January 29, 2016 6:48am

 

Investors aren’t paid to take risk

 

Friday’s sermon and indications, will you know who? Let me obsess for you.  Subscribe … http://www.regmedinvestors.com/create-account ...  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 UP +0.8% and NASDAQ futures are UP +0.6%

 

 

U.S. stock futures pointed early Friday to sizable gains at the open, putting the market on track to join in a global rally after a surprise Bank of Japan decision. The BOJ said it would adopt a negative interest rate policy for the first time, aiming to pre-empt further economic setbacks.

European stocks charged higher, after the Bank of Japan unexpectedly adopted negative interest rates, but are still on track to close January with a monthly loss.  The Stoxx Europe 600 SXXP claimed a 1.3% rise to 338.49, with all sectors moving higher, led by financial, consumer goods and telecommunications shares.

Asian markets climbed after Japan shares took a roller-coaster ride in the immediate aftermath of the Bank of Japan's (BOJ) decision to adopt a negative interest rate policy. The Nikkei 225, which was down 0.6% before the announcement, surged as much as 3.51% soon after, before tumbling as much as 1%. It then surged to close up 2.80%, or 476.85 points, at 17,518.30.

 

Data docket: The reading on U.S. Q4 economic growth is due at 8:30 a.m. ET, expect gross domestic product to expand by 0.7%. Other forecasts see 0.9% GDP growth.  Reports on U.S. employment costs and advance trade in goods are also expected at 8:30 a.m. ET. In addition, investors are slated to get a reading on the Chicago area’s economy at 9:45 a.m., a consumer-sentiment report at 10 a.m. and U.S. oil rig count data at 1 p.m.

 

 

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

 

Past five (5) days:

•   Thursday closed NEGATIVE with 27 decliners, 14 advancers and 2 flats;

•   Wednesday closed NEGATIVE with 34 decliners, 7 advancers and 2 flats;

•   Tuesday closed POSITIVE with 18 decliners, 22 advancers and 3 flats;

•   Monday closed NEGATIVE with 26 decliners, 16 advancers and 1 flat;

•   Last, Friday closed POSITIVE with 5 decliners, 38 advancers and 0 flat;

 

 

I believe the stem, cell and gene therapy and RegMed sector will overcome recent retests of lows.

  •  “Our” universe is facing heightened scrutiny, but those that establish a calibrated approach to operational-risk testing will thrive.

Directors and executives face oversight responsibilities but, have they or can they manage those issues?

  • There’s a problem with managing risk and oversight – retrospectively!
  • It’s a variation on what military historians call “fighting the last war.” As memories of weak governance and transparency are still out there but, there is always the “small test” that each BOD and company executive must realize beyond the letter of the law or that errant call to the lawyers.

Investors aren’t paid to take risk, executives are compensated to address and resolve issues that others might – sit on!

  • WHY aren't you communicating ... on a timely basis?
  • I say get out in front of an issue, before it bites into fleeting perception and depreciates reality! Q4 reporting is being prepared – get it into paragraph form!

 

 

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?  Friday’s indications:

  •  More than lately, the stem, cell and gene therapy RegMed sector has been a game of equity roulette played in the market casino;

The question is WHO is the croupier who spins a wheel in one direction, then spins a ball in the opposite direction around a tilted circular track running around the circumference of the wheel?

 

I have my own view of betting options; so I will keep it short and hope the week and month ends on a better note!

  • Cytori Therapeutics, (CYTX) received a deficiency letter from the NASDAQ Stock Market; they appealed and now have until 5/31/16 to rectify the issue. A few good and strategic moves re capitalization and some positive news and CYTX could be back in the measureable appreciation “game” again <source: filed 8-K> - HOLD;

 

  • Fate Therapeutics (FATE) closed UP +$0.01 to $2.20 after being down -$0.29. I will go out on the limb; FATE is one of MY favorites – Maintaining BUY;

 

  • Intrexon (XON) closed UP +$2.63 to $29.00 after Wednesday’s +$0.42. The explosive spread of the Zika virus is sweeping up the shares of companies positioned to be affected. XON urged as much as 24% during Thursday's trading session as a direct result of the spreading Zika virus. Shares ultimately finished higher by 10%. The reason the spread of Zika virus is notable for Intrexon is that it purchased Oxitec this past summer. Oxitec has numerous development programs targeting unmet global diseases, but one of those programs is targeting Zika. Considering that few other drug developers are researching a treatment for Zika; XON could have a head start on a possible cure. The aftermarket indication is +$0.37 – 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.