Stocks Close On All-Time Highs; Oil Hangs In; Acadia Pharmaceuticals (ACAD) Potential Blockbuster Stock
Well, it is bitterly cold here as I write this note with the temperature around 10 degrees, and a windchill factor of -14 degrees. Stocks closed at an all-time high on Friday, headed into a three-day weekend — which usually portends more gains to come. If traders and institutions had been nervous being in a long position heading into a three-day weekend, there would have been the opposite reaction; but instead, we got buying into the close — usually, a very bullish sign.
“A confluence of factors, both geopolitical and fundamental, helped global markets rise, not just in the U.S.,” said Joseph Amato, Chief Investment Officer at Wall Street investment firm, Neuberger Berman. “With a Ukrainian [shakey] cease-fire agreed to on Thursday, and Greece and its creditors seem to be talking, rather than bickering, “at least for now, it seems to have calmed fears,” Amato added “Investors were also heartened by rising oil prices, more promising German economic data; and, a “reasonable” showing for fourth quarter earnings reports. Whether last week’s actions presage long-term solutions, remains to be seen,” he concluded. But for now, don’t worry — be happy! 🙂
As Vito Ricanelli wrote in this weekend’s Barron’s, “crude prices rose for the third consecutive week. While there is an oversupply of the black gold, the sustained oil increase is easing fears about [weak] oil demand, and global growth. The Eurozone economic data on Friday showed some big countries are stagnating, with Germany — the Continent’s engine –posted a 0.7percent fourth-quarter gross domestic product growth, significantly better than the previous quarter.”
For the week last week, the DOW rose 195pts,, or +1.1 percent, to 18,019; while the S and P climbed 42pts., or +2 percent, to 2,097; and, the tech-heavy NASDAQ — the star performer — ended the week higher by 149pts., or +3.2 percent to 4,894. For the year, the DOW is +1.1 percent, the S and P +1.85 percent; and, the NASDAQ is +3.33 percent. Rick Fier, a trader at Conifer Securities, told Barron’s that he “expects the S and P to surpass 2,100 soon; and, then grind higher.
Oil Extends Gains; Brent Crude Rises Above $60 For First Time This Year
Has oil found a bottom? Depends on who you ask. But, the technical evidence, at least, is starting to point to the fact that oil has indeed found at least a short term trading bottom. As Ira Iosebashvili and Georgi Kantchev wrote in this weekend’s Wall Street Jorunal, “Brent, the global benchmark, jumped 3.8 percent, to $61.52 a barrel on the ICE Future Europe, it’s highest close since December 23, 2014. The price of West Texas Crude (WTI), the U.S. oil benchmark, closed up 3.1 percent, to $52.78 per barrel on the New York Mercantile Excchange (NYSE). Both benchmarks rose for the third week in a row, posting their largest three-week percentage gains in nearly four years. Brent prices have risen 26 percent, and Nymex crude has gained 16 percent since January 23, 2015.”
“Oil prices received a boost from reports that more energy companies will cut spending and trim jobs, an indication that they may be preparing to curtail production that they may be preparing to curtail production at a time when global oil supplies are outpacing demand,” the Wall Street Journal noted. “We are preparing the company to face a long period of low oil prices,” said Patrick de le Chevardiere, Chief Financial Officer at French oil major, Total SA.”
“Barclays, estimates that company announcements this year indicate that oil companies that combined — account for nearly half of the world’s oil-and-gas spending — intend to spend 16 percent less on exploration and production in 2015.” Additionally, the Journal notes, “the number of drilling rigs in the U.S. — seeking oil — fell for a tenth week in a row, down 84 rigs last week, and down 367 rigs from one year ago — to 1,056 rigs. The 367 rig decline in the past year is the highest, one-year percentage loss in nearly 30 years. “Ultimately, you will see a drift to the upside; but, it’s not something that’s going to happen in the next week or so,” said Robert Yawger, Director of the Future’s Division at Mizuho Securities.USA. “There’s plenty of supplies out there.” “With declining rig counts in the U.S. unlikely to have a [negative] impact on production just yet; and, seasonal demand weak, the rally in oil prices may falter soon,” according to commodities analysts at Ca;ital Economics in a note to their clients at the end of last week.
So, even if oil has bottomed here, and the jury is still out, we probalbly don’t see black crude trading all that much higher this year — all things being equal.
Acadia Bio-Pharma (ACAD) — ‘A Potential Blockbuster’ Bio-Pharma Stock
I have been a long-term holder and bull with respect to Acadia Bio-Pharma (ACAD), and nearly doubled my position in shares I hold — from 750, to 1200 at Friday’s close. I have long been impressed by the company’s science and their experimental drug for Parkinson’s psychosis, which may also benefit Alzheimer’s patients. Seeking Alpha had an article last week, forecasting the company “could be the most sought after biotech company in 2015.”
The author of the article is long ACAD;and, so am I. Having said that, Seeking Alpha notes that “it’s been well overt two years, since Acadia Pharmaceuticals (ACAD) announced a successful Phase III trial for Nuplazid, in treating Parkinson’s disease psychosis (PDP). And, it;s been nearly two years since Acadia disclosed that the data from that trial was good enough to file an NDA (new drug application) with the FDA. So, after two years of completing pre-commercial activities; and, earning a Breakthrough Designation from the FDA, which has historically solidified a drugs [chances] of FDA approval — Acadia is expected to file its NDA early this year, and Nuplazid will then enter the [commercial] market by the end of this year — as the latest anti-psychotic drug. The fact that Nuplazid is about to finally enter the market — might make Acadia the most sought after company this year — at least by acquirers.’
According to Seeking Alpha, “he list of drug companies that might acquire Acadia is large. It could be a company like AstraZeneca (AZN), AbbVie (ABBV), Otsuka Pharmaceuticals,” among others. The key takeaway,” Seeking Alpha notes, “is that many companies might show interest in Acadia, as either a marketing partner, or as an acquisition target.”
For the full article, I refer you to Seeking Alpha. Remember, there are no guarantees in any of this. Do your own homework, due diligence, and understand that there is no such thing — as a sure thing — especially when investing in bio-pharma stocks. They can be notoriously volatile. Having said that, I upped my position from 750 shares on Friday, to 1,200. The stock closed Friday, up 37 cents, or 1.09 percent, to $34.21. Good luck whatever you do, and stay warm. U.S. markets are closed tomorrow/Monday, for President’s Day. V/R, RCP