Weekend Update #122
Welcome to Blue Room's Weekend Update. Each week, we're sharing what companies we're researching and the what, the who and the how that we think makes the companies interesting and unique. This roundup is brought to you weekly by a group of interns, creative minds, artists and investors who believe that through best in class investing along with the democratization of financial education we can do great things together. Enjoy, Explore and Share.
BLUE ROOM would like to express condolences to those impacted by the shooting in Louisville this week. We believe in safe and protected communities and send our prayers to the five killed and eight injured, as well as the families and friends of those affected.
The S&P 500 Index tallied its fourth straight positive week on Friday, as company announcements, earnings and economic data contributed to speculation around the pace and direction of FOMC rate hikes.
Beginning on Monday, Tesla announced price cuts across its EV portfolio, Apple reported PC shipments down 41% in the first quarter, Samsung messaged that they will be pulling back wafer starts and CAPEX in 2023, and French President Emmanual Macron called for “financial autonomy” in the EU after his visit to China. On Wednesday, headline CPI came in light as comps post Russia’s invasion of Ukraine last year decelerated inflation in energy and foods. Core CPI came in line with estimates, but showed higher month-over-month and year-over-year increases, the first time in 2-years. The year-over-year measure, excluding foods and energy, rose in March to 5.6% after increasing 5.5% in February. The following day, PPI showed disinflation on a year-over-year basis, primarily attributable to deflation in energy prices. Initial jobless claims came in at 239,000, above expectations for 235,000 while continuing claims were down to 1.810 million versus an increase to 1.833 expected. Fed meeting minutes released on Thursday as well, indicating that policymakers are inclined to bring down their estimates for the terminal fed funds rate they believe to be sufficiently restrictive in light of the financial sector turmoil in February. Friday kicked off the first round of earnings for the banking sector with JPMorgan Chase, Citigroup and Wells Fargo reporting. JPM reported an earnings beat, jumping 7.6% intraday, after raising its net interest income forecast by $8 billion to $81 billion. Citigroup shares also rose nearly 5.0% as the bank beat revenue and EPS estimates by a solid margin. Shares of Wells Fargo did not fare as well as its peers on Friday as management issued guidance that held net operating income steady, despite also posting an EPS beat in the quarter. The week ended with swaps markets pricing a quarter-point hike in May, and potentially another hike in June.
This week in the political realm, French President Emmanual Macron called upon European nations to cultivate a level of strategic autonomy to avoid becoming vassals in the event of a global conflict between the U.S. and China. “If the tensions between the two superpowers heat up…we don’t have the time nor the resources to finance our strategic autonomy and we will become vassals,” Macron told Politico.
Earlier in the week, news surrounding two federal court rulings on abortion access has stirred an uproar after one case was filed in Texas to outlaw the production and use of mifepristone, a drug used to terminate pregnancies. In opposition, Democratic representatives sued to expand the access to such pills in 17 states. On Wednesday, a court order provided the abortion drug to remain available while an expedited appeal for a ban is underway.
For the Week of April 10, 2023
S&P 500 4,126.5 0 +0.76%
Dow Jones 33,886.47 +1.20%
Nasdaq 12,123.46 +0.29%
Thank you Blue Room Analyst IAN CARTER
OVERVIEW
United States Producer Price Index YoY and MoM
PPI is a family of data that gauges the costs of production. There are three areas of PPI classification that use the same pool of data from the BLS: industry, commodity and commodity-based final and intermediate demand (FD-ID).
Finished Goods YoY~ Finished goods are goods that have completed the manufacturing process but have not yet been sold or distributed to the end user.
Final Demand ~ PPI for final demand measures the average change in prices received by domestic producers of goods, services and construction sold for personal consumption, capital, investment, government and export.
Question & Answer Session
Let’s start with your allogeneic CAR T efforts. Based on your 4+ years in allo CAR T, what are the learnings to date and where do you go from here?
Michael Amoroso — President & Chief Executive Officer
Michael Amoroso worked previously on two autologous CAR T projects
In the last 3-4 years, Precision has worked hard to put a world-class team together
They’ve learned that how you make the CAR T matters
ARCUS is also paramount to the success with azer-cel
A single gene edit helps with safety
But the more you edit the product, the more you differentiate the product and lose potency of T cells
The insertion efficiency of ARCUS knocking into the TRAC locus vs. TCR is incredibly high and that’s an important factor
Precision also has a world-class CMC team — They’ve worked hard on attributes for efficacy and safety
These have given Precision very high response rates and durable responses
They are ultimately still trying to ameliorate the safety profile a little bit
It’s a very fragile population in the post-autologous CAR T failure population
A group where urgent speed-to-market is needed
On the in vivo side. How do you think about AAV vs. LNP for delivery? What is your strategy?
Michael Amoroso — President & Chief Executive Officer
If you want to be a premier gene editing company, you have to have a great ability to deliver the gene editing tool
On Sunday, April 2, OPEC+ surprised markets by announcing production cuts of more than 1.1 million barrels per day in addition to the 500,000 barrel per day cut announced by Russia last month. The press release caught many industry analysts by surprise after Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, remarked on February 14 that “the agreement that we struck in October is here to stay for the rest of the year, period.” The move by the cartel had profound impacts on oil markets, with the spot price of WTI and Brent responding emphatically by increasing as much as 8% on the news in trading on Sunday.
OPEC+ stated in a press release nearly 24 hours before the energy ministers were due to convene that “the Meeting noted the following voluntarily production adjustment announced on 2 April 2023 by Saudi Arabia (500 thousand b/d); Iraq (211 thousand b/d); United Arab Emirates (144 thousand b/d); Kuwait (128 thousand b/d); Kazakhstan (78 thousand b/d); Algeria (48 thousand b/d); Oman (40 thousand b/d); and Gabon (8 thousand b/d) starting May until the end of 2023. These will be in addition to the production adjustments decided at the 33rd OPEC and non-OPEC Ministerial Meeting.” For reference, the 33rd OPEC+ meeting took place in October 2022 and concluded with the producer group slashing output by 2 million barrels per day.
Thursday
April 13, 2023
12 PM
BLUE ROOM
GLOBAL MEETING
NUMBER 113
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