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Day#2 – government shutdown, exchanges falter and sector migrates

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What happened to never, never or never ever – will we burn our own house down?

Even if the shutdown issue is resolved, investors will have a bigger hurdle to jump when the Treasury Department will exhaust its borrowing limit on Oct. 17. Unless Congress votes to raise the debt ceiling, the U.S. will default on its debt for the first time ever.

 

But, how does it affect the RegMed sector … the NIH, FDA and DOID approval and funding sources will DRY up and more … because these issues have, I believe has NOT been priced into the universe!  Importantly, we are done with Q3, so there will be no impact on earnings at least not for this reason. But the longer this goes on, contract awards could be delayed, and funds will not be appropriated.

For now, markets seem to believe that this shutdown will cause only minor disruption and will, at the very least, not worsen the debt ceiling negotiations.

Any RegMed sector news or sentiment is dwarfed by the Washington headlines grabbing events. Fortunately or unfortunately, should any of these uncertainties fuel additional market pullback in the near term, I don’t <fully> believe these dips could or might … represent buying opportunities for investors. My focus goes back to … milestones and catalysts, cash burn and news “content” to drive appreciation.

Watch the charts, ignore the “noise” that will continue to dominate the news and hopefully be prepared to profit while others are panicking. Just because the government shutdown does not mean you should shut down your sector portfolio.

RegMed stocks migrated in the early movers <22 reds> to mid-day <23> losses on the 2nd trading day of the month and quarter, with an equal number of RegMed equities in negative territory <23> at the close.

 

Who’s HOT to this day to name a few … AxoGen (AXGN), BioLife Solutions (OTC: BLFS), Cellular Dynamics (ICEL), Geron (GERN), ImmunoCellular (NYSE MKT: IMUC), Medistem (PINK: MEDS), Northwest Bio (NWBO), Opexa (OPXA), Osiris (OSIR), Pluristem (PSTI), Sangamo (SGMO), Verastem (VSTM) and Wright-Medical (WMGI) and even, surprisingly Aastrom (ASTM) with a “barely” - $0.007.

Who’s DOWN: Some of my favorites … Athersys (ATHX), Cytori (CYTX), Harvard Bio (HBIO), NeoStem (NASDAQ: NBS),  and the rest of the universe’s children …

 

The day job:

  • Early movers were NEGATIVE with 22 red (downs), 14 green (ups), and 7 black (flats).
  • Mid-day was NEGATIVE with 23 red (downs), 17 green (ups), and 5 black (flats).
  • Closing Bell was NEGATIVE with 23 red (downs), 14 green (ups), and 3 black (flats).

 

In the broader market … stocks reversed the previous session's gains to trade sharply in the red Wednesday, with most key S&P sectors lower, on mounting worries that the ongoing budget battle in Washington could eventually lead to a failure to raise the country's borrowing limit.

The NASDAQ was DOWN -2.96 or -0.08% to 3,515.02 while the DOW was also DOWN -58.56 or -0.39% to close at 15,133.14.  The CBOE VIX volatility index jumped above 16.

- See more at: http://www.scimitarequity.com/articles/day2-government-shutdown-exchanges-falter-and-sector-migrates#sthash.quKAXg3D.dpuf

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