M2 is Fuel for Inflation, How Much Money Must the Fed Drain to Achieve 2 Percent?
U.S. Money Supply, measured as M2, is an important consideration when forecasting inflation. A decline in immediately available cash in the economy has a downward effect on price levels. At the same time, less cash available to consumers also cools economic growth. With the Federal Open Market Committee’s (FOMC) interest rate decision coming the first week in May, the updated report this week (for March) will give investors a look see at how successful the Fed has been draining funds from the system while trying to maintain some growth.
M2 Shrinking
The Federal Reserve will update stock and bond markets Tuesday afternoon on the total amount of currency, coins, bank savings deposits, and money-market funds held in March. This broader measure, officially M2SL, referred to as M2, gained renewed focus after contracting for the first time ever in December 2022, then contracting even further in January and February. January’s 1.75% decline and February’s 2.4% drop to $21.1 trillion, are the steepest drops so far in M2.
Image: M2 levels ramped up starting in 2020 in response to pandemic economic efforts
A fourth consecutive decline in M2 would provide more evidence that inflation can be expected to continue to come down and weigh into the FOMC decision when the Fed meets to adjust monetary policy at its May 2-3 meeting. While the chart above shows the recent declines are significant, it is still far higher than the trend line that was established decades ago. So while a decline of similar magnitude as the first two months would be welcome by inflation hawks, there is still a great deal more cash in the system than there was pre-pandemic. But it would be a huge positive and may cause the Fed to pause or slow draining money from the system.
Inflation
Consumer price inflation is well off its 8.6% average for all of 2022. Inflation since rose 5% in March 2023 (annual basis), decelerating from February’s 6% pace. While this slowdown in price increases is substantial, the Fed doesn’t want to declare “mission accomplished” until it is ranging near 2%. Its work is not yet finished.
How close is the Fed from finished is what investors will try to discern from M2. Highly regarded analysts and Fed watchers anticipate that there is a lag of about a year when the money supply shrinks. However, as indicated above, it has never come down on an annualized basis, and January and February were the largest declines to date. So even the best analysts have little history to point to.
Financial Sector
The data is for March, so it is the first look at M2 since the banking sector showed trouble early that month. A part of the difficulty banks are currently experiencing is that the reduction in cash has caused a need for them to liquidate U.S. Treasuries and other bonds to fund withdrawals. A further huge reduction in M2 could be shown to be challenging more banks as bonds and other interest rate-sensitive assets had lost considerable value as rates rose dramatically over the past year.
Using the most recent data, the Federal Reserve reported bank deposits were down 6% for the week ending April 12 versus a year ago. Deposits have been falling year-over-year since November, off slightly at $17.2 trillion compared to the highest-ever $18.2 trillion level seen in April last year.
Further declines in deposits should lead to fewer loans written, fewer loans slows economic growth. This in part, accounts for why there is a lag between when the Fed drains and when it has an impact on inflationary pressures.
Take Away
M2 is an important gauge of future inflation. Because of this, the release of data may cause economists to change their May FOMC meeting forecast. A large decline may cause the Fed to pause, if M2 resumed its path upward the Fed may become more hawkish. Efforts to help the banking system last month, may have reinflated money supply, this will be a very interesting report.
The amount of investment in initial public offerings (IPOs) during March-April has jumped from January-February levels. Globally, the pick-up in IPOs is linked to the uptick in stock prices, which has allowed companies to tap into investor appetite for newer listings. A sizeable percentage of the offerings are in Asia, but Europe and the U.S. have experienced a surge as well. Activity during the first two months of 2023 had ground to a halt; new data compiled by Bloomberg demonstrates a much faster trend.
To date, there has been $25 billion worth of IPOs worldwide in March and April; this is nearly twice the amount transacted during the prior two months of the year. Companies headquartered from Hong Kong to Milan have put up their “Going Public” signs up as market volatility declined. The uptick in IPOs in Asia substantially moved the needle as non-U.S. exchanges accounted for nearly 80% of new share sales during April.
The uptick in Europe can’t be ignored either; European listings are higher by a wide margin compared to earlier in the year. The activity in the U.S. is not as robust but also noteworthy, as concern about a recession had been creating caution among potential U.S. issuers.
In a quote published by Bloomberg News, Jason Manketo global co-head of the law firm Linklaters’ equities practice said, “We are beginning to see green shoots of activity with companies restarting processes that were on hold, but there is still a fair degree of uncertainty in the market.” Mankel added, “The buy side is keen to see results for a couple of quarters before committing to an IPO. This means the potential pipeline of some 2023 deals has been moved out to 2024.”
Leaders
Statistically, Asia is where a great deal of the action is in the world today. But the activity is different, perhaps more appealing, than last year. In 2022 the vast majority of large deals were concentrated in mainland China; over the past two months, issuance is coming from a broader representation of Asia.
“The IPO market is coming back gradually and slowly. It is not 100% back yet, but there are signs of life and renewed vigor,” said James Wang, co-head of equity capital markets at Goldman Sachs Group Inc. in Asia ex-Japan.
A couple of nickel producers from Indonesia surged as they went public. And in Japan, as part of the country’s largest IPO since 2018, Rakuten Bank Ltd. soared after it raised 83.3 billion yen ($623 million). And KKR & Co.-backed Chinese liquor company ZJLD Group Inc. as recently as April 20th, priced Hong Kong’s largest offering in 2023.
Europe Wakes Up
Europe’s IPO market had been dragging, with activity in 2023 down about 12% from the same period last year as Russia’s invasion of Ukraine brought new listings to a screeching halt.
Also weighing on the market, poor IPO returns have been a deterrent for investors. Portfolio managers had been in the drivers seat insisting on bargains for less proven companies. In March the sudden meltdown of financial firm Credit Suisse, ignited a global market rout, this added to investor worries about interest rates and inflation; the event also made it less attractive for companies to try and attract a favorable price.
But there are growing signs of fear lifting. Most notably, Lottomatica SpA, the Italian gambling company backed by Apollo Global Management Inc., opened the books last week for a €600 million ($657 million) IPO, becoming the third large firm to tap European exchanges this year. Additionally, German web-hosting company Ionos SE and electric motor component maker EuroGroup Laminations SpA have managed to raise more than $400 million in the region, though both stocks have struggled after debuting.
U.S. Uptick
While IPO activity in the U.S. is not as robust, there has been a huge uptick as well. The IPO calendar for U.S. exchanges shows 20 priced deals totalling $751.5 billion, and 29 new filings. This is an acceleration after only $4.1 billion had been raised for companies listing on U.S. exchanges during the first two months of 2023.
Take Away
Globally companies are finding it more worthwhile to tap capital from the equity markets via IPO. While the most growth is greater Asia, Europe and the U.S. see a significant uptick as well. Whether this trend continues and represents, a buying opportunity seems to hinge on recession concerns. Many forecasters are now calling for a much more mild recession than previously expected.
The Annual Russell Index Revision and Dates to Watch (2023)
The yearly process of recasting the Russell Indexes begins on Friday April 28 and will be complete by market opening on June 26. During the period in between, FTSE Russell will rank stocks for additions, for deletions and evaluate the companies to make sure they conform overall. The methodology for inserting and removing tickers in the Russell 3000, Russell 2000, and Russell 1000 is intentionally transparent to help eliminate price shocks. Price movements do of course occur along the way, and investors try to foresee and capitalize on them. Channelchek will be providing updates that may uncover opportunities, or at least provide an understanding of stock price swings during this period.
Background
Russell index products are widely used by institutional and retail investors throughout the world. There is more than $20.1 trillion currently benchmarked to a Russell index. This includes approximately $12.1 trillion benchmarked to the Russell US Equity indexes. The trading volume of some companies moving into an index will heighten around the last Friday in June as fund managers seek to maintain level tracking with their benchmark target.
Opportunity
For non-passive investing, determining which stocks may benefit from moving up to a large-cap index, down to a smaller one, or into or out of the measurements is an annual event causing volatility around stocks. There has, of course, the potential for very profitable long and short trades. And the potential for an unwitting investor to be holding a company moving out of an index, which could cause less interest in the stock, and perhaps unfortunate performance.
Active investors should make themselves aware of the forces at play so they may either get out of the way or determine if they should become involved by taking positions with those being added or those at the end of their reign within one of the Russell measurements.
Dramatic Valuation Shifts
The leading industries and altered market-cap of companies of a year ago have changed dramatically from last year’s reconstitution. This will be reflected in the 2023 rebalancing and is going to impact a much larger number of companies than most years. That is to say, a higher percentage of companies than normal will move in, out, or to another index, and may be subject to amplified price movement.
The 2023 Russell Reconstitution Schedule:
• Friday, April 28 – “Rank Day” – Index membership eligibility for 2023 Russell Reconstitution determined from constituent market capitalization at market close.
• Friday, May 19 – Preliminary index additions & deletions membership lists posted to the FTSE Russell website after 6 PM US eastern time.
• Friday, May 26th, June 2nd, 9th and 16th – Preliminary membership lists (reflecting any updates) posted to the FTSE Russell website after 6 PM US eastern time.
• Monday, June 5th – “Lock-down” period begins with the updates to reconstitution membership considered to be final.
• Friday, June 24 – Russell Reconstitution is final after the close of the US equity markets.
• Monday, June 27 – Equity markets open with the newly reconstituted Russell US Indexes.
Take-Away
The annual reconstitution is a significant driver of dramatic shifts in some stock prices as portfolio managers have their holding needs shifted within a very short period of time. Longer-term demand for certain equities is altered as well. Sizable price movements and volatility are expected, especially around the last week in June. In fact, the opening day of the reconstitution is typically one of the highest trading-volume days of the year in the US equity markets.
The market event impacts more than $9 trillion of investor assets benchmarked to or invested in products based on the Russell US Indexes. Portfolio managers that are required to track one of these indexes will work to have minimal portfolio slippage away from their benchmark. The days and weeks from April 28 through the last Monday in June can create opportunities for investors seeking to benefit from price moves, Channelchek will be covering the event as stocks to be added to, or removed from this year’s Russell Reconstitution and other information plays out.
Tax Date Will Provide Timing on Critical Debt Ceiling Breach
While both stock and bond investors are focused on the Federal Reserve and how it will orchestrate lower inflation without crashing the economy, the debt limit time bomb hasn’t gotten much attention yet, this could quickly change. The U.S. mathematically hit its allowed debt ceiling on January 18, 2023. Treasury Secretary Janet Yellen has since been taking measures to avoid a U.S. default on the national debt. But she can only do this dance for so long. How long will become much clearer quite soon. April 18, 2023 is tax date; the U.S. Treasury will then have more precise revenue numbers. This will give the department a much better understanding of when the U.S. would default on its debt if Congress doesn’t allow a higher borrowing limit.
Congress tends to let these issues come down to the eleventh hour before acting. All parties involved know a default would be catastrophic, so the down-to-the-wire drama frustrates markets but tends to allow Congressional representatives to carve out deals on what is important to them. Some expect the actual deadline will be as early as mid-June, others forecast it to be just after summer. The answer will come into clearer focus as tax receipts are taken in over the coming week. Once the time-frame is more certain, the markets are likely to begin to then react as concern amps up.
The Treasury’s $31.4 trillion borrowing cap plus tax receipts will give a clearer idea of how much cash it will have available, which it can weigh against its spending rate. In a note to clients, Bank of America’s analysts, Mark Cabana and Katie Craig wrote “we maintain our current base case for a mid-August X-date but see risks skewed toward earlier.” This four-month or earlier period would end near the scheduled recess for both the House and Senate.
In the analysts view, an influx from taxes of more than $200 billion following tax day would be a relief, while a figure of less than $150 billion would be concerning. Meanwhile, U.S. House Speaker Kevin McCarthy is preparing to roll out his proposal this week for a one-year debt ceiling suspension, according to sources reported by Bloomberg. Republicans have long sought to make any deal contingent on spending cuts, while President Biden has insisted that budgetary needs and debt ceiling should be viewed separately.
Over the coming months markets and US Treasury officials culd encounter:
T-Bill Yield Increases
Investors could expect higher yields on securities maturing in the very short end of the curve. The fear driving the rate increases is the knowledge that should the U.S. runs out of borrowing capacity, it may not be able to borrow to pay the maturing debt.
This could begin to create an unusual one-year and shorter yield curve as investors either want maturities well ahead of any possible default or well after to give the Congress time to act.
Insuring Against Default
A key market to watch is what happens in credit default swaps for U.S.-issued debt. There has been an increase in activity in recent months as pricing has moved past levels seen in previous debt-cap crunches; this is viewed as the market’s increased expectation of a higher probability of default.
Treasury Cash On-Hand
The measures Treasury Secretary Yellen deployed in late January to address the debt limit issue involve in part, spending cash it doesn’t need to borrow. Last week this cash dropped to $87 billion. This is the lowest level since December 2021 during the debt ceiling battle. However, with the tax payment infusion and other tax revenue, this amount is viewed as a safe cushion for the time being.
The amount of revenue received in taxes this week is critical in that market participants can gauge how far off the debt ceiling debate will be. The concern that the negotiations can cause short-term shifts in interest rates and impact the U.S. dollar and other markets generally has investors on edge.
The situation is not likely to be resolved until the eleventh hour with the current split Congress – when the peak period of drama occurs will be better known very soon.
Doomsday Investor Sees Ongoing Moves by Policymakers as Destructive
We’d all like to think that global decision-makers responsible for economic conditions have the best interest of the world’s citizenry in mind when making decisions – but doubts and concerns are growing. Among the most concerned are economic stakeholders that don’t believe “bad” things should always be prevented. One very credible voice highlighting this idea is hedge fund manager Paul Singer. He’s the CEO of Elliot Investment Management and recently moved his firm’s offices out of NY, NY, to the more business-friendly West Palm Beach, FL. Singer says a credit collapse and deep recession may be needed to restore financial markets.
Paul Singer is the founder and CEO of Elliott Investment Management. Its year-end 13F reportable AUM was $12.25 billion. The firms opportunity-based investment style allows Singer and Company, known for their corporate activism, to move to wherever profit may lie.
The current thinking of Singer, a registered Republican, has been making headlines. This includes a widely circulated opinion piece published in the Wall Street Journal last week. In it, he discusses more than a decade of what he believes are damaging easy-money policies and how a deep recession and even credit collapse will be necessary to purge financial markets of excesses.
“I think that this is an extraordinarily dangerous and confusing period,” Singer told The Journal, in his interview, he warns that trouble in markets may only be getting started now that a full year has passed from the start of tighter monetary policy.
One of the more chilling quotes from Singer is, “Credit collapse, although terrible, is not as terrible as hyperinflation in terms of destruction wrought upon societies.”
The idea that we are headed down either one path or the other, he doesn’t mention a third option, may be why the New Yorker magazine calls him “Doomsday Investor.” He explains, “Capitalism, which is economic freedom, can survive a credit crisis. We don’t think it can survive hyperinflation.”
The Doomsday Investor has been outspoken against government safety nets for a while, including the sweeping banking regulations from the Dodd-Frank Act of 2010. This act created the Financial Protection Bureau (CFPB) and established the Financial Stability Oversight Council (FSOC). Singer strongly opposed prolonged market interventions by global central banks following the 2008 global financial crisis. Interventions that still haven’t been drained from the U.S. monetary system.
Singer, who is 78 called crypto, “completely lacking in any value,” in his WSJ interview. He also said: “There are thousands of cryptocurrencies. That’s why they’re worth zero. Anybody can make one. All they are is nothing with a marketing pitch—literally nothing.”
While his funds performance have placed him near the top of hedge fund manager performance, Singer personally worries the Fed and other central banks will respond to the next downturn by referring to the failed playbook of slashing interest rates and potentially resuming large-scale asset purchases. The point was shown to be current, as Singer called the regulatory response to the collapse of Silicon Valley Bank and Signature Bank, including the guaranteeing of all deposits from the two lenders akin to “wrapping all market movements in security blankets.”
He complained, “…all concepts of risk management are based around the possibilities of loss.” He encouraged decision makers to, “Take it away, it’s going to have consequences.”
Where Can Investors Hide
Paul Singer said in his interview there may be a few places for investors to ride out what he sees as a coming storm. One place comes as no surprise, “At such times, some consider the safest bet to be relatively short-term U.S. government debt,” he said, adding that “such debt pays a decent return with virtually no chance of a negative outcome.” He is likely speaking of U.S. Treasuries two years and shorter as the longer duration bonds would be more volatile as rates shift, and other government debt like GNMAs are fraught with extension risk.
Singer also believes some gold in portfolios may make sense.
Take Away
Without some rain, nothing could flourish. Without an occasional brush fire, the risk of massive forest fire greatly increases. Paul Singer, in his interview with the WSJ, indicates he believes the economic brushfires that decision-makers have been preventing should have been allowed to run their course. Preventing them is a big mistake and a collapse may not be far off.
This collapse in easy credit and crypto, among other bubble-type excesses Singer believes could be destructive but preferred by society over continuing to move toward hyperinflation.
Short Changing Investment Returns By Ignoring Time Horizon
Time horizon is part of every investor’s buy decision, or at least it ought to be. For example, in 2022 the 60/40 investment portfolio had its worst performance since 2008. This is despite a 5.3% increase in value during the fourth quarter of that year. Many headlines had read that the classic 60% stocks and 40% bonds portfolio is “broken.” After it’s stellar performance during Q4 2022, the first quarter of 2023 brought even higher performance – again compounding by an additional 5.9%. This example can highlight that time horizon is dependent on the investment goals proving 60/40 probably is not dead after all. The 60/40 diversification is considered conservative, it’s often implemented for retirement portfolios, typically portfolios with a lot of lead time to achieve its goal of historical returns. Goals should dictate investment strategy and they should include a realistic time horizon.
To Be Patient or Not to Be Patient
Entering the second quarter of 2023, economic trends, including commodity prices, interest rates, political power, inflation, and even peace between nations, all seem to be sending off mixed signals on future trends. A clear market read is far more difficult today than most years. This leaves a lot of questions on what to do with one’s money. If you leave it in the bank, inflation is likely to erode your purchasing power. If you move it to the U.S. government-backed treasury market, a rise in rates (as promised by the Fed) can leave you hurting like a few banks that saw their assets value plummet. Should stocks take a leading role – even if holdings wind up moving sideways or even down for the rest of this year?
As mentioned, this depends on your goal. If you can be patient and have a time horizon to achieve performance of more than a year, the tendency for reversion to mean suggests the answer is probably yes. However, if during the next six to 12 months, this money may need to be deployed for a purchase, it may be best to continually roll treasuries maturing in under a year.
For investments expected to be held longer than a year, there is the lazy way and a more hands-on approach that takes a little more digging. The lazy way says you plop a large percentage of your portfolio in an index fund and earn market returns. A more involved management approach of one’s portfolio would suggest that you’d prefer to avoid stocks considered overvalued or in a weakening industry. If, instead, one can achieve adequate diversity by owning many companies in different industries, and do enough evaluation (i.e., exploring trusted research) to have a sense of whether holding them would suit your needed time horizon, then the stocks selected as your holdings may avoid expected dogs weighing it down. It would make sense that this argues for patience, with expectations that not only will stocks follow history and go up over time, but your holdings have a reasonable expectation to outperform the market.
Time Horizon
Time horizon is a critical factor in investing. It refers to the length of time an investor is willing to hold onto their investments. The time horizon can range from a few months to several decades, depending on an investor’s goals, risk tolerance, and investment strategy. Most benchmarks are viewed daily, quarterly, and monthly. If your time horizon is five years, the quarterly or even annual returns should be a low consideration. Cathie Wood, CEO and founder of Ark Invest, says she invests on a five-year time horizon, considering the speculative growth names her funds have invested in, such as Tesla (TSLA), Roku (ROKU), Zoom Video Communications (ZM), Exact Sciences (EXAS), etc. she could not manage her funds properly if she looked shorter in term.
At least each quarter Portfolio Manager Chuck Royce and Co-CIO Francis Gannon of Royce Funds publish text of a “conversation” between the two. The subject is usually past market performance, expectations of the future, and even stocks that they believe, with the appropriate time horizon, will pay off.
In the discussion between the two, Francis Gannon covered the case for more extended time horizon investors to explore the small-cap sector. His expectation is that various sectors (viewed by market cap) will fall in line with historical performance averages. “The stocks that performed best under the previous decade’s regime of zero interest rates, low inflation, and low nominal growth—which were mega-caps and small-cap growth—are unlikely to lead going forward, regardless of what direction the U.S. economy ultimately takes. Conversely, those areas of the equity market that lagged during this long period are likely, in our view, to capture long-term leadership,” said Gannon. This is when Chuck Ross very clearly explained the importance of knowing one’s time horizon for maximum potential gain.
“We think small cap is ready to roll and expect the next three to five years to be strong on both an absolute and relative basis.” Said Mr. Royce. He explained that rising rates could help companies that can that don’t need to borrow from the outside. “Equally important, the Russell 2000’s valuation remained near its lowest rate in 20 years compared to the Russell 1000’s, based on our preferred valuation metric of the median last 12 months’ enterprise value to earnings before taxes (LTM EV/EBIT).” Royce explained.
The chart above shows that the 20-year performance of small-cap stocks averages 102.9% above that of large-cap equities. The underperformance began five years ago, and the current 20-year low in relative performance in small-caps could play out to be a long lag. With a long enough time horizon, one might expect that small-cap investors get rewarded for the additional risk and reduced liquidity in the sector.
Investment Strategy
While not everyone has five years or more to wait for performance to improve, intentional stock selection among small-caps could help those who do. A recent Barron’s article argued that “Small-Cap Stocks Look Ready to Rally,” the investment publication also believed that stock selection within the sector could pay off. The author wrote that as of March 31, “the Russell 2000 was at 44% of the S&P 500’s level, a ratio the index touched in early 2020 when the advent of Covid-19 had left the economy in perilous waters.” The publication then reported that the level is a technical low point, a support that wasn’t even breached with pandemic concerns and skyrocketing large-cap tech stocks. Expressed in the within the April 3 article was to a methodology of filtering stocks by reviewing companies with market caps of at least $200 million and free cash flow minimum of 4.5% of the share price. This would put them in line with the overall Russell 2000.
Then look at the consensus earnings forecasts among analyst, have they risen? A high short interest in the stock could also be part of the screening process for possible buys.
Take Away
The importance of time horizon in investing lies in the fact that different investment opportunities have different risk and return profiles over different time periods. Short-term investments tend to have lower risk but lower returns, while long-term investments tend to have higher risk but potentially higher returns. By understanding your time horizon, you can choose investments that align with your investment goals and risk tolerance.
For investors that can span many years holding and waiting for scenarios to play out, but don’t, perhaps are leaving long-term return on the table by investing as though their time horizon is short. Investible cash sitting in a bank will be eroded by inflation, the Fed with its deep pockets has said it is resolved to instigate a further bear market in bonds. Longer term, stocks outperform, what’s more, well-selected companies can outperform stock indixes that only promise to match the average of good and bad companies.
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Will the CPI Number or Fed Minutes Change the Market Direction this Week?
Market-moving economic reports are likely this week. Those with the highest chance to move markets are March CPI data on Wednesday, then FOMC minutes from the meeting just after last month’s bank failures, and the Producer Price Index on Thursday.
The minutes of the March 21-22 FOMC meeting will be released at 2:00 PM Wednesday, this highly watched information coincides with the half-fiscal year Budget Report from the U.S. Treasury. The FOMC minutes will get a lot of attention, but the U.S. Budget Deficit is likely to receive renewed focus as we approach summer and begin to bump up against the Treasury’s borrowing ceiling.
Monday 4/10
10:00 AM ET, Wholesale Inventories’ second estimate for February is expected to show a 0.2 percent build up; this would be unchanged from the first estimate.
Tuesday 4/11
6:00 AM ET, Small Business Optimism Index has been below the historical average of 98 for 14 months in a row. March’s consensus is 89.0 versus 90.9 in February. The direction of the health of small businesses can foreshadow changes in the stock market.
1:30 PM ET, Austan Goolsbee, President of the Federal Reserve Bank of Chicago will be speaking at a luncheon at the Economic Club of Chicago.
Wednesday 4/12
8:30 AM ET, The Consumer Price Index (CPI) core prices for March are expected to have risen by 0.4 percent versus February’s sharp and higher-than-expected increase of 0.5 percent. Overall, headline inflation prices are expected to have increased 0.3 percent after February’s 0.4 percent rise. Annual rates, which in February were 6.0 percent overall and 5.5 percent for the core, are expected to show 5.2 and 5.6 percent.
9:10 AM ET, Thomas Barkin, President of the Federal Reserve Bank of Richmond will be speaking. He spoke on April 3, indicating his expectations are that low unemployment rates will continue to support the belief that the economy is not at risk of a recession. Inflation, however, is not going away anytime soon, according to Barkin.
10:30 AM ET, The Energy Information Administration (EIA) will provide its weekly information on petroleum inventories in the U.S., whether produced here or abroad. The level of inventories helps determine prices for petroleum products. Markets will be paying close attention after OPEC+ cut production one week ago.
2:00 PM ET, FOMC minutes from the March 21-22 meeting will be released. This report will have two areas that investors will focus on. These are conversations surrounding U.S. bank health, and those discussions related to inflation and interest rates.
2:00 PM ET, the Treasury Statement related to the budget deficit are expected to report a $253.0 billion deficit in March. This would compare with a $192.7 billion deficit in March a year-ago and a deficit in February this year of $262.4 billion. March is the halfway point into the U.S government’s fiscal year.
Thursday 4/13
8:30 AM ET, Producer Price Index (PPI), After dropping 0.1 percent lower on the month in February, this inflation index on the producer level in March is expected to be unchanged. March’s ex-food ex-energy rate is seen up 0.3 percent versus February’s no change.
4:30 PM ET, the Federal Reserve’s Balance Sheet has been receiving heightened attention. After the Silicon Valley Bank collapse the Fed institutes a new method for banks to get assistance, markets will watch to see if this has grown. Also, as interest rates have risen, the fixed income securities held by the Fed have repriced billions lower, Fed watchers are beginning to comment on how dramatic this drop in value has been. The last line investors will focus on is quantitative easing. Specifically, investors will look to see if the Fed is on track with its letting securities mature off its books without reinvestment – this reduces U.S. dollars in circulation.
Friday 4/14
8:30 PM ET, March Retail Sales are expected to have fallen 0.4 percent for a second month in a row. Excluding autos, a 0.4 percent decline is also expected.
9:15 AM ET, Industrial Production is expected to rise 0.3 percent in March after being unchanged in February.
10:00 AM ET, Business Inventories for February are expected to have risen 0.3 percent following a 0.1 percent draw in January.
10:00 AM ET, Consumer Sentiment, which sank five full points in March to 62.0, is expected to improve to 62.7 in the first reading for April.
What Else
Taxes are due April 18 this year. This typically creates a wave of new IRA deposits. On April 13, in NYC there will be a luncheon roadshow with PDS Biotechnology. Noble Capital Markets organize the event, more details are available on Channelchek by clicking here.
Much of Market Performance, in Some Cases All, Occur When the Market is Closed
All traders and most investors have experienced this. From one market close to the next, indexes or stocks rise by 1.5% – 3%, and yet there was never a clear opportunity to make a dime after the market open. The frustration is because the market opened with much or all of the day’s gain baked in. It has been proven to be accurate that the most significant revaluation of stocks occurs during the 17 hours when the market is closed, not the 7-hours when it’s open. And any long-term chart will show that the direction of revaluation over time has been upward. Details, along with other phenomena related to night moves, are discussed below.
Background
Historically, stock markets have had a positive return, and most of this change occurs while the exchanges are closed or not during regular trading hours. Historically the tendency is to make most of its daily move between the closing and opening bell.
This has been shown in research papers through the years, and there are even ETFs which purport to take advantage of this statistical phenomenon. Of course this is not an everyday occurrence, in fact today (4/6/23), the S&P 500 opened lower than its previous close but began moving higher than the open around noon.
A well-researched scholarly paper had been published demonstrating these price movements and offered the explanation that stock prices behave very differently with respect to their sensitivity to beta when markets are open for trading versus when they are closed. The paper titled, Asset Pricing: A Tale of Night and Day, by Henderschott, Livdan, and Rösch explained, “stock returns are positively related to beta overnight whereas returns are negatively related to beta during the trading day.”
Image Source: Asset Pricing aTale of Day and Night
One goal of the research was to test the hypothesis that a securities performance relative to beta is only positive during certain periods. In the paper the researchers tested specific days or months by examining the CAPM validity during different time periods within each day, including all times and all days during the week. The authors wrote, “when the stock market is closed, beta is positively related to the cross section of returns. In contrast, beta is negatively related to returns when the market is open.”
The overall thrust of the findings in the 47-page paper are encapsulated in the chart above which plots the performance during opened and closed periods against different beta groupings of stocks over 25 years.
Can Investors Use this Information?
Most retail trading today is commission free, but there is still a bid offer spread and other slippage. For those that would prefer to not have to be active each day, twice a day, Nightshares ETFs were formed to exploit this phenomenon, with a set it and forget it approach. On the surface it would seem to make sense for long term investors. You could own the S&P 500 index ETF, or increase beta exposure for a potentially better performance with a small-cap index ETF.
The founder of Night Shares, Bruce Lavine, pointed out in an interview that over the 20 years through the end of 2022, the SPDR S&P 500 ETF SPY, 0.31% produced a buy-and-hold return of 9.7% annualized. Three-quarters of that return — 7.5% — was produced while the NYSE was closed.
The numbers are even more pronounced in the case of the small-cap Russell 2000 Index, according to Lavine. Over the same 20-year period, all of the index’s net return was produced overnight; during the day session, it actually lost ground on balance. In other words, small-cap portfolios that out-returned large-cap would have been better off if they were not exposed during the day.
Looking Back on March Markets and Forward to the Second Quarter
Looking in the rearview mirror at March, the month distinguished itself in two ways. First, attention was drawn to the unexpected banking sector as problems with Silicon Valley Bank and Credit Suisse shook investor confidence. The fear of any additional financial sector bank problems bubbling up are at rest for now. Second, after the FOMC meeting concluded with a 25bp tightening on March 22, all major indices breathed a sigh of relief and trended upward in the final week of March. Looking forward into the month of April, the Nasdaq 100 just broke 20% above its October low. This has investors cautiously optimistic that large-cap tech has entered a new bull market, with hopes that the other indices will also continue to climb higher.
Of the 11 S&P market sectors (SPDRs), seven finished March in positive territory, energy was break-even on the month, and three sectors were negative. The best performing three were led by Technology (XLK), up 10.86%, followed by Consumer Discretionary (XLC), which increased 8.65%, and Utilities (XLU), rose 4.91% during March, reacting to lower fuel costs and lower yields.
Energy, which closed out the month essentially where it began, now indicates that April will kick-off with a strong tailwind as OPEC+ decided to cut production, driving oil futures higher.
Of the worst-performing sectors, Financials (XLF) which includes banks, was down 9.55%. Real Estate (XLRE) was lower by 1.48%, and Basic Materials (XLB), reacting to the increased threat of recession as the bank crisis unfolded, was down 1%.
All sectors began moving higher after the March 22nd interest rate decision by the Federal Reserve.
Moving past the March banking crisis, three key factors are likely to continue to be front and center in April. These are inflation and interest rates. Fuel prices, to a lesser degree, may also become impactful as rising fuel prices could serve to push headline inflation higher.
The Consumer Price Index (CPI) gained 6% year-over year in February (reported in March). The inflation gauge is still coming off a peak of 9.1% in June last year, but still well above the Federal Reserve’s 2% long-term target.
12-Month Percent Change in CPI for All Urban Consumers (CPI-U), Not Seasonally Adjusted, Feb. 2022 – Feb. 2023
Source: U.S. Bureau of Labor Statistics
At the Fed meeting, the Federal Open Markets Committee (FOMC) voted to raise interest rates by one-quarter of a percentage point. This followed a quarter-point move at the prior meeting, following more aggressive hikes going back to March 2022.
Federal Reserve Chairman Powell noted that “financial conditions seem to have tightened” since the banking crisis began. The Fed released fresh long-term economic projections at the meeting, including an outlook that foresees just one more rate hike before the FOMC is seen as pausing any moves on overnight lending rates.
The availability of jobs and very low unemployment rate in the face of massive rate hikes from March 2022-March 2023, makes this tightening cycle unique,and perhaps more difficult for the Fed to manage. That said, recession risks remain elevated as the Fed moves work through the economy over time.
Traders now forecast near a 49% chance that the Fed will raise rates by an additional quarter point at the meeting ended May 3 —and a 51% chance it could do nothing.
Recession Watch
The Fed is reaching a critical point in its battle against inflation, the next couple of months will determine whether or not it can navigate a soft landing for the U.S. economy without tipping it into a recession.
In recent months, the U.S. housing market has softened significantly, and manufacturing activity has dropped. In addition, the U.S. Treasury yield curve has been inverted since mid-2022, something that’s historically been seen as a strong recession indicator.
In fact, the New York Fed’s recession model predicts a 54.5% chance of a U.S. recession sometime in the next 12 months.
So far, the most convincing argument a soft landing may still be possible has been the resilience of the U.S. labor market. The Labor Department reported the U.S. economy added 311,000 jobs in February, widely exceeding economists’ expectations. The unemployment rate rose a bit to 3.6%, but that’s still down from 3.8% a year ago.
Take-Away
The market became fearful early in March as participants reevaluated to determine if the bank failures were isolated cases or part of a broader problem. Once confidence set back in with the feeling the problem was isolated, there were relief rallies that pushed all indices and sectors northward the last third of the month.
With the Nasdaq 100 having risen 20% from its low last October, there is an expectation that it is in a bull market and hope that it will lead the other market cap sectors to break into bull territory as well.
Welcome to a holiday-shortened trading week. Yes the U.S. stock market will be closed on Friday. In terms of economic numbers and reports it should be very quiet as we begin the second quarter of 2023. These “quiet” weeks, when the market is not sure where to focus, have proven themselves to be volatile surprises as focus is on unexpected events instead. Last week the major indices resumed its march higher. All closed in the green for the week. Market participants are looking for follow-through to confirm whether we’ve entered a new bull market.
Monday 4/03
9:45 AM ET, The final Manufacturing Purchasing Managers Index (PMI) for March is expected to come in at 49.3. This would be unchanged from the mid-month flash to indicate a slight economic contraction.
10:00 AM ET, Construction Spending is expected to have experienced a flat month for February as the forecast is expected to show unchanged following January’s 0.1% decline.
10:00 AM ET, The ISM manufacturing index has been below 50, indicating a contraction for the last four months. March’s consensus estimate is 47.5 versus February’s 47.7.
Tuesday 4/04
10:00 AM ET, Factory Orders, a leading indicator, are expected to fall 0.4 percent in February versus January’s 1.6 percent decline. Durable goods orders for February, which have already been released and are one of two major components of this report.
10:00 AM ET, JOLTS (Job Openings and Labor Turnover Survey) have been strong at 10.82 million in January. Forecasters see February openings falling to a still high 10.4 million.
10:00 AM ET, Existing Home Sales for February are expected to rise to a 4.17 million annualized rate after January’s lower-than-expected 4.0 million rate.
Wednesday 4/05
10:00 AM ET, the Institute for Supply Management (ISM) is expected to slow after a 55.1 read in February, to a still positive (above 50) 54.4 level in March.
Thursday 4/06
7:30 AM ET, The Challenger Job Cuts Report counts and categorizes announcements of corporate layoffs based on mass layoff data from state Departments of Labor. The prior reading was 77,770.
8:30 AM ET, Jobless Claims for the week ended April 1 week are expected to come in at 201,000 versus 198,000 in the prior week.
10:00 AM ET, James Bullard, the St. Louis Fed President will be making public comments.
Friday 4/07
There are many stories of a market crash on Good Friday, are they true? Learn why the stock market is closed on the Friday before traditional Easter. Here is the link for why the markets are closed.
*The bond markets and the rest of the banking system follow a different schedule and are open.
8:30 AM ET, Employment, A 240,000 rise is expected for nonfarm payroll growth in March. This compares to 311,000 in February. Average hourly earnings in March are expected to rise 0.3 percent on the month for a year-over-year rate of 4.3 percent; these would compare with 0.2 and 4.6 percent in February. March’s unemployment rate is expected to hold unchanged at 3.6 percent.
2:00 PM ET, The Securities Industry and Financial Markets Industry Association (SIFMA) is recommending an early close for those operating under their purview. The U.S. stock market is closed.
What Else
OPEC+, which comprises the Organization of the Petroleum Exporting Countries and allies led by Russia, is due to hold a virtual meeting of its ministerial monitoring panel, which includes Russia and Saudi Arabia, on Monday. OPEC+ is likely to cut oil output at a meeting scheduled for Monday. Oil has recovered to above $80 a barrel for Brent crude after falling to near $70 on March 20.
Media companies are attracting more interest. Investors in Florida this week with an interest in this sector are welcome to see if there is a seat available to them at one of three different roadshow events with Beasley Broadcast Group. Information is available at this link.
Michael Burry’s New Comments Highlight the Importance of Pivoting
With most major indexes in positive territory for the year but still, well below their 2022 starting point, are markets moving to make up their losses? Michael Burry thinks so. In the most positive tweet I have seen from him in almost four years, Burry posted he was “wrong to say sell.” As recently as late January, Burry posted a one-word tweet, “Sell.” The pundits read into it that perhaps another economic crisis similar to the one that occurred in 2008 will crush markets. His almost cult-like following was built by being one of the few individuals who correctly positioned his investments for the housing and subprime mortgage problems that shook the U.S. in late 2008.
Michael Burry Suggests We Have a Bull Market
Market participants are surprised at both Burry’s bullishness and open acknowledgment that he believes he was overly negative and has gotten it wrong this time. The widely followed investor has been bearish and broadcasting this sentiment to his 1.4 million Twitter followers. The suggestions have been that they should consider lightening their holdings. Burry even caught investor attention with his own 13F reported short position in Apple (AAPL).
Burry points to high levels of dip buying, which may have changed today’s market landscape. This is backed up by other reports, including one from Bloomberg that gives a reason that 2023 is shaping up to be one of the best years for dip-buyers.
Importance of Pivoting
He may not have been “wrong.” The best investors understand their time frame and will recognize when market moves are not as expected. On February 2nd, a few days after Burry’s January 31st “sell” tweet, the S&P 500 index closed at 4,180 just after the Fed interest rate target increased by 25 basis points. To date, that is the large-cap index’s highest close of 2023, as weeks of declines followed. The NDX had fallen nearly 3% since that day.
But the trend, if it continues, appears to have changed. The equity market in March has been surprisingly resilient. It has been able to shrug off multi-country concerns surrounding the banks, elevated expectations of an economic downturn, and forecasts that S&P 500 companies will report their biggest quarterly earnings decline since the second quarter of 2020.
Moving from a sell to a more bullish position, for those that are looking to capture short-term moves, seems to be what is implied in his tweet. It may be that Michael Burry was not wrong in direction, as the markets did fall, just wrong in how long they would stay weak.
Take Away
There are long-term trends and short-term trends. Also, trends that are weak and strong through different sectors at the same time. While time will tell if Burry is correct in his most recent direction, the ability to see market sentiment changing and go with it is characteristic of a successful trader.
Much of the Noise this Week Could Be from Outside of US Markets?
The U.S. does not get a great deal of economic data to react to this week. But that usually means the focus shifts, and market participants grasp onto signs they may otherwise ignore. There are many inflation reports during the week. They are from outside of the U.S. economy until Friday morning. Global inflation, not just trading partners could impact other nations. This is because if one region raises its benchmark interest rate, others either follow or risk weakening its own native currency.
March German inflation will come late in the week, starting with Germany’s CPI on Thursday. This will be followed by France’s CPI on Friday, then the full Eurozone later Friday. February PCE data from the U.S. will also be posted on Friday. Australia will be posting its February CPI on Wednesday. Most reports are expected to show declines, with the reservation that much of the reduced increases are derived from lower fuel costs. This would suggest that economic forces raising prices are still largely at work.
Monday 3/27
• No pertinent Economic numbers are to be released
Tuesday 3/28
• 10:00 AM ET, Consumer Confidence, after two months of market surprising declines, the consumer confidence index is not expected to perk up in March, the consensus is instead a further decline in confidence to a consensus 101.0 versus February’s 102.9.
• 10:00 AM ET, Michael Barr, the Vice Chair for Supervision at the Federal Reserve will give Testimony before the Michael Barr, the Vice Chair for Supervision at the Federal Reserve will give Testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs. Watch here.
• 1:00 PM ET, Money Supply, since some banks have experienced difficulties with lower deposits, is becoming closely watch report once more. The prior month, money supply read 30.9 billion. The measure has two main components, M1 and M2. M1 is included in M2. M1, the more narrowly defined measure, consists of the most liquid forms of money, namely currency and checkable deposits. The non-M1 components of M2 are primarily household holdings of savings deposits, small time deposits, and retail money market mutual funds.
Wednesday 3/29
• 10:00 AM ET, Michael Barr will testify before the U.S. House Financial Services CommitteeThe Energy Information Administration (EIA) Petroleum Status Report, provides weekly information on petroleum inventories in the U.S., whether produced here or abroad. The level of inventories helps determine prices for petroleum products.
• 10:00 AM ET, Pending Home Sales during February are expected to rise 1.0 percent on top of January’s 8.1 percent elevation.
Thursday 3/30
• 8:30 AM ET, GDP’s third estimate for 4Q 2022 is expected to remain at 2.7 percent growth in the quarter’s second estimate. Personal consumption expenditures, at 1.4 percent growth in the second estimate, is also expected to remain unchanged.
• 4:30 PM ET, The Fed’s Balance Sheet has received more attention since the beginning of quantitative tightening (Q.T.). The last report should an increase as a result of the new Bank Term Funding Program (BTFP).
Friday 3/31
• 8:30 AM ET, Personal Income and Outlays is expected to have risen 0.3 percent in February with consumption expenditures expected to have increased 0.2 percent. In January there was a rise of 0.6 percent for income and 1.8 percent surge for consumption. Inflation readings for February are expected at monthly increases of 0.4 percent both overall and for the core (versus 0.6 percent increases for both in January) for annual rates of 5.1 and 4.7 percent (versus January’s respective rates of 5.4 and 4.7 percent).
• 10:00 AM ET, Consumer Sentiment in late March is expected to be unchanged from the mid-month flash of 63.4.
What Else
We congratulate all the NCAA basketball teams that made the final four teams competing in the NCAA championships. This includes the Florida Atlantic University basketball team that has made the final four for the first time. While we wish all teams well, the large investor conference sponsored by Channelchek, NobleCon19, will be held at the elaborate College of Business Executive Education at FAU. So this adds to all of our interest at Channelchek. These final March Madness games start on Saturday, April 1st, and while we officially don’t have a consensus read on the final outcome, we hope for excellent play from all. Learn more about the NobleCon19 conference on the FAU campus by clicking here.
Image: Visualization of a cancer cell (nucleus in blue) treated with bi-modular fusion proteins (BMFPs). BMFPs bind to an antigen on the surface of the cancer cell to be destroyed. – Inserm (Flickr)
Understanding the Cancer Treatment and Therapy Segments of Biotech
Transforming research discoveries into new cancer treatments takes investment in time and capital. But no one would argue that the end goals of this healthcare (biotech and pharma) sector are not worth it. Investing in the future of treating tumors, and preventing cancer growth is obviously rewarding from the human standpoint of saving life, but breakthroughs in oncology themselves could provide an investor that understands some of the more promising companies, oversized portfolio rewards. It goes without saying, knowledge and understanding of many companies at different stages of research and development, help the odds of being invested in successful stocks.
Exploding Growth
According to a report by Grand View Research published in early last year, the global oncology drugs market size was valued at $135.7 billion in 2021 and is expected to grow at a compound annual growth rate (CAGR) of 8.3% from 2022 to 2028. The increasing prevalence of cancer, the rising geriatric population, and advancements in drug development and treatment modalities are some of the key factors driving the growth of the novel oncology drugs market.
Relief managing the side effects of treatments, especially chemotherapy, without opiods is also a part of this market. Changing treatment modalities, and growing demand for personalized medicine is still relatively new, and creating more growth opportunities. In addition, a continuing trend of mergers and acquisitions from pharmaceutical companies to expand their oncology drug pipelines and portfolios plays a part in the growth of this sector.
Meet the management of Onconova (ONTX) in NY,NY for lunch on March 28. This is a clinical-stage biopharmaceutical company focused on discovering and developing novel products for patients with cancer. To request attendance, click the registration link here.
Where to Explore Cancer Treatment/Therapy Companies
Investors use Channelchek as one of their trusted outlets to discover and explore smaller public companies involved in oncology treatments and therapies. Below are five companies with a wealth of information housed on the platform. This includes high quality research and video content. For an expanded list of companies, a simple search on Channelchek under “Oncology” or “Cancer” will provide a wealth of more opportunities to discover.
Worth a Deeper Dive?
Onconova Therapeutics Inc. (ONTX) is a clinical-stage biopharmaceutical company focused on discovering and developing novel products for patients with cancer. It has proprietary targeted anti-cancer agents designed to disrupt specific cellular pathways that are important for cancer cell proliferation. Onconova’s novel, proprietary multi-kinase inhibitor narazaciclib (formerly ON 123300) is being evaluated in two separate and complementary Phase 1 dose-escalation and expansion studies. These trials are currently underway in the United States and China. Onconova’s product candidate rigosertib is being studied in an investigator-sponsored study program, including in a dose-escalation and expansion Phase 1/2a investigator-sponsored study with oral rigosertib in combination with nivolumab for patients with KRAS+ non-small cell lung cancer. For more information, please visit www.onconova.com.
Onconova has a roadshow scheduled on March 28 in Manhattan, NY. More information on attending the lunch is available here.
Genprex, Inc.(GNPX) is a clinical-stage gene therapy company focused on developing therapies for patients with cancer and diabetes. Its technologies are designed to administer disease-fighting genes to provide new therapies for populations with cancer and diabetes who currently have limited treatment options. Genprex works with world-class institutions and collaborators to develop drug candidates to further its pipeline of gene therapies in order to provide novel treatment approaches. Genprex’s oncology program utilizes its proprietary, non-viral ONCOPREX® Nanoparticle Delivery System, which the Company believes is the first systemic gene therapy delivery platform used for cancer in humans. ONCOPREX encapsulates the gene-expressing plasmids using lipid nanoparticles. The resultant product is administered intravenously, where it is then taken up by tumor cells that express tumor suppressor proteins that are deficient in the body. The Company’s lead product candidate, REQORSA™ (quaratusugene ozeplasmid), is being evaluated as a treatment for non-small cell lung cancer (NSCLC) (with each of these clinical programs receiving a Fast Track Designation from the Food and Drug Administration) and for small cell lung cancer. Genprex’s diabetes gene therapy approach is comprised of a novel infusion process that uses an endoscope and an adeno-associated virus (AAV) vector to deliver Pdx1 and MafA genes to the pancreas. In models of T1D, the genes express proteins that transform alpha cells in the pancreas into functional beta-like cells, which can produce insulin but are distinct enough from beta cells to evade the body’s immune system. In T2D, where autoimmunity is not at play, it is believed that exhausted beta cells are also rejuvenated and replenished.
Imugene Ltd. (IUGNF) is a clinical stage immuno-oncology company developing a range of new and novel immunotherapies that seek to activate the immune system of cancer patients to treat and eradicate tumours. Our unique platform technologies seek to harness the body’s immune system against tumours, potentially achieving a similar or greater effect than synthetically manufactured monoclonal antibody and other immunotherapies. Our product pipeline includes multiple immunotherapy B-cell vaccine candidates and an oncolytic virotherapy (CF33) aimed at treating a variety of cancers in combination with standard of care drugs and emerging immunotherapies such as CAR T’s for solid tumours. We are supported by a leading team of international cancer experts with extensive experience in developing new cancer therapies with many approved for sale and marketing for global markets.
MAIA Biotechnology Inc. (MAIA) is a targeted therapy, immuno-oncology company focused on the development and commercialization of potential first-in-class drugs with novel mechanisms of action that are intended to meaningfully improve and extend the lives of people with cancer. Our lead program is THIO, a potential first-in-class cancer telomere targeting agent in clinical development for the treatment of NSCLC patients with telomerase-positive cancer cells. Noble Capital Markets initiated coverage of MAIA on February 21, 2023. A copy of the report can be found here.
PDS Biotechnology Corporation (PDSB) is a clinical-stage immunotherapy company developing a growing pipeline of targeted cancer and infectious disease immunotherapies based on our proprietary Versamune® and Infectimune™ T cell-activating technology platforms. We believe our targeted Versamune® based candidates have the potential to overcome the limitations of current immunotherapy by inducing large quantities of high-quality, potent polyfunctional tumor specific CD4+ helper and CD8+ killer T cells. To date, our lead Versamune® clinical candidate, PDS0101, has demonstrated the potential to reduce tumors and stabilize disease in combination with approved and investigational therapeutics in patients with a broad range of HPV-positive cancers in multiple Phase 2 clinical trials. Our Infectimune™ based vaccines have also demonstrated the potential to induce not only robust and durable neutralizing antibody responses, but also powerful T cell responses, including long-lasting memory T cell responses in pre-clinical studies to date. To learn more, please visit www.pdsbiotech.com or follow us on Twitter at @PDSBiotech.
In the investment arena, oncology is a growing part of the healthcare sector, specifically the biotechnology and pharmaceutical segments. Companies that develop and market oncology drugs or provide related services are viewed as uncorrelated to other sectors. The demand for the next generation of improved treatments is expected to be ongoing. While the approval process and regulatory bottlenecks of biotech are unlike any other product category, there are many reasons to review and consider this largely uncorrelated sector – then dig deeper to possibly cancer R &D.
For the smaller companies considered to have the most potential, a good starting point is Channelchek where you’ll find articles, research, videos, and data, all in one place.
