E Market Briefing For Tuesday, Jan. 5

A stiff hangover - greeted the big-cap market to start the year, while relative stability or rebounds were seen in a number of small-cap stocks that struggled late in 2020. This reinforced my suspicion about some 'super-cap' gains being shepherded into 2021, so as to push profits into a new tax year (regardless of whether capital gains rates go up or not).

However, along those lines, the market will likely be more pleased if Georgia's Senate race goes favorably to leave the Republicans in control, and it's tough to tell if that loomed as a factor in Monday's slide or not. For sure it matters at least somewhat more than the political theater surrounding Trump's efforts to 'claw back' votes in Georgia, which might bring him more legal woes (though it's pretty clear for years that he's not troubled by that... an aspect noted years ago that may well date from his being mentored by the legendary Roy Cohn).

I suspect the big-cap sell-off is primarily the first issue (new tax year / overdue profit-taking), more so than the other issues, but 2nd would be Georgia's race and 3rd (perhaps overriding all) is COVID's 'fast-variant' expanding globally, as not only is the UK locking-down again, but Japan reports a huge surge.

Meanwhile .. COVID spreads, and really has more to do with economic odds of a broad recovery, rather than just being on 'Fed-watch' or worrying about the 10-year, although it all matters.

Today's 'deal' to allow a huge Chinese company (with manufacturing capacity) to license Inovio's (INO) INO-4800 vaccine, should push the FDA off its duff, or at least the Defense Department, which has been backing INO's delivery system that is not itself being licensed to China. Remember though, technology often licensed to China tends to stay there and get knocked-off, even after a deal evolves (for better or worse). The 100 million initial royalties is fine, although chicken feed relative to eventual Chinese market, much less US approval.

So things are progressing. And to the FDA it's simple: get off your coddle duff with big pharma, and do it fast. The year of questionable pharma deals that at least a few ponder relates to promises to officials in their retirement years has started to attract attention of some biotech executives who gather what game is going on, but are in a 'Catch-22' (I've heard) as they don't want to accuse or otherwise impeded the agencies or officials that seem to 'string them along'.

I wonder what DARPA or DoD thinks of the FDA’s inertia directed toward INO for awhile, or lack of urgency in approving at least Sorrento's (SRNE) Covi-Stix test? It remains probable that Sorrento's approval is coming (and authorization from Mexico within 5 days thereafter), but people need all these tests yesterday. As a friend who does IT for MLB mentioned, they have been stunned by a heavy number of 'false negatives' from the testing kits they've been using. If, after all this time Sorrento has one of the 'best' with reliable data, it's a home-run deal.

Back to Inovio, I’m sure the fear of Intellectual property transfer to China has been considered, but we haven't been shown the full agreement. If FDA came to the table prompting the DARPA Phase 2/3 funding and needed to convince INO to pull out of this deal, they could 'if' that's needed. For sure they saw this news today, and likely knew all about it in-advance. So 3 million with promise of another hundred million based on performance is nothing compared to the money the Feds flooded into Moderna (MRNA) and Pfizer (PFE) for vaccines that; 

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William K. 2 weeks ago Member's comment

Thanks fir the large collection of information and insights, Just what UI needed!!