January 31, 2024 4:45pm

A Fed message of consistence, confirmation and sustainability on the final trading session of January that held interest rates unchanged

Investors crave share pricing explanations because they give us an illusion of portfolio control

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Yet again, with NO slight sigh of relief, I qualify the sector’s equity’s movement; with an emphasis on which company is gaining or losing stride in “our” portfolio in the short-term

It’s not hard to be right so often, it’s about refining expectation, defining insight and NOT being indentured to ANY financial institution!

 

Wednesday: The Dow closed DOWN -317.01 points or -0.82%, the S&P closed DOWN -79.32 points -1.61% while the Nasdaq closed DOWN -345.89 points or -2.23%

 

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 slipped and tripped in a volatile session as the Fed kept rates unchanged and said it wasn’t quite ready to start cutting rates yet.

The Fed “did do something traders wanted, which is remove the part of the statement that signaled the central bank still had a tightening bias. The Fed removed a phrase that referred to “additional policy firming.” <CNBC>

Treasury yields fell on the day following the Fed’s actions with the 10-year Treasury yield cracked 4%.

Economic Data Docket: Companies added 107,000 workers in the first month of 2024, off from the downwardly revised 158,000 in December, ADP reported Wednesday. Leisure and hospitality reported the biggest increase, with an addition of 28,000 workers, while trade, transportation and utilities added 23,000, and construction rose by 22,000. The release comes two days ahead of the Labor Department’s nonfarm payrolls report, which is expected to show growth of 185,000.

 

Wednesday’s RegMed Investors’ (RMi) pre-open: “perspective draws on a weak pre and aftermarket. The meanings of perspective have something to do with looking at how the Fed addresses its willingness to keep raising interest rates” … https://www.regmedinvestors.com/articles/13307  

 

Advance/Decline (A/D) Line:

Wednesday’s advance/line lines at the open was negative with 13 incliners, 19 decliners and 3 flats; ending with a negative close of 8 incliners, 26 decliners and 1 flat

 

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

Q1/24: 2 holiday, 12 negative and 8 positive closes

 

Key Metrics:

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

  • Wednesday, the IBB was down -1.61% and the XBI was down -1.42%

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Wednesday was up +1.26 point or +9.47% at 14.57

 

Wednesday’s Closing Down (10 of 26):

  • Alnylam Pharmaceuticals (ALNY -$7.31 after Tuesday’s -$0.84 and Monday’s +$1.34),
  • Blueprint Medicine (BLMC -$3.99 after Tuesday’s-$1.53 after Monday’s +$3.49),
  • CRISPR Therapeutics (CRSP -$1.53 after Tuesday’s -$1.30 and Monday’s +$4.77),
  • Beam Therapeutics (BEAM -$1.44 after Tuesday’s -$2.45 and Monday’s +$4.00),
  • Vericel (VCEL -$1.28),
  • Solid Biosciences (SLDB -$1.19 after Tuesday’s +$0.12 and Monday’s -$0.02),
  • Intellia Therapeutics (NTLA -$0.77 after Tuesday’s -$1.59 and Monday’s +$1.50),
  • Ultragenyx Pharmaceuticals (RARE -$0.77 after Tuesday’s -$1.11 after Monday’s +$1.02),
  • Ionis Pharmaceuticals (IONS -$0.51),
  • Prime Medicine (PRME -$0.44 after Tuesday’s -$0.70 and Monday’s +$0.96),

Flat (1):

  • Harvard Apparatus GN (HRGN)

Wednesday’s Closing Up (8 of 8):

  • Fate Therapeutics (FATE +$0.58),
  • Regenxbio (RGNX +$0.15 after Tuesday’s -$0.80),
  • AxoGen (AXGN +$0.15),
  • Caribou Biosciences (CRBU +$0.06 after Tuesday’s +$0.08 and Monday’s +$0.53),
  • Cellectis SA (CLLS +$0.05),
  • Agenus (AGEN +$0.0337),
  • Homology Medicine (FIXX +$0.0098),
  • Bellicum Pharmaceuticals (BLCM +$0.0046),

 

Q1/24 – January

  • Tuesday closed positive with 21 incliners, 13 decliners and 1 flat
  • Wednesday closed negative with 4 incliners, 31 decliners and 0 flat
  • Thursday closed positive with 23 incliners, 11 decliners and 1 flat
  • Friday closed negative with 11 incliners, 21 decliners and 3 flats
  • (1/29) Monday closed positive with 31 incliners, 4 decliners and 0 flat
  • Tuesday closed negative with 4 incliners, 29 decliners and 2 flats
  • (1/31) Wednesday closed negative with 8 incliners, 26 decliners and 1 flat
  • (1/16) Tuesday closed negative with 9 incliners, 25 decliners and 1 flat
  • Wednesday closed negative with 6 incliners, 29 decliners and 0 flat
  • Thursday closed negative with 10 incliners, 25 decliners and 0 flat
  • Friday closed positive with 21 incliners, 13 decliners and 1 flat
  • (1/22) Monday closed positive with 28 incliners, 7 decliners and 0 flat
  • Monday was market holiday
  • Friday closed negative with 13 incliners, 21 decliners and 1 flat
  • Thursday closed negative with 8 incliners, 26 decliners and 1 flat
  • Wednesday closed negative with 14 incliners, 21 decliners and 0 flat
  • Tuesday closed negative with 14 incliners, 18 decliners and 3 flats
  • (1/8) Monday closed positive with 28 incliners, 6 decliners and 1 flat
  • Thursday closed positive with 22 incliners, 12 decliners and 1 flat
  • Wednesday closed negative with 6 incliners, 29 decliners and 0 flat
  • (1/2) Tuesday closed positive with 21 incliners, 14 decliners and 0 flat

 

The BOTTOM LINE … My advice: keep opening that portfolio envelope and think of a game of monopoly and follow RMi’s moves to gain profitable moves or recoup losses. As I have stated, “What goes up with ceremony, goes down with disdain followed by the opposite effect”.

  • Today, the Fed answers coming policy becoming semi-evident if at all!
  • When it comes to short-term investing or trading; the trend is NOT your friend. There's no denying a profitable strategy as the sustainability of a trend to profit seems easier this January after Q4’s movement.  
  • Jumps and following dumps lately has become a routine.
  • The cell and gene therapy sector is still reacting to January’s dips and NOT even correcting to what happened in Q4 last year.

 

Geo-political risk jumps: The Biden administration has limited its previous retaliation to over 165 attacks by Iran-supported militias on U.S. forces and a drone attack killed three U.S. troops in Jordan.

 

Reiterating … again, “the cell and gene therapy sector continues to “recalibrate” its share pricing expectations and I don't think this … adjustment is completely over.”

  • Earnings and guidance are beginning 2/5 as Alnylam Pharmaceuticals (ALNY) and Sage Therapeutics (SAGE) on 2/14 announcing Q4 and FY23 which WILL be crucial to continue downside force in the sector as history has taught us i.e., investors.

 

Today’s business news affecting “our” universe:

U.S. stocks veered lower after the Fed news conference

  • The three major U.S. stock indexes were weighed down by weakness in tech and tech-adjacent stocks the day after disappointing.

Fed meeting release does NOT signal when they will begin cutting rates:

  • As the Fed Chair Powell said a March rate cut is “not the most likely.”
  • "Inflation has eased ... but remains elevated" - Fed Statement
  • As expected, the Federal Open Markets Committee (FOMC) left its key policy rate unchanged at 5.25%-5.50% against a backdrop of gradually cooling inflation and a resilient economy.

The top three (3) performing in the session:

  • Wednesday: Fate therapeutics (FATE), Regenxbio (RGNX) and AxoGen (AXGN)
  • Tuesday: Solid Biosciences (SLDB), Caribou Biosciences (CRBU) and Brainstorm Cell Therapeutics (BCLI)
  • Monday: CRISPR Therapeutics (CRSP), Beam Therapeutics (BEAM) and Blueprint Medicine (BLMC)

The worst three (3) in the session:  

  • Wednesday: Alnylam Pharmaceuticals (ALNY), Blueprint Medicine (BLMC) and CRISPR Therapeutics (CRSP)
  • Tuesday: Beam Therapeutics (BEAM), Intellia Therapeutics (NTLA) and Blueprint Medicine (BLMC),
  • Monday: Graphite Bio (GRPH), Solid Biosciences (SLDB) and Homology Medicine (FIXX)

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 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.