September 17, 2024 4:43pm

Investors are still also nervous ahead of the Fed's rate decision Wednesday

RMi provides value to investors finding viable pricing, and discovering which sector companies are trading under what their true value is before the broader market catches on

I say today what others won't, so you can do what others can't by sticking to the FACTS!

Never leave an investor uninformed!  

I follow the dictum, quoting Churchill that “short words are best, and the old words when short are best of all.”

 

Tuesday: The Dow closed DOWN -15.90 points or -0.04%, the S&P closed UP +1.49 points or +0.03% while the Nasdaq closed UP +35.93 points or +0.20%

  • As the market awaited the Fed’s key interest rate cut decision.    
  • Disappointing jobs and manufacturing data in August sparked a large one-day sell-off. However, equities were able to rebound due to more constructive data releases and expectations of the Fed lowering rates.

Henry’omics: We need to more than consider the economic environment - rising rates and inflation to comprehend the micro re “our” universe of cell and gene therapy companies …

  • Stand-by for the Fed’s long-anticipated rate cut Wednesday afternoon, a move that could help boost earnings growth for companies following a backdrop of steep borrowing costs and high inflation. The Fed first embarked on its aggressive hiking campaign in March 2022.             

Tuesday’s advance/decline line at the open was negative with 11 incliners, 19 decliners and 5 flats; ending with a positive close at the close of 22 incliner, 11 decliners and 2 flats

Economic Data Docket: the U.S. Bureau of the Census' report on August retail sales rose 0.1% vs. the 0.3% dip economists expected and lagged the revised July unusually high increase of 1.1%. The Fed's August industrial production report showed it increased 0.8% and topped the 0.1% rise expected. It improved over a revised 0.9% drop in July. And August manufacturing output increased 0.9% vs. the flat reading that economists forecast, coming in much stronger than the revised 0.7% decline in July.

Metrics:  Tuesday, the IBB was down -0.29% and the XBI was down -0.36% while the VIX was up +0 47 points or up +2.74% at 17.61

 

As compared to: Monday: The Dow closed UP +228.30 points or +0.55%, the S&P closed UP +7.07 points or +0.13% while the Nasdaq closed DOWN -91.85 points or -0.52%

  • The Nasdaq composite fared worst among the major indexes but was off lows as it ended 0.5% lower. It tested its 50-day moving average after retaking the benchmark late last week.
  • Last week, the Dow has advanced 2.6%, the S&P 500 rose 4% and the Nasdaq gained 5.9%.

Henry’omics: We need to more than consider the economic environment - rising rates and inflation to comprehend the micro re “our” universe of cell and gene therapy companies …

  • Investors are “profit-taking” on cell and gene therapy sector gains; as indexes closed mixed after a rough start to a historically weak September.

Monday’s advance/decline line at the open was negative with 11 incliners, 19 decliners and 5 flats; ending with a negative close at the close of 6 incliner, 26 decliners and 3 flats

  • Cell and gene therapy sector declined in relation to a lot of ifs that has to do with the future rate cuts that are about to come into play.

Metrics:  Monday, the IBB was up +0.19% and the XBI was up +0.07% while the VIX was up +0.56 points or up +3.38% at 17.12

 

RegMed Investors’ (RMi) pre-open: “volatility is pitching from the mound, who is in batter’s box? The “Street” expects a cut Wednesday, the market is divided on the size of the potential reduction. I expect the cell and gene therapy sector to "hit fly and then foul bells" throughout the rest of September as Q3 comes to an end’” … https://www.regmedinvestors.com/articles/13619

 

Ebb and flow of MY covered sector cell and gene therapy session daily “endings”: Q3/24

  • September – 5 positive and 6 negative closes
  • August: 1 neutral, 10 positive and 11 negative closes
  • July: 1 market holiday. 1 day off, 6 negative, 1 neutral and 12 positive closes

 

Tuesday’s Closing Down (11 of 11):

  • BioLife Solutions (BLFS -$2.01 after Monday’s +$0.34),
  • Ultragenyx Pharmaceuticals (RARE -$1.01 after Monday’s +$0.62),
  • Vericel (VCEL -$0.29 after Monday’s -$1.15),
  • Solid Biosciences (SLDB -$0.15 after Monday’s -$0.40),
  • bluebird bio (BLUE -$0.0776),
  • MiMedx (MDXG -$0.07 after Monday’s $0.00)
  • Mesoblast (MESO -$0.05),
  • Compass Therapeutics (CMPX -$0.05 after Monday’s +$0.06),
  • Sage Therapeutics (SAGE -$0.05 after Monday’s -$0.26),
  • Beam Therapeutics (BEAM -$0.04 after Monday’s -$0.68),
  • Verve Therapeutics (VERV -$0.03),
  • Sangamo therapeutics (SGMO -$0.0055),
  • Precigen (PGEN -$0.0028),

Flat (2):

  • Bellicum Pharmaceuticals (BLCM)
  • Homology Medicine (FIXX)

Tuesday’s Closing Up (10 of 22):

  • Alnylam Pharmaceuticals (ALNY +$3.03 after Monday’s +$5.10),
  • CRISPR Therapeutics (CRSP +$1.67 after Monday’s -$1.20),
  • Intellia Therapeutics (NTLA +$0.89 after Monday’s -$0.56),
  • Ionis Pharmaceuticals (IONS +$0.83 after Monday’s -$1.49),
  • AxoGen (AXGN +$0.84 after Monday’s +$0.50),
  • Blueprint Medicine (BPMC +$0.47 after Monday’s -$2.60),
  • Prime Medicine (PRME +$0.255 after Monday’s -$0.35),
  • Regenxbio (RGNX +$0.24),
  • uniQure NV (QURE +$0.22),
  • LENZ Therapeutics (LENZ +$0.19 after Monday’s -$0.95),

 

 

The BOTTOM LINE: The small-cap Russell 2000 trimmed its increase to 0.5% after it also was more than 1% higher. Volume was higher on the Nasdaq versus the same time on Monday.

  • The Fed meeting will include the Fed's economic projections and a decision on the fed funds rate announced at 2 p.m. Wednesday. Fed Chair Powell's news conference will follow.

 

The 3rd week of September’s as Tuesday ascended helped by “uncle algo and his electronic trading dwarfs” after Monday, bolted to the downside …

  • The 2nd week’s Friday rapid positive ascension followed Thursday’s positive after Wednesday’s sector gained altitude post Tuesday’s negative drop in the puddle after Monday’s closed positive
  • following the 1st short week of September ending with 4 negative closes - a bust!

 

Quotes still relevant, “Investors are on guard for further bouts of volatility, particularly given the expectations surrounding the Fed meeting. Based on historical patterns, stocks typically have their roughest performance of the year during the second half of September.” <Quincy Krosby, chief global strategist for LPL Financial, CNBC>

  • Are we prepared for … a BIGGER dive in share pricing?

 

“Front-loading cuts a 25-basis-point cut "makes sense" as the Fed is behind the curve.

  • The Fed should have started easing monetary policy back in June, in July, perhaps. But now we're in September and we're late in the game."
  • The Fed walks a delicate tightrope. If you ease monetary policy by 25 basis points, it does little to nothing in terms of consumer rates, auto loan rates, mortgage rates, very little.
  • But the risks are asymmetric.
  • If the Fed does not ease monetary policy by as much as markets are anticipating, then you'll actually see a repricing of rates and you're going to see upward movement in terms of rates, and that could damage consumer spending activity, housing activity, business investment. That is the real risk right now.
  • The Fed's data dependency "breeds volatility," which then causes "sudden repricing in markets that are deterring economic activity.
  • That's the real risk right now, is that the Fed does not do what the markets are anticipating. And that's a lack of communication and a lack of robust framework on the part of the Fed that is leading to this." < EY chief economist Greg Daco>

 

The top three (3) performing in the session: 

  • Tuesday: Alnylam Pharmaceuticals (ALNY), CRISPR Therapeutics (CRSP) and Intellia therapeutics (NTLA)
  • Monday: Alnylam Pharmaceuticals (ALNY), Ultragenyx Pharmaceuticals (RARE) and AxoGen (AXGN)

The worst three (3) in the session: 

  • Tuesday: BioLife Solutions (BLFS), Ultragenyx Pharmaceuticals (RARE) and Vericel (VCEL)
  • Monday: Blueprint Medicine (BPMC), Vericel (VCEL) and Ionis Pharmaceuticals (IONS)

 

Welcome to my world of defining the “grey’ in our universe!

  • Right up front, “I also hate to be so negative or contrarian but, this is a NO spin zone and facts are its product; I can always be WRONG but … I am mostly EARLY!”

 

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.  All investments are subject to risks. Investors should consider investment objectives.

Henry McCusker, the editor, and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication. Regulation Analyst Certification (Reg AC): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and it’s or their securities.

I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.