June 27, 2016 6:30am

As the markets tank today and tomorrow …

 

The Brexit crisis is still a high-pitched BUY for investors in “some” companies and a coming death knell for a number of sector “participants” – those that need financing with less than a year’s worth of cash

The odds are on the investors’ side in the stem, cell, gene and regenerative therapy sector

I am not suggesting the bottom is in but, I also know not to look a gift horse in the mouth!

The real issue will concern the sensitivity of algorithms and how the “machines”react?

 

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Where do investors turn for honest/truthful insight and perspective - I say intelligently what others won't, so you can do what others can't!

I offer a tool set of pertinent facts defining the who, when, where, which and what of it!

 

 

Dow futures are DOWN -0.43% and NASDAQ futures DOWN -0.53%

Indexes and ETFs: DOWN are the IBB (-1.56%) and IWM (-0.58%) and XLV and XBI are not indicating

 

U.S. stock index futures pointed to a lower start to trade on Monday, as European stocks and currencies continued to decline following the U.K. vote to leave the European Union (EU).

European stocks extended losses as the fallout from Britain's decision to leave the European Union (EU) continues, sending the pound falling as well.

Asian markets closed higher, shrugging off Friday's global selloff sparked by the U.K.'s unexpected vote to leave the European Union (EU).

 

 

The stem, cell and gene and regenerative therapy (SCG&RT) sector closed NEGATIVE on Friday, POSITIVE on Thursday, NEGATIVE on Wednesday and Tuesday, POSITIVE on last Monday.

 

The SCG&RT sector’s record after the last 5 days (of 43 covered companies):

  • Friday closed NEGATIVE with 37 decliners, 5 advancers and 1 flat;
  • Thursday closed POSITIVE with 8 decliners, 33 advancers and 2 flats;
  • Wednesday closed NEGATIVE with 27 decliners, 12 advancers and 4 flats;
  • Tuesday closed NEGATIVE with 28 decliners, 14 advancers and 1 flat;
  • Last, Monday closed POSITIVE on Monday with 7 decliners, 33 advancers and 3 flats;

 

Remembering Friday’s post, “Done is done, what should investors do as the Russell rebalances, Q2 nears its end – tread carefully,  focused on companies with solid cash positions.”

 

U.S. stocks plunged more than 3% Friday to end in the red for the year so far after Britain surprised markets by voting to leave the European Union. The Dow closed down -3.39%— its eighth-largest point loss ever while the Nasdaq closed down -4.12% which was the index's worst since August 2011.

One key indicator is the CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, briefly topped 26 to its highest since mid-February before holding near 23.5.

It's been a rough year for the stem, cell and gene and regenerative therapy (SCG&RT) sector investor.

  • The <mid-cap weighted> iShares Nasdaq Biotechnology ETF (NASDAQ: IBB) is down 25% for the year. 

“What we are seeing in the stem, cell, gene and regenerative therapy sector is the repricing of risk with heightened uncertainty – but, still an overreaction.”

Pricing recovery  … “when an entire index falls 10% in a day, you hold your nose and hit the buy button”.  I have absolutely no idea what the implications will be, but I’m fairly confident that it is no more significant than any of the past cycles, that we have experienced … there is always a REBOUND –NOT today or even tomorrow but, it’s in the air!

Take a whiff …

 

 

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

Watch list:

  • The iShares Nasdaq Biotechnology (IBB) closed Friday down -4.98% and is DOWN -0.58% in Monday’s pre-market;

 

  • The SPDR S&P Biotech ETF (XBI) closed Friday down -4.90%  and is not indicating in Monday’s  pre-market;

 

  • The Health Care Select Sector SPDR ETF (XLV) closed down Friday -2.93% and is not indicating in Monday’s pre-market;

 

  • The iShares Russell 2000 (IWM) closed Friday down -3.66% and is DOWN -1.56% in Monday’s pre-market.

 

 

Companies in my spotlight:

After all the bookies have spoken – wrongly;  institutional history doesn’t apply!

Stand, watch and listen, I would’t keep eyes on individual stocks, this could well be an opportunity, but it probably makes sense to dollar cost average your purchase.

Do your buying over a number of days, rather in one shot.

The real problem with Brexit from the standpoint of the markets and investors is that it is not a one-off event. Rather, it opens up a can of worms …

Who do I like:

  • Applied Genetic Technologies (AGTC)
  • bluebird bio (BLUE)
  • Bellicum Pharma (BLCM)
  • Fate Therapeutics (FATE)
  • Intrexon (XON)
  • Juno Therapeutics (FATE)
  • Kite Pharma (KITE)
  • Mesoblast (MESO)
  • MiMedx (MDXG)
  • Regenxbio (RGNX)
  • Spark Therapeutics (ONCE)                                         

 

Researchers and biotech executives with British ties return to work this morning still hungover from Friday’s momentous news that the United Kingdom voted to leave the European Union. (STAT, Boston Globe)

  • Biotech analysts say they aren’t too worried about Brexit’s financial impact on the sector, but the new geopolitical order is expected to disrupt everyone from EU grant-funded scientists to EU drug regulators to big drug companies in the midst of mergers.
  • Behind the scenes, you can expect the big players in health and medicine to start laying plans to adapt to a post-Brexit world.
  • More immediately, don’t be surprised if biotech stocks take a hit this week, after falling 5% on Friday, amid broader market turmoil.

 

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.