Morning Brief – March 22, 2022

By Editor•

Biotech stocks have been a disaster so far.

Since the year began, the iShares NASDAQ Biotech ETF (IBB) fell from $155 to $129.  The ProShares Ultra NASDAQ Biotech (BIB) fell from about $80 to $54.  The SPDR Biotech ETF (XBI) fell from $116 to $80.  However, it appears the bottom may be in.

Even pharmaceutical stocks are on the move again.

“There are more and more pharmaceutical charts breaking out to new highs in a tape that saw plenty of bear market moves from individual names,” said KM Partners’ chief market technician, JC O’Hara, as noted by MarketWatch. 

We also have to consider that millions of retiring baby boomers are not only exploring new ways to stave off signs of aging, they are looking to postpone health-related decline and even death.

In addition, we’re seeing countless mergers and acquisitions.  

In fact, analysts expect to see a rebound in M&A activity in coming months.  

According to The Healthcare Technology Report:

“Notable players such as Pfizer, Novartis, and Merck & Co. seem to have their sights set on high-profile acquisitions. Merck has expressed a desire to buy out Mirati Therapeutics, while Pfizer might leverage its $175 billion purse for late-stage assets in a far-sighted quest to lift 2030 revenue by $25 billion. Novartis hopes to string along a grouping of smaller biotechs with a portion of the $154 billion in its coffers. Johnson & Johnson, with a new CEO at its helm, is doing away with its consumer health unit and plotting a ‘more aggressive’ 2022.”

In short, investors may want to buy the weakness here.

Markets

  • The Dow is up 156 points to 34,592
  • The S&P 500 is up 12 points to 4,464.12
  • The NASDAQ is up 16 points at 14,386.75
  • Gold prices are down $7.60 at $1,928
  • Bitcoin is up about 4% to $42,932.70
  • Oil prices are down about 51 cents to $111.60
  • The VIX is down slightly to 23.25

 

Trading Tips

Higher inflation has been rough on us all.

And unfortunately, it could get worse.

With surging costs for gas, food, and housing, consumer inflation soared 7.9% year over year.

That’s the biggest spike we’ve seen in 40 years.

While the Federal Reserve once referred to inflation as transitory, they’re quickly realizing just how wrong they were. Even Allianz Chief Economic Advisor Mohamed El-Erian has said, “The characterization of inflation as transitory is probably the worst inflation call in the history of the Federal Reserve, and it results in a high probability of a policy mistake.”

Nowadays, the Fed realizes it has to be far more aggressive against inflation.

So, how do we profit from that?  Read more here. 

Insider Buying – Desktop Metal (DM)

Keep an eye on Desktop Metal (DM). 

After dropping from a recent high of $9 to a low of $3.42, the stock is trying to push higher.  Helping, CEO Ric Fulop recently bought 128,850 shares for about $526,000.  

Earlier this month, as noted by TheFly.com, DM noted, “With record total revenue, organic revenue, and gross margins, the fourth quarter was an exceptional finish to a revolutionary year for Desktop Metal. We also recently commenced shipments of our flagship Production System P-50, a major milestone for Desktop Metal and the additive manufacturing industry.”