is the BOD oversight?  – Maintaining SELL;

• Histogenics (HSGX) closed DOWN -$0.11 to $2.44 and is oversold in relation to the past three (3) months. A shareholder update would help those shareholders understand the status – Oversold – BUY;

• Juno Therapeutics (JUNO) closed UP +$0.46 to $35.56. A lot of buying/selling went with the daily volume of 1.7 M shares <3 month average = 1.1 M shares>. Still low as to the historical 3 months but, I don’t see a trading catalyst –HOLD ;

• Kite Pharma (KITE) closed UP +44.56 to $54.92. Did it see a bottom of $50.36 on 1/13/16? Friday’s after-market indication is UP +$1.08 – BUY;

• Neuralstem (CUR) closed DOWN -$0.13 to $0.66. Will CUR be seeking a “strategic review of its position” - SELL;

• Verastem (VSTM) closed UP +$0.08 to $1.40 on Thursday. A traders delight with total cash per share of $3.26 <$120.47 M in cash with 36.93 M shares outstanding and 31.39 M share float –  Maintaining BUY;

Opinions expressed are those of the author and are subject to change, and are 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.