Mid-Morning Look

Monday, June 28, 2021

Major U.S. averages mixed as the Nasdaq Composite trades to all-time highs (again) behind a further push in technology shares and a surge in biotech following upbeat gene editing data this week boosting the group (NTLA). Oil prices slipped (dragging energy stocks lower) on Monday after hitting more than 2-1/2-year highs earlier in the session, as a spike in COVID-19 cases in Asia put a brake on their rally before this week’s OPEC+ meeting. With lower Treasury yields, buying momentum extended after last week’s gains (record highs for Nasdaq and S&P 500), with some all-time highs for MSFT, ADBE, EBAY, NVDA, ADI, INTU, PAYX, MCO, SPGI among them. Few pockets of weakness in the travel/“reopen” industry (cruise lines, airlines, theme parks, casinos) after Hong Kong banned flights from the UK on July 1^st and new COVID restrictions in other parts of the world weighing (Australia lockdowns). Intellia Therapeutics Inc. (NTLA) shares soared after the company reported positive interim data from a Phase 1 clinical study of a gene-editing candidate treatment. Cryptocurrency sector resumes upward momentum after last week’s volatility as Bitcoin back above $34,400 and Ethereum up 8% above $2,000. The Dow Jones Industrial Average underperforms behind weakness in Boeing (BA) as the FAA told the company that its planned 777X is not yet ready for a significant certification step.

Sector Movers Today

·     Gene editing sector top story on the day after NTLA shares surge after the co (and REGN) released interim data from a phase 1 trial of a CRISPR candidate showing the ability to genetically edit cells inside a liver. Chardan raises tgt to $130 from $85 saying data from the 1st phase I trial of a systemic CRISPR therapy, NTLA-2001 in hATTR, demonstrates a clean safety profile and a mean reduction in the circulating TTR biomarker of 87% after a 1-time dosing at 0.3 mg/kg: this is what it looks like when preclinical data translate (CRISPR technology stands for Clustered Regularly Interspaced Short Palindromic Repeats) – shares of other gene editing stocks jumped in reaction including CRSP, EDIT, BEAM, DTIL

·     Transports weak; rental-car industry (CAR) is benefiting from a domestic US travel surge and a vehicle shortage this summer to raise prices; Hertz Global Holdings (HTZGQ) a positive mention in Barron’s saying shares may climb when the company emerges from bankruptcy this week, as it will have a healthy balance sheet with little or no net corporate debt; XL added to membership of Russell 3000® and U.S. small cap Russell 2000® indexes; XPO plans to make registered underwritten offering of 5 mln shares of common stock; airlines also soft despite big weekend TSA checkpoint results (again on travel concerns)

·     Casinos, Gaming, Lodging & Leisure sector; several stocks hit on the day (SIX, SEAS, WYNN, BKNG) after Hong Kong banning flights from the UK on July 1st and new COVID restrictions in other parts of the world weighing (Australia lockdowns); CCL said to sell up to $500M in stock while travel related names seeing pressure early behind new restrictions overseas amid the highly contagious delta variant of Covid-19; SEAS appoints Tom Iven as COO effective today after Walter Bogumil’s employment was terminated effective Jun-27^th

·     Retailers; GME has made it into the Russell 1000 index, FTSE Russell; DBGI Q1 net loss widens to $4.55 per share from $2.87 per share last year due to delays caused by COVID-19 pandemic while saying Q2 results also expected to be adversely impacted; in gun sector, Barron’s positive on SWBI saying the stock is poised to pop as gun sales face more scrutiny, while AOUT ests raised at Lakestreet given the strong outdoor consumer trends; LEVI tgt raised at $36 at UBS on view its capitalizing on the denim category resurgence and also many self-help initiatives undertaken over the past few years

Stock GAINERS

·     ABUS +4%; after it announced the presentation of five abstracts during an international congress by the European Association for the Study of the Liver (announces AB-729 and AB-836 data in chronic hepatitis B virus infection)

·     AVXL +14%; as reports its drug ANAVEX 2-73 meets main and secondary goals of trial to treat for treatment of patients with Parkinson’s disease dementia/says efficacy data will be submitted to U.S. FDA to seek regulatory guidance later this year

·     MSTR +4%; cryptocurrency-exposed stocks climb with Bitcoin and other digital currencies higher as bulls in the market take encouragement in Bitcoin’s failure to breach the $30,000 support level over the weekend after last week’s volatility (MARA, RIOT, COIN active)

·     NTLA +44%; shares surge along with REGN after the co released interim data from a phase 1 trial of a CRISPR candidate showing the ability to genetically edit cells inside a liver (shares of other gene editing stocks jumped in reaction including CRSP, EDIT, BEAM, DTIL)

·     NVDA +4%; shares extend gains trading at record highs amid broad bounce in semiconductors

·     PERI +14%; as raises FY21 revenue view to $410M-$430M from $390M-$410M (est. $400.21M) and raises FY21 adjusted EBITDA view to $49M-$51M from $39M-$41M

·     QADB +77%; to be acquired by Thoma Bravo for $2 Billion with shareholders to Receive $87.50 per share in cash

Stock LAGGARDS

·     BA -3%; as Reuters said the FAA told Boeing that its planned 777X is not yet ready for a significant certification step/FAA warns it “realistically” will not certify the airplane until mid- to late-2023

·     BKNG -2%; dropping well below its 100-day MA of 2,317 now along with other transports, reopen names amid the broader UK virus vaccine fear concern

·     CCL -5%; said to sell up to $500M in stock, while travel related names seeing pressure early behind new restrictions overseas amid the highly contagious delta variant of Covid-19

·     CVM -28%; after mixed results from its nine-and-a-half-year pivotal Phase 3 study for its immunotherapy Multikine leukocyte interleukin injection in the treatment of advanced primary squamous cell carcinoma of the head and neck.

·     DBGI -8%; Q1 net loss widens to $4.55 per share from $2.87 per share last year due to delays caused by COVID-19 pandemic while saying Q2 results also expected to be adversely impacted

·     EXEL -20%; and biopharma company Ipsen say interim analysis shows combination of Exelixis’ Cabometyx and Roche Holding AG’s atezolizumab did not meet one of the main goals of a late-stage study in patients with previously untreated liver cancer

·     HAL -4%; broad weakness in energy stocks this morning amid profit taking (shares of SLB, DVN, BKR, EOG, MRO, NOV among top decliners in the S&P)

·     SPCE -2%; pullback after having risen 38% Friday after receiving regulatory approval to fly customers into space – Bernstein had said the license was an important regulatory hurdle, although they did not find it a major surprise

·     XPO -6%; said plans to make registered underwritten offering of 5 mln shares of common stock