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The Massive Week In Review
It was a big week for stocks, with the SP 500 setting a new record closing high, and the companies like Amazon ($AMZN), Alphabet ($GOOGL), and Microsoft ($MSFT) closing at record levels too. Even Intel ($INTC) reached levels not seen in decades, while shares of Celgene ($CELG), and AMD ($AMD) got hammered.
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Biotechs, as measured by the NASDAQ Biotech ETF ($IBB) fell by nearly 4.7 percent, while the broader SP 500 rose by roughly 25 bps. Technology ($XLK) stocks were up over 2 percent for the week, while discretionaries ($XLY) had a solid showing, powered by Amazon.
Celgene, Ionis ($IONS), and Biogen ($BIIB) fell the hardest during the week. In fact, Celgene’s fall was so massive that its weight in the IBB ETF fell by nearly 2 percent and out of the top four sport, replaced by Regeneron ($REGN). Celgene now weighs about 6 percent, down from about 8 percent. The sell-off in Biotech was broad-based and indiscriminate. The news flow didn’t help, but one can see that only 4 Biotechs were up meaningfully during the week, with 21 flat or down. Ouch.
The technology sector was the complete opposite, with 21 names flat or up with only four stocks down. It was felt like the good old days of the late 1990’s, with Intel ($INTC), Microsoft ($MSFT), and Qualcomm ($QCOM), leading the charge higher.
Intel is now at levels not seen in nearly two decades and seems well on its way back to $48.
AMD ($AMD) shares got crushed this past week, after the company reported results, noting sales for next quarter would be down sequentially, which was more than enough to send the stock into the abyss. The good news for AMD is that the market likes to play the game of filling the gap, which likely means over time shares of AMD will recover.
That same game could also be good news for shares of Celgene, with a revisit to $140 at some point.
However, it could be bad news for shares of Amazon, which are likely to revisit levels in the $960 again at some point as well.
Just look at IBM ($IBM)
I will save Tesla for tomorrow’s write-up since they report on November 1. But it is worth noting that it bounced off its 200 Day Moving Average on Friday, setting up an exciting week.
Till then enjoy your weekend.
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Michael Kramer and the clients of Mott Capital own shares of CELG, TSLA, GOOGL
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.