September 20, 2024 4:41pm

As I asked yesterday, “The day after; is there a walk of shame i.e. decline coming as equities moved skyward after rate cut?” Portfolios walked it …`

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!  

The week in Review

 

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

 

Friday: The Dow closed UP +38.17 points or +0.09%, the S&P closed DOWN -11.09 points or -0.19% while the Nasdaq closed DOWN -65.66 points or -0.36%

  • Indexes closed mixed Friday to cap a big week that came in the wake of the Fed decision on rate easing
  • For the week: the Dow jumped +1.6%, the S&P 500 is up +1.4%, while the Nasdaq is up +1.5%.

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 …

  • September has historically been a bad month for stocks. But Septembers like this one usually happen before a strong Q4.

Friday’s advance/decline line at the open was negative with 5 incliners, 27 decliners and 3 flats; ending with a negative close at the close of 8 incliner, 24 decliners and 3 flats

  • The small-cap Russell 2000 fared worse than the other major indexes and gave up 0.7%. 

Metrics:  Friday, the IBB was down -1% and the XBI was -0.80% while the VIX was down -0.26 points or -1.59% at 16.07

 

As compared to: Thursday: The Dow closed UP +522.09 points or +1.26%, the S&P closed UP +95.38 points or +1.70% while the Nasdaq closed UP +440.68 points or +2.51%

  • Indexes spurred the economy to jump Thursday
  • Many investors were surprise to some investors who criticized the size of this initial cut

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 …

  • Economic Data Docket: initial unemployment claims for the week ended Sept. 14 fell to 219,000 versus estimates for 230,000. Claims numbered 230,000 for last week.
  • Equities surged …
  • September has historically been a bad month for stocks. But Septembers like this one usually happen before a strong fourth quarter.

Thursday’s advance/decline line at the open was positive with 31 incliners, 2 decliners and 2 flats; ending with a positive close at the close of 24 incliner, 8 decliners and 3 flats

  • The current pricing of the sector (in my mind) presents some downside risks
  • Existing home sales for August came in at 3.86 M, missing estimates for 3.9 M

Metrics:  Thursday, the IBB was UP +1.32% and the XBI was UP +1.61% while the VIX was down -1.90   points or up -10.42% at 16.33

 

As compared to: Wednesday: The Dow closed DOWN -103.08 points or -0.25%, the S&P closed DOWN -16.32 points or -0.29% while the Nasdaq closed DOWN -54.76 points or -0.31%

  • Indexes closed lower Wednesday in a volatile session as the Federal Reserve lowered interest rates in a half-point percentage move.
  • Many investors are betting that the Fed will be able to stave off a recession as it eases monetary policy from current levels.

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 …

  • Equities surged, purged cutting gains in volatile trading to close positive 
  • But indexes rolled over despite Powell’s comments. Part of the decline may be due to the sizable rally into Wednesday’s much-anticipated cut. The S&P 500 is up more than 18% on the year and 2% in the last 1 month alone

Wednesday’s advance/decline line at the open was positive with 21 incliners, 9 decliners and 5 flats; crashing at 1;15 P.M. with 10 incliners, 23 decliners and 2 flats ending with a negative close at the close of 13 incliner, 20 decliners and 2 flats

Metrics:  Wednesday, the IBB was down -0.21% and the XBI was down -0.14% while the VIX was up +0.44 points or up +2.50% at 18.05

 

As compared to: 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: “not feelin’ it with major indexes at record highs. Today is triple witching Friday; trading in closing, opening, and offsetting futures and options contracts during triple-witching days is related to squaring positions, the surge of activity can also produce price inefficiencies.” … https://www.regmedinvestors.com/articles/13624   

 

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

  • September – 7 positive and 8 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

 

Friday’s Closing Down (10 of 24):

  • Alnylam Pharmaceuticals (ALNY -$2.45 after Thursday’s +$3.18, Wednesday’s -$1.31, Tuesday’s +$3.03 and Monday’s +$5.10),
  • Vericel (VCEL -$1.46 after Thursday’s +$1.68, Wednesday’s +$2.03 after Tuesday’s -$0.29 and Monday’s -$1.15), 
  • CRISPR Therapeutics (CRSP -$1.31 after Thursday’s +$0.10, Wednesday’s +$0.28, Tuesday’s +$1.67 and Monday’s -$1.20),
  • Intellia Therapeutics (NTLA +$1.05),
  • Regenxbio (RGNX -$0.81 after Thursday’s -$0.42 and Tuesday’s +$0.24),
  • AxoGen (AXGN -$0.59),
  • Sage Therapeutics (SAGE -$0.40),
  • Beam Therapeutics (BEAM -$0.39 after Thursday’s +$0.53, Wednesday’s +$0.07, Tuesday’s -$0.04 and Monday’s -$0.68),
  • uniQure NV (QURE -$0.31 after Thursday’s -$0.09, Wednesday’s+$0.14 and Tuesday’s +$0.22),
  • Verve Therapeutics (VERV -$0.19 after Thursday’s +$0.13, Wednesday’s +$0.12 and Tuesday’s -$0.03),

Flat (3):

  • Bellicum Pharmaceuticals (BLCM)
  • Caribou Biosciences (CRBU)
  • Homology Medicine (FIXX)

Friday’s Closing Up (8 of 8):

  • Blueprint Medicine (BPMC +$0.74 after Thursday’s +$1.61 after Wednesday’s +$2.82 after Tuesday’s +$0.47 after Monday’s -$2.60),
  • Mesoblast (MESO +$0.44),
  • LENZ Therapeutics (LENZ +$0.31 after Thursday’s +$0.40 after Tuesday’s +$0.19 after Monday’s -$0.95),
  • BioLife Solutions (BLFS +$0.05 after Thursday’s +$2.00 after Wednesday’s +$0.27 after Tuesday’s -$2.01 after Monday’s +$0.34),
  • Harvard Apparatus RT (OTCQB: HRGN +$0.11),
  • Sangamo Therapeutics (SGMO +$0.0602)
  • BioLife Solutions (BLFS +$0.05),
  • Ionis Pharmaceuticals (IONS +$0.02),

 

The BOTTOM LINE: Volume is elevated because today is "triple witching" day.

  • This quarterly event happens on a Friday with the simultaneous expiration of stock options, stock index futures and stock index options.
  • The Nasdaq also fell 0.3%. That sent the index back below the 18,000 level.
  • Volume was higher on the Nasdaq today.

 

The 3rd week of September’s as Friday bombed the sector after Thursday’s sector ascended to new heights after Wednesday declined after 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!

 

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

 

Pharma news: On Friday, Novo Nordisk suffered a setback in its quest and shares tumbled nearly 6% in trading after data from a phase 2a trial of monlunabant came in below expectations.

  • Patients lost about 5.8% of their body weight after 16 weeks of treatment. Investors had been hoping for at least a 15% reduction.
  • The experimental once-daily pill was added to Novo’s portfolio with the acquisition of Inversago Pharmaceuticals last year.
  • Unlike Novo’s Wegovy, it is not based on incretin hormones such as GLP-1. Instead, it is a cannabinoid, or CB1 receptor blocker.

 

The top three (3) performing in the session: 

  • Friday: Blueprint Medicine (BPMC), Mesoblast (MESO) and LENZ Therapeutics (LENZ)o
  • Thursday: Alnylam Pharmaceuticals (ALNY), BioLife Solutions (BLFS) and Vericel (VCEL)
  • Wednesday: Blueprint Medicine (BPMC), Vericel (VCEL) and Ionis Pharmaceuticals (IONS)
  • 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: 

  • Friday: Alnylam Pharmaceuticals (ALNY), Vericel (VCEL) and CRISPR Therapeutics (CRSP)
  • Thursday: Verve Therapeutics (VERV), CRISPR Therapeutics (CRSP) and uniQure NV (QURE)
  • Wednesday: Alnylam Pharmaceuticals (ALNY), Ultragenyx Pharmaceuticals (RARE), Regenxbio (RGNX)
  • 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.