November 2, 2016 8:20am
… As volatility jumps to its highest levels since June
It’s a sign, a signal and an indicator of market and sector anxiety and ultimately uncertainty to be sold into
An analogy and a question is did Nero fiddle while Rome burned? It’s been pretty easy to cast blame on traders, who aren’t always “our” friends and are seen as the “depreciators “but, as there is a problem with history and this story – the upside is still in the wind. Don’t play with the SELL or BUY button – wait for the rain to blow-out the flames …
I answer one question; in which company should investors put, keep and commit their money!
If you are not a subscriber, you won’t know the morning’s indications and who is in the headlights.
I write in every line that investors need to avoid risks as if I were the first to be hurt if I am wrong!
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Indexes and ETFs: The IBB (-0.28%), IWM (-0.06%) are DOWN while the XLV (+0.13) is UP and the XBI is NOT indicating
Dow futures are DOWN -0.11% and NASDAQ futures are UP +0.02%
U.S. stock index futures pointed to a lower open on Wednesday, as investors prepared for more earnings from top corporates, while awaiting the latest decision from the U.S. central bank.
European shares were lower in morning trade as doubts over the U.S. election outcome intensified and investors reacted to more corporate earnings.
Asian markets dropped after the VIX's "fear index" spiked on jitters over the U.S. presidential elections.
Data docket: On Wednesday, the Federal Open Market Committee is expected to conclude the second day of its two-day monetary policy meeting, and release its latest statement on the state of the U.S. economy. Investors will be keeping an eye on the meeting for any signals as to when the central bank could raise interest rates. The FOMC's statement is due out at 2 p.m. ET. Aside from the Fed statement, investors will be on the lookout for the ADP employment report, which is due out at 8:15 a.m. ET. Mortgage Applications dropped 1.2%.
The stem, cell, gene and regenerative therapy (SCG&RT) sector closed POSITIVE on Tuesday, NEGATIVE on Monday, Friday, Thursday and last Wednesday.
The SCG&RT sector’s record after the last 5 days (of 43 covered companies):
· Tuesday closed POSITIVE with 14 decliners, 26 advances and 3 flats;
· Monday closed NEGATIVE with 32 decliners, 11 advancers and 0 flat;
· Friday closed NEGATIVE with 22 decliners, 16 advancers and 5 flats;
· Thursday closed NEGATIVE with 30 decliners, 10 advancers and 3 flats;
· Last Wednesday closed NEGATIVE with 28 decliners, 14 advancers and 1 flat;
Remembering Tuesday’s closing post, “Appreciation is welcomed back. Still, the enthusiasm gap is weak as even traders are skittish while investors are cowering and questioning the reasons of some pullbacks … While he VIX shoots 10% higher, the SPX fell and the IBB rose.”
As I had stated, the sector was up on Tuesday after seven (7) down sessions but, there seems to be an under-current to the upside as to the slow plodding of today’s session. A sector that has been running at slow volume and little steam just doesn’t “pop” and stay on a positive incline …
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 Tuesday up +0.94% and is DOWN -0.28% in Wednesday’s pre-market;
· The SPDR S&P Biotech ETF (XBI) closed Tuesday up +1.23% and is NOT indicating in Wednesday pre-market;
· The Health Care Select Sector SPDR ETF (XLV) closed down -0.36% Tuesday and is UP +0.13% in Wednesday’s pre-market;
· The iShares Russell 2000 (IWM) closed down -1.22% on Tuesday and is DOWN -0.06% in Wednesday’s pre-market.
Companies in my headlights:
Applied Genetic Technologies (AGTC) closed DOWN -$0.30 to $6.855 – the lowest I have seen for a long while. What has changed, AGTC has a substantial cash position of $172.7 M, revenue, no debt, and a named partner – Biogen (BIIB), multiple trials as well as pre-clinical programs and on-going research in a hot universe. Book value per share is $9.87 and there is NO need for a capital markets offering; with a float of 9.88 M shares with 52.30% held by institutions and 18.05 M outstanding with 51.15% held by insiders are positives. A slow-down in a trial recruitment isn’t worth this depreciation, compared to others - I’d be buying for the upside - OVERSOLD – Maintaining BUY;
Verastem, Inc. (VSTM) closed at $1.27. VSTM and Infinity Pharmaceuticals (INFI) entered into a license agreement under which Verastem licensed exclusive worldwide rights to develop and commercialize Infinity's oncology product candidate duvelisib. Duvelisib is an oral inhibitor of phosphoinositide-3-kinase (PI3K)-delta and PI3K-gamma being investigated for the treatment of hematologic cancers, including chronic lymphocytic leukemia (CLL), indolent non-Hodgkin lymphoma (iNHL) and T cell lymphomas. Verastem will pay to Infinity up to $28 M in milestones, with positive data from DUO®, a P3, randomized monotherapy study of duvelisib in patients with relapsed/refractory CLL, triggering the first milestone payment, and royalties on net sales. INFI is entitled to receive two milestone payments, $6 M upon positive data from the DUO study and $22 M upon the first regulatory approval inside or outside of the U.S. VSTM will also pay INFI tiered mid-to-high single-digit royalties on net sales and will be responsible for the single-digit-royalty on net sales of duvelisib owed by Infinity to MundiPharma International Corporation Limited and Purdue Pharmaceutical Products L.P. Costly to the future for a pipeline – BUY;
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.
Henry’s comments are for informational purposes only and are not a substitute for personalized advice. Consult your advisor about what is best for you.
