April 15, 2020 8:45am

Volatility, quarterly earnings and implausible bets on the virus infection peaks, death rate curves and unknowns which means there’s more trades developing

News: Athersys (ATHX) the U.S. FDA has authorized an Investigational New Drug (IND) application to initiate a P2 clinical trial evaluating MultiStem® cell therapy targeting the severe inflammatory responses associated with poor outcomes.

Sector intel, ideas, fact-based opinions and Insight from a volatile climate and the extenuating factors of share pricing! Check the BOTTOM LINE against my motto of “never leaving an investor uninformed.” <read more>

Dow future are DOWN -2.04% (-486 points), S&P futures are DOWN -2.31% (-66 points) and NASDAQ futures are DOWN -1.71% (-148 points)

 

Stock futures were lower as weak earnings, tumbling oil prices stymie’s yesterday’s rally and March’s economic indicators were negative as expected;

European markets traded lower as some countries have started to lift restrictions gradually restarting their economy as the pan-European Stoxx 600 fell negative -1%;

Asia Pacific market fell as the economic impact of the coronavirus pandemic continued to weigh on investor sentiment; markets in South Korea were closed on Wednesday as the country heads to the polls for legislative elections., Mainland China, Australia fell as the MSCI Asia ex-Japan index dipped negative -0.12%

 

Data docket: Retail sales for March plunged -8.7%, the April Empire State Index bottomed with negativity forecassted, while March industrial production and capacity utilization are set for release at 9:15 a.m. ET. The Federal Reserve’s so-called beige book report, a compilation of anecdotes on economic activity, is due at 2 p.m. ET.

 

Henry’omics:

Stock-index futures lost ground Tuesday, pointing to a pullback from the previous session’s strong gains, as investors weigh economic indicators, gauge corporate earnings reports and continue to watch for signs the COVID-19 pandemic is peaking as infections and deaths continue.

I believe misplaced optimism …

 

The BOTTOM LINE: what’s changed – is there any blue sky to be seen in a deep forest? Any rally will give way to renewed selling pressure as the damage to the economy from lockdowns becomes apparent and uncertainty about the shape of the economic recovery remains.

  • A dream about recovery will NOT return share pricing to pre-virus levels for months or quarters.

 

Tuesday night’s title: “the velocity and strength of pricing needle moves dramatically due to capricious optimism while the health situation remains very bad in absolute term.’

  • The NASDAQ closed UP +323.32 (+3.95%);
  • The IBB closed up +3.63% and XBI also closed up +4%;
  • The CBOE Volatility Index (VVIX: INDEX) tracked down -3.41 points or -8.28% at 37.76;
  • Tuesday closed positive at 31/4 of the 35 covered companies;
  • The 31-upside were +1.44% (ALNY) to +12.98% (CLLS) while the 4-downside ranged from -2.28% (SAGE) to -12% (BSTG);
  • 10 out of the 31-upside had higher than the 3-month average volume;
  • 3 out of the 4-downside had higher than the 3-month average volume;

Q2:

  • April registered 4 negative, 5 positive closes and 1 holiday.

Q1:

  • March registered 11 negative, 10 positive closes and 1 neutral close.
  • 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:

When you’re on a roller coaster, the only thing you can be sure of is you’ll end up back where you started.

News on Athersys (ATHX) – continued, A frequent complication following trauma is the occurrence of Systemic Inflammatory Response Syndrome (SIRS), which can contribute to organ failure or other severe complications. MultiStem has shown promise in reducing the hyperinflammatory response that occurs in a range of situations, by upregulating key reparative mechanisms that may reduce complications and meaningfully improve patient recovery.

 

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.