This Biotech Stock Could Break Out Today

Author

Adam Garcia
October 16, 2024

Good morning. It's October 16th, and in today’s edition, we’ll look at U.S. Bancorp’s positive earnings statement, a slide in chip stocks after ASML’s underwhelming demand outlook, and a tech stock that has nearly tripled itself in premarket trade.

Previous Close 📈

Stocks slipped on Tuesday, with the Dow and S&P 500 both falling 0.75% and 0.76%, respectively, after recently hitting record highs. The Nasdaq Composite dropped 1.01%, driven by declines in tech stocks, particularly semiconductors.

Futures

U.S. stock futures are little changed today. S&P 500 futures are flat, while Nasdaq 100 futures have ticked up 0.2%, and Dow futures are down by 24 points.

Healthcare

A small biotech company is developing an antiviral drug that could change the game in fighting viral infections like RSV and COVID-19.

The early trial results are impressive, showing that this new treatment is safer and more effective than anything currently on the market. With a multi-billion-dollar market opportunity ahead, the potential for this stock to break out is huge.

Experts believe that as the treatment progresses through the approval process, investor interest could surge.

If you’re looking for a stock with explosive potential, this could be the one.

What to Watch

Key earnings reports including Abbott Laboratories (NYSE: ABT) and Morgan Stanley (NYSE: MS) will be announced today before the market opens.

The Import Price Index for September will be released at 8:30 a.m. ET, providing insights into price trends in international trade.

After the closing bell, CSX Corporation (NYSE: CSX), Kinder Morgan (NYSE: KMI), Crown Castle (NYSE: CCI), Discover Financial Services (NYSE: DFS), Equifax (NYSE: EFX), and PPG Industries (NYSE: PPG) will report their results.

Banking

U.S. Bancorp Beats Estimates With Higher Q3 Net Interest Income

U.S. Bancorp reported higher-than-expected third-quarter net interest income (NII), benefiting from higher borrowing costs. The Minneapolis-based bank generated $4.14 billion in NII, surpassing the projected $4.04 billion. The NII figure reflects what the bank earns from lending minus what it pays for deposits.

This positive outcome follows similar reports from other banks, including PNC Financial Services and JPMorgan Chase, both of which also posted stronger-than-expected NII after the Federal Reserve’s recent 50-basis-point rate cut.

Citizens Financial Group also disclosed its third-quarter earnings, showing net interest income of $1.37 billion and deposits of $175.2 billion, just shy of market forecasts.

Investors are closely watching how the Fed’s policy shift is impacting regional banks, which rely heavily on lending income.

U.S. Bancorp’s CEO credited the performance to loan mix improvements, asset repricing, and effective liability management. Despite these gains, the bank’s shares are up 8.6% this year, trailing the S&P 500 Financials Index’s 25% rise. However, they are rising by 1.7% in premarket trade.

Semiconductors

ASML's Revised Forecast Sends NVIDIA, AMD Sliding Lower Amid Concerns Over Chip Demand

ASML Holdings (ASML) cut its 2025 guidance, leading to a drop in key chipmaker stocks like NVIDIA (NVDA) and Advanced Micro Devices (AMD). While NVIDIA dipped nearly 4.5%, AMD fell 5.2% on Wednesday.

The revision has sparked concerns about potential challenges in the broader semiconductor sector. ASML’s outlook adjustment comes amid reports that the Biden administration may limit AI chip sales to certain countries, adding further uncertainty to the industry.

Despite the revised forecast, Daniel Newman, CEO of The Futurum Group, believes the outlook isn't necessarily negative for AI-related sectors. He pointed out that ASML's CEO highlighted the strength of AI during the announcement.

However, the lagging recovery in traditional sectors like communication networks, industrial, and IoT chips, along with weaker-than-expected shipments of AI PCs, has raised concerns.

NVIDIA, which recently hit an all-time high, saw its stock drop, surprising some analysts. Newman suggested that the pullback might reflect profit-taking after a significant run-up, rather than a fundamental issue with NVIDIA itself.

He also noted that ASML’s inability to sell to China due to potential restrictions is likely to impact its business.

Airlines

Boeing Secures $35 Billion in Credit and Offerings to Tackle Ongoing Challenges

Boeing has taken steps to shore up its financial stability as it faces ongoing challenges, including a labor strike and escalating operational costs.

Late Monday, the aerospace giant secured $10 billion in supplemental credit from a group of banks led by Bank of America Securities, Citibank, Goldman Sachs, and JPMorgan. In addition, Boeing filed with the SEC for a mixed shelf registration to offer up to $25 billion in new debt securities and shares.

These measures come amid labor disputes with Boeing's largest union and challenges in ramping up aircraft production following multiple safety incidents involving the 737 Max and 787 Dreamliner jets. Boeing also recently announced it will end production of its 767 tanker jet and delay the release of its 777X widebody jet.

Boeing reported a preliminary GAAP loss per share of $9.97 for the third quarter, with negative operating cash flow of $1.3 billion. Additionally, CEO Kelly Ortberg announced plans to lay off 10% of Boeing’s workforce, affecting around 17,000 employees across its divisions, in an effort to navigate its current difficulties and ensure long-term competitiveness.

The company is expected to provide further details on strike costs and overall financial effects during its third-quarter earnings release on October 23.

Market Indicator

The #1 market indicator that predicted the COVID crash is lighting up once more, suggesting that a major pullback could be just around the corner.

This time, the warning signs are clear—volatility is spiking, and the market's stability is under pressure.

Those who pay attention now could avoid being caught off guard, just like those who acted before the last downturn.

Timing is everything, especially when the market starts to shift.

Movers and Shakers

Versus Systems [VS] - Last Close: $1.15

Technology firm Versus Systems' stock is surging nearly 350% in premarket trading.

The firm has entered into two major agreements with ASPIS Cyber Technologies, which will significantly boost Versus' financial and technological position.

ASPIS has committed $2.5 million in funding, with an initial investment of $500,000 and a further $2 million by mid-November, helping Versus meet Nasdaq's listing requirements for minimum shareholders' equity.

Additionally, Versus will license its gamification and QR code technology to ASPIS for use in cybersecurity, securing monthly fees starting in 2025.

These developments strengthen Versus’ compliance plan and enhance its technological reach, driving investor optimism.

My Take: This could be a major takeoff moment for Versus. Keep this stock on your radar for future growth.

Biodexa Pharmaceuticals PLC [BDRX] - Last Close: $5.01

Biodexa Pharmaceuticals is rallying by more than 150% in premarket trading today.

The company has successfully appealed Nasdaq's decision to delist it.

The Nasdaq Hearings Panel has granted Biodexa more time to meet the minimum bid price requirement of $1.00 per share.

The company now has until October 31, 2024, to maintain this price for 20 consecutive trading days to remain listed on the Nasdaq Stock Market.

This positive development has reignited investor confidence, causing a significant jump in the stock price.

Biodexa is also advancing key treatments for diseases with unmet medical needs.

My Take: While the delisting appeal is a positive news for the firm, Biodexa is a tiny, low-float stock which hasn’t had a great track record. Keep this on your wait-and-watch list for now.

Novocure Limited [NVCR] - Last Close: $17.78

Novocure shares are up by nearly 35% in premarket trading.

The U.S. FDA has approved its Optune Lua device for treating metastatic non-small cell lung cancer (NSCLC).

Optune Lua is a novel, wearable device that uses Tumor Treating Fields (TTFields), which apply electric fields to disrupt cancer cell division, leading to cell death.

The approval marks the first significant advancement in treating this patient population in over eight years.

The pivotal Phase 3 LUNAR trial showed a substantial improvement in overall survival rates for patients, which has driven the stock's sharp increase.

My Take: The FDA approval could be a major booster for Novocure’s fortunes. Keep your eye on this stock for future growth.

Outbreak Solution

A small yet innovative biotech firm has just received FDA approval for its breakthrough antiviral drug.

With FDA approval in hand, the company is poised to tap into a multi-billion-dollar market, and its stock could be on the verge of a major breakout.

The potential for growth is enormous as the treatment moves closer to widespread adoption.

If you’re looking for a stock with explosive potential, this could be your chance to get in early before the market takes notice.

Everything Else

  • CSI 300 dipped amid growing skepticism over Beijing's slow stimulus response.

  • Klarna secured a multi-year deal to support £30B U.K. lending growth.

  • Airbus faces job cuts as the defense and space division struggles with costs and profit decline.

  • India followed global practice in satcom spectrum allocation, avoiding an auction amid the Musk vs. Ambani debate.

  • LVMH reported its first quarterly sales decline since the pandemic as Chinese demand weakens.

  • Just Eat Takeaway shares dipped 4.2% after reporting lower third-quarter orders and GTV.

  • Generative AI investments will drive growth in tech funding across U.S., Europe, and Israel.

  • Italian banks and insurers will bear the cost of a €3.5 billion budget allocation under the new government plan.

That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.

Best Regards,

— Adam Garcia
Elite Trade Club

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