April 3, 2020 8:53am

Low volume moved the needle of a rebound as share pricing and supporting valuation drifted; even after multiple pullbacks as markets and “our” universe experience an unstable start to Q2

Pre-open indications: 6 possible BUYs and 3 SELLs into strength

News: Fate Therapeutics (FATE) iPSC product platform collaborated with JNJ’s Janssen’s proprietary tumor-targeting antigen binders to create novel CAR NK and CAR T-Cell product candidates. FATE gets a $50 million upfront payment and $50 million equity investment, plus full funding for R&D through an IND filing. BrainStorm Cell Therapeutics (BCLI) has been awarded a new grant of $1.5 million by the Israel Innovation Authority (IIA).  <read more>

Who do you call for “share side” assistance?  It’s not AAA … try RMi

 

Dow future are DOWN -1.01% (-215 points), S&P futures are DOWN -0.82% (-21 points) and NASDAQ futures are DOWN -0.76% (-58 points)

 

U.S. stock indexes futures pointed to a lower open;

European markets were slightly lower as the pan-European Stoxx 600 fell by -0.3%;

Asian markets were flat-lining after oil prices experienced their biggest one-day surge; but crude futures retraced some of their gains by its afternoon trade.

 

Data docket:  March jobs reported nonfarm payrolls in the U.S. decline by 701,000 in March and the unemployment rate rose to 4.4% after the U.S. government reported weekly jobless claims shot up by 6.6 million in the week of March 27. IHS Markit PMIs are also set for release at 9:45 a.m. ET. These numbers end a nine (9) year run of economic numbers and job losses are extremely high and waiting for the next round of the potential of a 20% unemployment rate.

 

Henry’omics:

The major indexes were headed for their third (3rd) weekly loss out of four (4) even after the Dow and S&P 500 rallied more than 2% each on Thursday. Entering Friday’s session, the Dow is down -1% while the S&P 500 has slipped -0.6%.

Both the Dow and S&P 500 remain more than 25% below their respective all-time highs set in February as jitters over the spread of COVID-19 foster volatile trading

Markets have experienced a shaky start to the Q2 this week as investors continue to GUESS the possibilities and ramifications of extensive lockdowns and the persistent spread of the virus, along with the fiscal and monetary measures being deployed by governments and central banks to mitigate the crisis.

 

The BOTTOM LINE: TGIF, I cringe when I read about a possible V-shaped recovery – get real, we are going to have at least 20% unemployment if not more and there will be no fast recovery with that many people out of work.

  • In the U.S., Fitch Ratings expects the lockdowns to result in an unprecedented GDP decline of 7% to 8% in Q2/2020, or 28% to 30% on an annualized basis;

So, I am starting early preparing for another depressing market close by marinating stuffed olives in a potato derived intoxicant while chilling the glass.

 

Thursday night’s title: “What is not priced in? Uncertainty reflecting the unknowns, the when of the infection curve flattening, the why of fundamentals being back as a measurement tool and to what extent will volatility disappear as unemployment and business closure not being measured as a liability?”

  • the NASDAQ closed UP +126.73 points (+1.72%);
  • the IBB closed up +3.77% and XBI also closed up +3.64%;
  • Thursday volatility was down -6.15 points or -10.78% at 50.91;
  • range of the 23-upside was +0.24% (BLUE) to +10.41% (FIXX) while the 10-downside ranged from -0.32% (ALNY) to -31.16% (ATHX);
  • 2 out of the 23-upside had higher than the 3-month average volume;
  • 4 out of the 10-downside had higher than the 3-month average volume;

 

Q2:

  • April registered 1 negative and 1 positive closes

Q1:

  • March registered 11 negative, 1 neutral and 10 positive closes
  • February registered 9 negative, 9 positive closes, 3 vacation days and 1 holiday.
  • January registered 9 negative, 10 positive closes and 2 holidays.

 

Companies in my headlights – It’s your decision; I provide an idea and context:

Trader targets to SELL into strength and volume:

  • Ultragenyx (RARE) after five (5) sessions with a $7.68 or +15.4% upside;
  • Alnylam Pharmaceuticals (ALNY) closed down -$0.33 to $104.21 and has a negative aftermarket indication of -$1.11 or -1.07% and a positive 14.31% 52-week change;
  • Verastem Oncology (VSTM) closed up +$0.11 to $2.59 and has a negative -$0.13 or -5.02% aftermarket indication.

 

Possible targets to BUY:

  • bluebird bio (BLUE) closed up +$0.10 to $42.61 and has a positive +$0.09 or +0.21%aftermarket indication;
  • Sage Therapeutics (SAGE) closed flat at $26.75 and has a positive +$0.25 or +0.93% aftermarket indication and has been down four (40 sessions;
  • CRISPR Therapeutics (CRSP) closed up +$1.01 or +2.62% to $39.51 and has a positive +$0.29 or +0.73% aftermarket indication also has a 52-week low of $32.30 and a 52-week high of $74.00;
  • Vericel (VCEL) closed up +$0.11 or +1.29% to $8.62 and has a positive +$0.08 or +0.93% aftermarket indication. On 3/26, VCEL traded at $10.04 having traded 3/2 at $15.36 with a 52-week change of -50.81% - oversold;

 

BUY on News:

Fate Therapeutics (FATE) announced a global collaboration and option agreement with Janssen Biotech, Inc. (Janssen), one of the Janssen Pharmaceutical Companies of Johnson & Johnson. Under the multi-year collaboration agreement, Janssen will contribute proprietary antigen binding domains for up to four tumor-associated antigen targets. The Company will apply its iPSC product platform to research and preclinically develop new iPSC-derived chimeric antigen receptor (CAR) NK and CAR T-cell product candidates. The Company will receive $50 million in cash and $50 million from the purchase by Johnson & Johnson Innovation – JJDC, Inc. of newly issued shares of the Company’s common stock at a price per share of $31.00. Janssen will also reimburse the Company for all activities conducted under the collaboration.

BrainStorm Cell Therapeutics (BCLI) has been awarded a new grant of approximately $1.5 million by the Israel Innovation Authority (IIA).  The grant enables Brainstorm to continue development of advanced cellular manufacturing capabilities, furthers development of MSC-derived exosomes as a novel therapeutic platform, and will ultimately enable Brainstorm to expand the therapeutic pipeline in neurodegenerative disorders.

 

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.