November 25, 2023 3:42pm

A rolling log of the week with what went on and its direct consequences as even I needed a break to enjoy the holiday, friends and family

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Pre-Open Indications: 6 Hits and 1 Miss

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The short Thanksgiving week in review

After careful examination of the sector and breathe trends, I STILL come away more cautious. Having lived through the rise and multiple declines of “our” universe’s stock price, investors must be better informed on what fluctuating economics and markets can do to an equity, or what impact indications or expectations can have.

We're in a period of sector rotation, and people are trying to figure out what cell and gene therapy sector equities at are going to continue to do well and what are the stocks that are going to suffer.

 

Friday: The Dow closed UP +117,12 points or +0.33%, the S&P closed UP +2.72 points or +0.06% while the Nasdaq closed DOWN -15 points or -0.11%

Thursday: Thanksgiving

Wednesday: The Dow closed UP +184.74 points or +0.53%, the S&P closed UP +18.43 points or +0.41% while the Nasdaq closed UP +65.88 points or +0.46%

Tuesday: The Dow closed DOWN -62.75 points or -0.18%, the S&P closed DOWN -9.19 points or -0.20% while the Nasdaq closed down -84.55 points or -0.59%

Monday: The Dow closed UP +203.76 points or +0.58%, the S&P closed UP +33.36 points or +0.74% while the Nasdaq closed UP +159.05 points or +1.13%

 

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 …

  • Friday: Indexes were mixed as the major averages aimed for a four-week winning streak.
  • Thursday: Holiday
  • Wednesday: Indexes jumped Wednesday after yields briefly fell to their lowest level in two months, and the November market rally broadened into the Thanksgiving holiday.
  • Tuesday: Equities slid on Tuesday as traders assessed the latest Fed meeting minutes, where officials gave no indication of interest rate cuts.
  • Monday: Indexes jumped Monday to start a holiday shortened week …

 

Friday’s Pre-open Indications: 6 Hits < Beam Therapeutics (BEAM +$0.20), Intellia Therapeutics (NTLA +$0.77), Verve Therapeutics (VERV +$0.08), Caribou Biosciences (CRBU -$0.03), Alnylam Pharmaceuticals (ALNY +$0.04), Ultragenyx Pharmaceuticals (RARE +$0.93)> 1 Miss < Prime Medicine (PRME +$0.05)>

 

Economic Data Docket

Friday: S&P Global released its Composite Purchasing Managers' Index (PMI) just after the market open Friday. The manufacturing index dipped to 49.4 in November, with the services index rising to 50.6.

Thursday: holiday

Wednesday: The University of Michigan’s Consumer Sentiment Index rose slightly last month, indicating that consumers remain positive despite a slowdown, according to Commonwealth Financial Network.

Tuesday: Beyond housing today, our November TRE weekly raw index of retailer sales which correlates to monthly comps came in at 1% for the first 3 weeks of November -- mostly in line with 2019 levels -- suggesting a more normalized setup into the holiday season. Existing home sales declined by 4.1% in October below expectations (consensus -1.5%) but our economists left our 4Q GDP tracking estimate unchanged. Fed gave no indication of possible rate cuts at last meeting, minutes show

Monday: None

 

 

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

  • Friday’s advance/decline line was positive with 30 incliners, 2 decliners and 3 flats at the open, the mid-day continued positive with 27 inclined, 7 decliners and 1 flat, ending with an early and abbreviated positive close of 27 incliners, 7 decliners and 1 flat
  • Thursday: Thanksgiving
  • Wednesday’s advance/decline line was positive with 18 incliners, 13 decliners and 4 flats at the open, the mid-day continued positive with 20 incliners, 15 decliners and 0 flat, ending with a positive close of 20 incliners, 13 decliners and 2 flats
  • Tuesday’s advance/decline line was negative with 5 incliners, 29 decliners and 1 flat at the open, the mid-day continued negative with 8 declined, 27 incliners and 0 flat, ending with a negative close of 7 incliners, 27 decliners and 1 flat
  • Monday’s advance/decline line was positive with 27 incliners, 7 decliners and 1 flat at the open, the mid-day continued positive with 26 declined, 8 incliners and 1 flat, ending with a positive close of 30 incliners, 5 decliners and 0 flat

 

Ebb and flow:

Q4:  November – 10 positive and 7 negative 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 +0.54% and the XBI was up +1.18%
  • Thursday: Thanksgiving
  • Wednesday, the IBB was up +0.64% and the XBI was up +1.08%
  • Tuesday, the IBB was down -0.80% and the XBI was down -2.03%
  • Monday, the IBB was up +0.69% and the XBI was up +1.17%

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Friday was down -0.34 point or -2.66% at 12.46
  • Thursday: Thanksgiving  
  • Wednesday was down -0.48 point or -3.60% at 12.87
  • Tuesday was down -0.08 point or -0.60% at 13.33
  • Monday was down -0.38 point or -2.75% at 13.42

 

Friday’s Closing Down (7 of 7):

  • CRISPR Therapeutics (CRSP -$0.52 after Thanksgiving, Wednesday’s +$2.92, Tuesday’s -$4.61 and Monday’s +$4.29),
  • Voyager Therapeutics (VYGR -$0.05),
  • Bellicum Pharmaceuticals (BLCM -$0.034),
  • Caribou BioSciences (CRBU -$0.03 after Thanksgiving and Wednesday’s +$0.39),
  • Fate Therapeutics (FATE -$0.03 after Thursday and Wednesday’s -$0.06),
  • Mesoblast (MESO -$0.01),
  • Brainstorm Cell Therapeutics (BCLI -$0.0077),

Flat (1):

  • Compass Therapeutics (CMPX)

Closing Up (10 of 27):

  • Blueprint Medicine (BPMC +$1.44 after Thanksgiving, Wednesday’s +$0.71, Tuesday’s +$0.42 and Monday’s +$2.22),
  • Ultragenyx Pharmaceuticals (RARE +$0.93 after Thursday, Wednesday’s -$0.63, Tuesday’s -$0.51 and Monday’s -$0.62),
  • Intellia Therapeutics (NTLA +$0.77 after Thursday and Wednesday’s +$1.80, Tuesday’s -$1.82 and Monday’s +$2.16),
  • BioLife Solutions (BLFS =$0.51 after Thanksgiving, Wednesday’s -$0.06, Tuesday’s +$0.22 and Monday’s +$0.64),
  • Regenxbio (RGNX +$0.37 after Thursday, Wednesday’s -$0.77, Tuesday’s -$0.13 and Monday’s +$0.54),
  • Ionis Pharmaceuticals (IONS +$0.25 after Thursday, Wednesday’s +$0.54, Tuesday’s -$0.63 and Monday’s +$0.70),
  • Beam Therapeutics (BEAM +$0.20 after Thanksgiving, Wednesday’s +$1.52, Tuesday’s -$2.81 and Monday’s +$3.29),
  • Vericel (VCEL-+$0.17 after Thursday, Wednesday’s +$0.39 and Tuesday’s -$0.79)
  • Solid Biosciences (SLDB +$0.16),
  • bluebird bio (BLUE +$0.10)

 

Q4/23 – November

  • Friday closed early and positive with 27 incliners, 7 decliners and 1 flat
  • Thursday: holiday 
  • Wednesday closed positive with 20 incliners, 13 decliners and 2 flats
  • Tuesday closed negative with 7 incliners, 27 decliners and 1 flat
  • Monday closed positive with 30 incliners, 5 decliners and 0 flat

 

The BOTTOM LINE: The Dow and S&P 500 show small gains, but the Nasdaq dropped back slightly in a shortened day of trading after Thanksgiving. Still, the major averages moved up for a fourth straight week.

  • For the week, the Dow was up 1.3%, with the S&P 500 adding 1% and the Nasdaq rising 0.9%. Since October 30 when stocks bottomed after a pullback from highs last summer, the Dow is up 7.1%. The S&P has risen 8.7%, and the Nasdaq has jumped nearly 11%.
  • Algorithmically driven strategies are driving the upside… I believe!
  • As markets were subdued on Friday in a shortened trading session for Thanksgiving, while investors focused on retailers to assess consumer health as Black Friday sales kicked off amid signs of slowing economic conditions.
  • While sentiment remained largely upbeat – today as investors continued to focus on the narrative that inflation is waning significantly, which should allow the Fed to stop raising interest rates and perhaps even cut borrowing costs multiple times next year. <Barron’s>

 

Next week's most anticipated data include the Commerce Department's second estimate on Q3 gross domestic product (GDP) on Thursday, followed on Friday by its wide-ranging Personal Consumption Expenditures (PCE) report, which will provide further clues on the extent of the Fed's rate-hike impact.

 

I believe, “market and sector DOWNSIDE realities are inevitability as uncertainty remains under the surface.”

  • As, interest rates moved up slightly, with the 10-year Treasury yield at 4.47%. Oil prices were lower again. West Texas Intermediate finished at $75.54, down $1.56. The AAA National Average gasoline price was off slightly at $3.265 a gallon. It is off in 65 of the last 67 days.
  • Investors can thank continued signs that the economy is chugging along while inflation comes down markedly, a trend that should allow the Fed to stop its most dramatic cycle of interest-rate hikes in a generation. Traders see a 25% chance that the Fed will cut rates as soon as March, with the odds of a rate cut rising above 50% by May, according to the CME FedWatch Tool. <Barron’s>

 

While many cell and gene therapy sector upsiders are UP, I believe … also extended; it’s usually a signal to lighten the load of the sector’s upside movers.

I have concerns over the resiliency of upside moves that usually end in downward sells as the risk/reward profile doesn’t always compel elevated and “dramatic” i.e., sudden equity pricing.

 

What’s behind the numbers:

  • The only key economic data due Friday did little to move the needle for stocks or bonds, with preliminarily purchasing-managers’ indexes (PMIs) covering services and manufacturing coming in close to economists’ expectations. The manufacturing PMI for November was 49.4, a three-month low and below expectations of 50.2 among economists surveyed by FactSet. When it comes to PMIs, any number 50, or above signals growth, while a print below 50 indicates contraction. The services PMI for November was 50.8, a four-month high and just above expectations of 50.7. The yield on the 10-year U.S. Treasury bond ticked higher to 4.47% Friday morning. On Wednesday, the benchmark settled at 4.41%. <Barron’s>
  • The sector and overall stock market tends to consistently rise and fall over the short-term with alternating volatility and involuntary momentum contractions.

 

It's time to think ahead to December. It's usually an important month for the Nasdaq.

  • Don’t FORGET portfolio tax selling and a bit of rebalancing
  • And then comes January and with worries that the U.S. economy will be slowing down, the potential for continued Middle East violence and, of course, the real prospect of bitterly contested elections across all of the United States. <The Street>

 

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

  • I believe … there will be deceleration in sector pricing gains and economic activity for the remaining weeks of 2023.

 

The top three (3) performing in the session:

  • Friday: Blueprint Medicine (BPMC) -2x, Ultragenyx Pharmaceuticals (RARE) and Intellia Therapeutics (NTLA)
  • Thursday: holiday
  • Wednesday: vacation day
  • Tuesday: Blueprint Medicine (BPMC) -2x, BioLife Solutions (BLFS) and Mesoblast
  • Monday: CRISPR Therapeutics (CRSP), Beam Therapeutics (BEAM) and Blueprint Medicine (BPMC)  

The worst three (3) in the session:

  • Friday: CRISPR Therapeutics (CRSP), Voyager Therapeutics (VYGR) and Bellicum Pharmaceuticals (BLCM)
  • Thursday: holiday
  • Wednesday: vacation day
  • Tuesday: CRISPR Therapeutics (CRSP), Beam Therapeutics (BEAM) and Intellia Therapeutics (NTLA)
  • Monday: Ultragenyx Pharmaceuticals (RARE), Solid BioSciences (SLDB) and Harvard Apparatus GN (HRGN)

 

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 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.