S Monday Markets Unhinged

Businessman, Internet, Continents

Today's stock market is somewhat unhinged because so many foreign markets are shut for a bank holiday: Britain, China, Thailand, Japan—but not other European markets or Hong Kong's. Hong Kong fell. Being the only major market open today made it easier for stocks to rise, and as I write the Dow Jones Industrial Average is up about 300 points.

Today's Financial Times reported that 41 SPAC's, special purpose acquisition companies, which solicit investments without naming or often even selecting the target they will buy, issued during Q1 this year, almost all failed to remain at their high issue price. The pink paper also reported on the most overpriced company acquired with a SPAC, Hometown, a tiny deli in Paulsberg, NJ not far from Philadelphia, which is valued at $13/sh, or $100 mn, in fact had total sales last year of $13,976. Unlisted Hometown, traded on the pink sheets, was promoted by a legitimate-looking Hong Kong institutional advisory firm which backed its capital increases totalling $2.5 billion, which ensnared the endowment funds of Duke and Vanderbilt Colleges. More on SPACs below.

My favorite US covid-19 stock, Clorox, is down ahead of more anticipated good news about the virus. The news cycle will get moving tomorrow when most foreign markets reopen and there will be a host of reporting companies.

Energy & mining

Schlumberger Ltd rose 5.1% today in the pre-market, effectively Paris because London was closed., with the stock hitting $27.73. It is now at $28.41.

Energy Fuels, which plans to extract rare earths from uranium fuel sands, is up ~5.2% today.

BP plc announced that it will build a second wind farm off the coast of Scotland, part of its new green energy initiative.

”Gold Mining Bull tipped” Kirkland Lake Gold, (KL) which gained $5 to reach $38.6. We are still down from our basis of $44.9/sh. Gold is up 1.44% to boot.

Cameco gained 8.84% today on heavy volume. CCJ was given a TP of $25 last month by Scotiabank. Its sub Uranium Royalty Corp (URC) sold 348,060 pounds of uranium ore today to Yellow Cake plc for $28.73/lb. All are Canadian but uranium is priced in US dollars. URC is getting Russian Uranium from Kazatomprom JSC bought by CCJ and will be buying more.

In a remarkable reversal, Cantor Fitzgerald slashed the price its SPAC paid to buy Audeoeye Inc, AEYE, by a quarter from the price set in Feb. It makes Lidar systems.

Swiss ABB rose another 13.4% today on no news. We own it both through Investor A/B, the Swedish fund, IVSBF, and directly.

Nio, the Chinese electric vehicle firm, had sales in April up 125.1% from last year, to 7,102 deliveries for the month. It's growth in March was 373% so this number is a disappointment. But Tesla fell a lot harder as its Berlin plant will not come on stream this year after all. NIO gained 1.3% today at the open but are lower by 17.2% from the start of the year. We sold 2/3 our holdings then. NIO has now lost 0.3%.

Azure Power dropped 1.4% because India's solar panel installation will be hurt by the huge virus outbreak. AZRE is Mauritian but sells its rooftop panels mostly to India. It is diversifying hard but it is not easy to do.

Atlantica Sustainable Infrastructure Fund, (AY) is down 1.4% in part because London is shut. Its part owner, Canadian Algonquin Power, (AQN), gained 1¢ today.

Finance

CBOE Global Markets, again tipped by Value Line (the other VL) last week, is up another 2.6% after Deutsche Bank put a buy rating on the brokerage with a TP of $117 while Oppenheimer and Rosenblatt rate it outperform and buy with the same target price, $120. It beat last Friday reporting after hours on both sales and earnings, at $365.5 million and $1.53 resp. It is $107.2 now. It runs options exchanges and auctions the right to trade US equities to foreign brokers.

Franklin Resources, the Templeton fund owner, reports Tuesday before the market opens.

Tech & Telecom

Nokia gained over 4% today because it is being touted online.

Verizon barely budged after selling AOL and Yahoo to Apollo Global Management for roughly the $5 billion it paid for them. It is up 0.61% now.

Microsoft finally gained after losing for a week.

Vodafone was tipped for its business telephony today which boosted the stock price by one SJ.

Korean Coupang gained 1.7% today. It is still down from our basis. 

Pharma and healthcare

Reporting tomorrow are drug firms Esperion (ESPR); Theravance (TBPH) ; Bausch Healthcare (BHC); and Zymeworks (ZYME). The latter 2 are Canadian and in the model portfolio, expected to report after hours.ZYME fell 1% in anticipation of poor earnings.

Swiss Novartis' generic sub Sandoz will launch phase III trials called Mylight for copy-cat aflibercept, a drug against neovascular, age or diabetes related macular degeneration, which accounts for about 90% of total or partial blindness in old people.The disease leads to abnormal growth of blood vessels in the eye.

Genfit rose 6% today, for no reason I can find. It is one of the stocks I overpaid for, a developer of liver disease meds from France.

Blood plasma specialist Spanish Grifols, opened up 2% today but now is down about 1.1%

NovaCure lost 0.3% despite hopes for electricity cancer therapy.

Astra-Zeneca iwas up another 1.8% today to $53.6 but then profit-taking began and it is now up only1.1%. There is no arbitrage with Britain.

Despite Tokyo being closed, Takeda (TAK) is up 0.66% today. 

Teva gained a healthy 1.21% today after its US arm announced new data on use of Austedo tablets to treat tardive dyskinesia in increasing doses over 145 weeks which improved outcomes. The drug is also used for Huntington's disease.The data was presented at the virtual American Psychiatric Association which is being held May 1-3. TEVA bonds, of which we own two variants, also rose.

AbCellera Biologics which opened the year at $60 with an IPO, fell again by 2.7% to $26.02. This Canadian is our all-time worst performer in such a short time. Small cap Ocugen (OCGN) rose by 20% today because it has a vaccine which appears to work against the Brazil Covid-19 mutation. This is how small cap pharma stocks behave.

Novavax lost 14% despite starting a trial for its pediatric covid-19 jab.

Aurinia Pharmaceuticals lost 3.5%. It will report Thurs. AUPH went up for no reason last week.

Mexican REIT Fibra Uno (FBASF) will convert surplus residential and commercial properties into hospitals and offices, as it has already done with properties in the La Viga area of Mexico City, writes Eduardo Garcia in Sentidocommun.co.mx, a newsletter with which we exchange daily. 

Merck and Bristol-Myers, which both lost traction last week over meh results, missing both sales and profit targets, are recuperating today, up 1.64% and 1.55% resp. Both are US firms. Merck's spinoff Organon will begin trading next month.

Eats

Nutrien of Canada reports today after markets close. It is up about 0.55% in anticipation after being kept at buy by TD Securities-Charles Schwab analysts. 

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Flat Broke 1 year ago Member's comment

Thanks for the share. Seems like almost everyone gets the day off today but us!