November 3, 2023 5:42pm

Not quite, as the sector and market burnishes a weird paradox of moving parts

Pre-open Indications: 4 Hits < Cellectis SA (CLLS -$0.15), CRISPR Therapeutics (CRSP +$4.81), Soid BioSciences (SLDB -$0.10) Intellia Therapeutics (NTLA +$2.28)> 0 Miss

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The Dow closed UP +222.24 points or +0.66%, the S&P closed UP +40.56 points or +0.94% while the Nasdaq closed UP +184.09 points or +1.38%

Q3 earnings’ reporting cycle is here to confirm whether or not any bottoms are even close to happening?

 

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 …

Indexes closed up after a soft jobs report drove bond yields lower to cap the stock market’s best week in 2023.

For the week, indexes notched sizable weekly gains as investors grew hopeful that the Fed’s rate-hiking seems to be over. The Dow was up in its best week since October 2022. The S&P 500 was higher notching its first five-day advance since June. The Nasdaq gained more than 6%.

The October jobs report on Friday came in weaker than expectations, showing the Fed’s attempt to cool the economy and stifle inflation could be working.

Economic Data Docket: The U.S. economy last month added 150,000 jobs, below the 170,000 payrolls increase consensus estimate, and lower than September’s blowout of 297,000 jobs added. The unemployment rate rose to 3.9%, compared to expectations that it would hold steady at 3.8%.

  • Average hourly earnings also missed expectations on a monthly basis, rising 0.2% in October, below the anticipated 0.3% increase.

 

RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …

  • Friday’s advance/decline line opened positive at 26 up/ 6 down and 3 flats, stayed positive with 29 incliners, 5 decliners and 1 flat at the mid-day, ending with a positive close of 28 incliners, 6 decliners and 1 flat
  • Thursday’s advance/decline line opened positive at 26 up/ 6 down and 3 flats, stayed positive with 23 incliners, 10 decliners and 2 flats at the mid-day, ending with a positive close of 23 incliners, 9 decliners and 3 flats
  • Wednesday’s advance/decline line opened negative at 8 up/ 25 down and 2 flats, stayed negative with 13 incliners, 20 decliners and 2 flats at the mid-day, ending with a positive close of 18 incliners, 16 decliners and 1 flat
  • Tuesday’s advance/decline line opened positive at 16 up/ 14 down and 5 flats, stayed positive with 9 incliners, 23 decliners and 3 flats at the mid-day, ending with a positive close of 26 incliners, 6 decliners and 3 flats
  • Monday – sick call with multi-day hospital stay – gall and kidney stones

 

Ebb and flow:

Q4:  November – 3 positive closes

·         October – 12 negative and 10 positive closes

 

Key Metrics:

The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:

  • Friday, the IBB was up +2.54% and the XBI was up +4.69%
  • Thursday, the IBB was up +1.40% and the XBI was up +0.98%
  • Wednesday, the IBB was up +1.35% and the XBI was up +2.13%
  • Tuesday, the IBB was up +0.58% and the XBI was up +1.60%
  • Monday, the IBB was down -0.98% and the XBI was down -2.27%

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Friday was down -0.72 points or -4.60% at 14.94
  • Thursday was down -1.22 points or -7.23% at 15.65
  • Wednesday was down -1.2 points or -7.11% at 16.85
  • Tuesday was down -1.61 points or -8.15% at 18.14
  • Monday was down -1.24 point or -5.71% at 20.48

 

Closing Down (6 of 6):

  • Cellectis SA (CLLS -$0.15 after Thursday’s +$0.37 after Wednesday’s +$1.67 and Tuesday’s -$0.0452),
  • Graphite Bio (GRPH -$0.10 after Thursday’s -$0.06),
  • Solid BioSciences (SLDB -$0.10 after Thursday’s +$0.59),
  • Adverum Biotechnologies (ADVM -$0.0396),
  • Bellicum Pharmaceuticals (BLCM -$0.015 after Thursday’s -$0.0017),
  • Agenus (AGEN -$0.0051),

Flat (1):

  • Sangamo Therapeutics (SGMO $0.00 after Thursday -$0.13),

Closing Up (10 of 28):

  • Alnylam Pharmaceuticals (ALNY +$5.82 after Thursday’s +$4.53),
  • CRISPR Therapeutics CRSP +$4.81 after Thursday’s +$2.43 after Wednesday’s +$4.82),
  • Ionis Pharmaceuticals IONS +$3.46 after Thursday’s -$1.53 after Wednesday’s +$0.99 and Tuesday’s +$0.27),
  • Beam Therapeutics (BEAM +$3.05 after Thursday’s +$0.40 after Wednesday’s -$0.10),
  • Intellia Therapeutics (NTLA +$2.28 after Thursday’s +$0.98 after Wednesday’s +$0.45 and Tuesday’s +$1.22),
  • Ultragenyx Pharmaceuticals (RARE +$2.23 after Thursday’s +$0.56 after Wednesday’s +$0.64 and Tuesday’s +$2.32),
  • Sage Therapeutics (SAGE +$1.73 after Thursday’s -$0.14 after Wednesday’s +$0.97),
  • Verve Therapeutics (VERV +$1.65 after Thursday’s +$2.18 after Wednesday’s -$0.29 and Tuesday’s +$2.63),
  • Vericel (VCEL +$1.33 after Thursday’s +$0.53 after Wednesday’s -$0.18 after Tuesday’s +$0.80),
  • Editas Medicine EDIT +$1.28),

 

Q4/23 – November

  • Friday closed positive with 28 incliners, 6 decliners and 1 flat
  • Thursday closed positive with 23 incliners, 9 decliners and 3 flats
  • Wednesday closed positive with 18 incliners, 16 decliners and 1 flat

 

The BOTTOM LINE: Cell and gene therapy sector recouped many October’s losses …

The sector has seen a rebound Friday, after Thursday and Wednesday — the first, second and third trading days in November — kicking off an often historically strong month for the market.

  • After three major indexes closed with gains after the Fed held interest rates steady at their highest range in 22 years.
  • Attention is turning up the viability of earnings season … share pricing
  • While, U.S. non-farm payrolls data is due out on Friday. A tight labor market is considered a key factor in the outlook for interest rates.
  • A Factoid, “Since 1950, November has been the strongest month of the year for stock gains, as well as the start of both the strongest two-month and six-month period for stocks.” <LPL Research>

 

Roiling markets:

  • Major indexes came off the day's highs at the closing bell but still finished above their 50-day moving averages Friday.
  • Volume on the NYSE was lower and, on the Nasdaq, higher
  • More earnings are coming around the bend
  • Up and down market and past cell and gene therapy activity is reflective of investors sentiment –we be happy as November starts but, as it continues next week?
  • Middle East conflict still weighed on the market as investors assessed the chances of it breaking out into a wider war. The rising geopolitical tensions in the Middle East could drive a global recession, leading investors have warned.
  • I STILL believe the political aspect of the U.S.’s polarization, and disparities of the debt ceilings and rate hike arguments are contributing to the roller coaster ride for share pricing actions.

 

What’s behind the numbers:

  • Markets are convinced the Fed has ended its historic tightening cycle; I am NOT … with the biggest bets now focused on a rate cut in June.
  • Benchmark 10-year notes yields tumbled in the wake of the Fed decision and Powell's press conference, falling 15 basis points for the biggest single-day decline since March.
  • The sector and overall stock market tends to consistently rise and fall over the short-term with alternating volatility and involuntary momentum contraction.
  • I remain EXTREMELY cautious as upcoming earnings may have a more significant negative impact on share price due to missed consensus as estimates will lessen valuations.

 

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

  • The Nasdaq was on track for its sixth (6) straight session in the green while the S&P 500 and the Dow looked set for their fifth (6th) consecutive session of gains.
  • I believe … there will be deceleration in sector pricing gains and economic activity for the next three (3) months also, provided that the Fed has to stay on hold at current levels!
  • Although, the CBOE volatility index (VIX) touched a fresh six-week low, reflecting easing investor anxiety.
  • Interesting fact, to date the Nasdaq has recorded 46 new highs and 62 new lows.

 

The top three (3) performing in the session:

  • Friday: Alnylam Pharmaceuticals (ALNY) – 3x, CRISPR Therapeutics CRSP) – 3x and Ionis Pharmaceuticals (IONS)
  • Thursday: Alnylam Pharmaceuticals (ALNY) – 2x, CRISPR Therapeutics CRSP) – 2x and Verve Therapeutics (VERV)
  • Wednesday: Alnylam Pharmaceuticals (ALNY), CRISPR Therapeutics CRSP) and Cellectis SA (CLLS)
  • Tuesday: Blueprint Medicine (BPMC), Verve Therapeutics (VERV) and Ultragenyx Pharmaceuticals (RARE)
  • Monday: not recorded

The worst three (3) in the session:

  • Friday: Cellectis SA (CLLS), Graphite Bio (GRPH) and Solid Biosciences (SLDB)
  • Thursday: Ionis Pharmaceuticals (IONS), Blueprint Medicine (BPMC) and Sage Therapeutics (SAGE)
  • Wednesday: Verve Therapeutics (VERV), Vericel (VCEL) and AxoGen (AXGN)
  • Tuesday:  Regenxbio (RGNX), Harvard Apparatus GN (HRGN) and Cellectis SA (CLLS)
  • Monday: not recorded

 

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

  • Focus should be on the upcoming quarterly earnings season!

 

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 its 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.