Crypto News report and Three BioTech Stocks Poised To Spike In 2nd Half Of 2018 (Weekly Report)

Weekly Stock Market Report
May 14th - May 18th, 2018

This is a Weekly Stock Market report with Cryptocurrency, Marijuana and BioTech Stock Insight.

Investors Pour $9 Billion into U.S. Equities

U.S. stocks closed mostly lower on Friday as the major benchmarks posted modest weekly declines. The lingering uncertainty over the outcome of the ongoing trade negotiations between the U.S. and China and bond yields that climbed to its highest level since 2011 caused the declines.

By mid-week, investors pumped in a total of $9 billion fresh funds into the U.S. equities. The market has never been tentative after 2 years of uninterrupted gains. Stocks would climb after a series of impressive earnings reports then ends in red territory on the next trading session.

The Dow Jones Industrial Average closed almost unchanged at 24,715.09, posting a 0.5% weekly loss. The broader S&P 500 Index shed 7.15 points to end the week with the same 0.5% loss. The tech-heavy Nasdaq Composite Index declined 28.13 points to register a 0.7% loss over the week. The Russell 2000 index comprising small-capitalization stocks rose by 0.2%, to 1,628.12 to post a third record close in a row.

Main Indexes closing 05/18/2018*

*points and percentage increase/decrease

https://www.marketwatch.com/markets

Last week ending 05/11/2018

MARKET HIGHLIGHTS

.Trump Changes Stand on ZTE

U.S. President Donald Trump has a change of heart on China’s ZTE Corp. when he announced on Sunday that he is working to give the sanctioned Chinese equipment maker "a way to get back into business, fast."

.HSBC and ING Bank Goes Crypto

Multinational banks HSBC and ING Bank announced on Sunday that they have conducted their first trade transaction using blockchain technology. The two major foreign banks used the blockchain technology Corda.

.Mainland Wants Big Chinese Tech Companies Back Home

China is devising a plan to lure its biggest companies back to their mainland. Some of the country’s leading tech companies like Alibaba (BABA) and Baidu (BIDU) have elected to go public on the U.S. stock market. Tencent opted to list in the Hong Kong exchange.

.Cambridge Analytica Files for Chapter 7 Bankruptcy in NY

Cambridge Analytica LLC filed for voluntary Chapter 7 bankruptcy in a New York court late Thursday. The sharp decline in business following the controversy involving the privacy data breach on Facebook Inc.’s (FB) users forced them to shut down operations and begin bankruptcy proceedings.

Sources/References:
https://www.marketwatch.com/story/us-stocks-close-lower-book-weekly-losses-2018-05-18

https://www.bloomberg.com/news/articles/2018-05-18/it-was-an-unlucky-week-to-throw-8-8-billion-at-the-stock-market

THE GROCERY WAR INTENSIFIES

Amazon.com Inc. is playing its disruptive role to the hilt. This time, the e-commerce giant is igniting another price war. On Wednesday, Whole Foods unveiled its loyalty program that offers special discounts to Amazon Prime members.

This newly implemented loyalty strategy will gauge if Amazon’s $13.7 billion acquisition of Whole Foods would achieve its primary objective. Many feared that the deal and an intensified price war would mess up the $800 billion U.S. grocery industry. The targets, Costco Wholesale Corp., Kroger Co. and Walmart Inc. wants Amazon to bring it on.

Walmart Posts 33% Growth in Online Sales

Walmart Inc. (WMT) $83.64 as of 05/18/2018 (-15.30% YTD)

. The quarterly earnings report presented by Walmart Inc. on Thursday showed that the online sales of the world’s largest brick-and-mortar retailer are growing. It also indicated that Americans still flood to their stores.

. On Thursday, Walmart reported that their online sales grew by 33% during the previous quarter. CEO Doug McMillon is currently preparing Walmart for the digital era. The giant retailer expects online sales to increase further to 40% for the full year.

. Laura Kennedy, vice president of retail insights at Kantar Consulting, disclosed that the e-commerce business of Walmart is just 4% of total sales in the U.S. She said, "The real issue with Walmart is that most of what they sell is food and people don't buy food online."

Kroger Seals Landmark Deal with U.K. Online Supermarket

Kroger Co. (KR) $24.89 as of 05/18/2018 (-9.33% YTD)

. U.S. retailer Kroger Co. has sealed an exclusive deal with UK online supermarket Ocado. The British company will use Kroger’s automated warehouse technology in the United States.

. As part of the deal, Kroger will be investing $247 million that will translate to a 5% stake in Ocado. The U.K. online supermarket considers Kroger the best-positioned supermarket to succeed in the US online grocery market. Kroger is second only to Walmart in terms of US market share.

. Ocado could build as many as 20 robotic warehouses for Kroger in order to accelerate plans of becoming a global supplier of white-label online shopping technology.

Cost-Saving Strategy to Stave Off Competition

Costco Wholesale Corp. (COST) $198.96 as of 05/18/2018 (+6.90 YTD)

. Costco has been outperforming Walmart and Kroger in the stock market with COST breaking out to fresh all-time highs. Amazon is up +34.62% year-to-date but its business is not confined to the grocery market, unlike Costco.

. Customers patronize Costco because they love the kind of price cuts they give. Many grocery shoppers still enjoy a good discount at Costco and now even investors are paying attention because it’s showing in the stock chart.

. The company is set to report earnings by end of May and investors are curious if Amazon’s rampage can muscle Costco’s business. Some analysts are saying that the COST stock is a bit pricey these days but the charts are indicating the price could become even more expensive in the weeks ahead. COST might be a buy option at this time.

Sources/References:
https://qz.com/1279809/amazon-prime-is-making-whole-foods-a-lot-cheaper/

https://www.nytimes.com/2018/05/17/business/walmart-earnings-online-sales.html

https://www.telegraph.co.uk/business/2018/05/17/ocado-strikes-transformational-deal-us-giant-kroger/

https://www.telegraph.co.uk/business/2018/05/17/ocado-strikes-transformational-deal-us-giant-kroger/

https://www.nasdaq.com/article/a-cost-saving-breakout-strategy-for-costco-wholesale-corporation-cm965756

POSITIVE TREND LOOMS IN BIOTECH SECTOR

Image source:https://www.bioinformant.com

Three Biotech Stocks Poised to Spike in 2nd Half of 2018

The negative trend of biotech stocks during the first half of 2018 drove its ranking to No. 27 out of 197 industry groups. According to by Investor's Business Daily, the group ranked fifth 13 weeks ago. The ranking of pharmaceutical companies also dropped from No. 51 to No. 78.

On Wednesday, analysts said the trend is likely to reverse because AbbVie Inc., Celgene Corp. and Regeneron Pharmaceuticals Inc. could spike in the second half of 2018. An accelerating number of drug approvals and launches are forthcoming.

AbbVie Inc. (ABBV) $105.98 as of 05/18/2018 (+9.59% YTD)

. The highly anticipated report data of AbbVie on its study of upadacitinib, the drug as a treatment for forms of arthritis, will be out soon.

. The Food and Drug Administration (FDA) will soon decide on whether to approve AbbVie's drug called Elagolix. The drug is a treatment for endometriosis which is a condition of the female reproductive system. The FDA will also decide the fate of another AbbVie drug named Venclexta which is a treatment for a form of leukemia.

Regeneron Pharma Inc. (REGN) $301.81 as of 05/18/2018(-19.72% YTD)

. The FDA is about ready to render its decision on Regeneron and Sanofi's (SNY) drug for asthma treatment. Dupixent is already being administered by physicians for the treatment of eczema. The two companies also collaborated on cemiplimab which the FDA is considering as a drug to treat an advanced form of skin cancer.

Celgene Corp. (CELG) $78.37 as of 05/18/2018 (-24.90% YTD)

. Investors and stock market traders are anticipating a major turnaround for Celgene when it unveils data from late-stage studies of Revlimid which is their major cancer drug. Celgene partnered with Acceleron Pharma (XLRN) on luspatercept which is a drug for two blood diseases. The results of their studies can be expected anytime soon.

. Celgene will also reveal more information regarding its acquisition of Juno Therapeutics. The company is moving into a class of cancer therapy known as ‘chimeric antigen receptor T-cell’ therapy or CAR-T. Their main rivals in CAR-T are Gilead Sciences Inc. (GILD) and Novartis AG (NVS).

. Analysts from Leerink said in a note to clients that investors should expect a more exciting biotech and pharma stocks come the second half of 2018. There was a dearth of clinical study results to validate their pipelines and re-price stocks during the first half. The second half promises to be more vibrant due to a number of significant clinical events on the horizon.

Source/Reference:
https://www.investors.com/news/technology/biotech-companies-catalysts-2018/

BITCOIN SUPPORT LEVEL FALTERS

Image source: https://techstartups.com

Bitcoin (BTC) – The Flagship Cryptocurrency Struggles

. For the first time since mid-April, the price of Bitcoin sank below $8,000 to $7,925.25 on Thursday. The drop erased the progress and gains the most popular cryptocurrency had made over the previous month.

. When the price dipped to $7,991 on the exchange, it represented a 24-hour decline of more than 4.5%. As of this writing, BTC is making a brief recovery and is trading at $8,244.14. However, the price movement indicates its support level is faltering.

BTC (U.S.) Price Chart as of 05/19/2018

. Analysts believe the gains will likely be short-lived as the odds are stacked against the cryptocurrency. But given this week’s performance and price trajectory, it debunks the prediction of Thomas Lee, co-founder of Fundstrat Global Advisers that BTC would reach up to $64,000 by the end of 2019.

. Fundstrat’s Lee expressed disappointment at the lack of a rally citing the lack of regulatory clarity as the main issue. He added that the support of major institutions is needed in order for the crypto space to grow. He said people should move past the “blockchain not bitcoin” mentality that several prominent figures in business and finance possess.

CRYPTO MARKET NEWS

Rig Maker Canaan Inc. Files for IPO

. Canaan Inc.., the world’s second-largest producer of bitcoin mining hardware, applied on Tuesday to list on the Hong Kong stock exchange. Major financial institutions like CMB International Capital Ltd., Credit Suisse, Deutsche Bank and Morgan Stanley will participate in the syndication of the proposed Initial Public Offering (IPO).

. The Chinese rig maker could soon become the first cryptocurrency company to hit the public markets in Hong Kong. The target funds were not indicated in Canaan’s preliminary prospectus but Bloomberg sees the IPO could yield about $1 billion.

. The Canaan IPO is important because it will provide investors a unique direct exposure to digital coins which in many markets can only be played through companies more distantly connected to blockchain. Henceforth, investing in Canaan is safe as the company would need to comply with stringent financial regulatory standards. It will also lend credence to the industry’s operations and further undertakings.

Crypto Advocate Brings Bitcoin to Mixed Martial Arts (MMA) Stage

. The well-known Bitcoin Cash advocate Roger Ver, the well-known Bitcoin Cash advocate, sponsored the Japanese MMA fighter Mei Yamaguchi on May 18 in Singapore for the ”Atomweight World Championship” title.

. The sponsorship of Yamaguchi aims to bring greater visibility to Bitcoin Cash. Roger Ver wants to showcase how great an athlete Yamaguchi is and to spread awareness of Bitcoin Cash to a larger target demographic. Other cryptocurrencies might follow similar sponsorship deals.

. However, the Japanese fighter lost and failed to wrest the One Championship crown from defending champion Angela Lee. The reigning Lee edged Yamaguchi and won via a unanimous decision.

Sources/References:
https://www.ccn.com/newsflash-bitcoin-price-drops-below-8000/

https://www.coindesk.com/bitcoin-hits-one-month-low-10k-sell-off-resumes/

https://www.benzinga.com/markets/cryptocurrency/18/05/11724888/canaan-maker-of-bitcoin-mining-tech-files-for-ipo

https://toshitimes.com/mma-fighter-mei-yamaguchi-sponsored-by-bitcoin-cash-proponent-roger-ver/

https://www.channelnewsasia.com/news/sport/mma-angela-lee-defeats-mei-yamaguchi-again-one-championship-10248862

INDUSTRY KINGPIN TO LIST ON NYSE

Image source: https://marijuanastocks.com

Canopy Growth Corp. (OTC: TWMJF)– Shares Soar This Week

The largest marijuana company in Canada by revenue and market value, worth more than $4.7 billion, filed its application on Monday to list on the New York Stock Exchange. Canopy Growth Corp. is already trading on the Toronto Stock Exchange under the symbol WEED. The price of WEED has more than tripled in the past 12 months.

. The price TWMJF was $25.25 on Monday and climbed 10.89% to finish the week at $28.00. The trading volume also doubled from 500,000 plus to over a million.

TWMJF $28.00 as of 05/18/2018 (+18.36% YTD)

http://money.cnn.com/quote/quote.html?symb=TWMJF

. Once the NYSE approves the application, Canopy Growth will be the first pot producer to list on the exchange and become the second Canadian marijuana company after Cronos Group. Inc. (CRON) to list outside the country’s border.

. According to Beacon Securities analyst Vahan Ajamian, “Listing on the NYSE should significantly widen shareholder attention to Canopy.” Bruce Linton, Canopy Growth’s Chief Executive Officer, said the choice to list on the NYSE over the Nasdaq Composite Index is because of the additional credibility the former would lend to the company.

. Linton said, “Ultimately one of them is on Wall Street and has a bit more history and cache, and the neighbors on it are pretty substantive companies.” He was meeting Linton with U.S. institutional investors in Boston when he gave his comments.

. The CEO added that the company doesn’t have any operations south of the border and is fully compliant with the laws in every country where it operates. By listing on the NYSE, Canopy Growth would attract more U.S. institutional investors.

. The listing is timely because one of their primary objectives is to expand globally and U.S. institutional investors would help achieve them. The shares of Canopy Growth will likely start trading under the ticker CGC before the end of May.

INDUSTRY NEWS - Cannabis Oil Exports Quadruple

. The cannabis research firm ArcView, in collaboration with BDS Analytics, reported that the North American legal weed market grew to $9.7 billion in 2017 or an increase of 33%.

. About 10 years from now, projected annual sales in North America could reach $47 billion. Few industries can match the potential astronomical growth of legal marijuana. The number of investors is likely to quadruple too.

Image source: http://www.jamaicaobserver.com

. In the report published by Marijuana Business Daily last April, Canadian cannabis oil exports grew from zero-base in 2015 to 100.8 kilograms in 2016. The Canadian parliament was ruled by conservative lawmakers then. But in 2017, the volume quadrupled to 400.4 kilograms, with a record 114 company-based export applications. Applications in 2016 were only 64.

. Data from the same report shows that Germany and Australia accounted for 168.7 kilograms and 145.4 kilograms respectively. The balance of 86 kilograms was divided distributed between Croatia (36.8 kilograms), the Cayman Islands (24.3 kilograms), and five other countries (24.8 kilograms).

. Currently, only Canada and the Netherlands are the only two countries actively exporting any cannabis products. But the competitive advantage belongs to Canadian growers over any new entrants. All eyes are focused on Canada which is expected to become the first developed country in the world to legalize recreational marijuana. The Cannabis Act or Bill C-45 is expected to be enacted into law when after the voting of Canadian senators on June 7.

Sources/References:
https://www.pressherald.com/2018/05/16/canadas-canopy-wants-to-be-first-marijuana-company-listed-on-new-york-stock-exchange/

https://www.nasdaq.com/article/canadian-cannabis-oil-exports-quadrupled-in-2017-cm964771

THE WEEK TO COME

Image source: http://www.businessinsider.com

Even if U.S. stocks appear tentative last week, they’re still 5.1% higher than this year's low. Other key measures have risen as well to lend market support. The leading economic index (LEI) that measures 10 key economic trends, such as unemployment claims, new manufacturing orders, and stock prices has risen for the seven straight months.

In particular, this week's readings on retail sales also showed an increase, reflecting positive labor market conditions and elevated consumer confidence. Thus, the view is that the economy will remain on sound footing and positioned to expand in 2018.

This coming week, investors will be looking out for data on New Home Sales Wednesday, Existing Home Sales on Thursday, and Consumer Sentiment on Friday.

Source/Reference:
https://www.edwardjones.com/market-news-guidance/recent-news/weekly-recap.html

https://www.StockMarketExpert.com

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