A strong response to Biogen's (BIIB) earnings report and progress on a drug for early-stage Alzheimer's is boosting the biotechnology sector this morning. However, both McDonald's (MCD) and UPS (UPS) have negative responses to their reports and that is keeping the upside contained in the broader market.
Breadth is running 3600 gainers to 3100 decliners but the Russell 2000 ETF (IWM) is pausing while the S&P500 and the Nasdaq 100 are leading. The S&P 500 is looking to fill its opening gap and there are pockets of profit-taking developing.
Essentially we have a market that has become a little extended and a little giddy due to recent positive action and it needs some rest and resets. This looks like a normal pause within an uptrend rather than the beginning of a major reversal but that can always change.
My stock of the week, InMode (INMD) , is seeing some good follow through this morning and biotechnology names like Global Blood (GBT) and Biohaven (BHVN) are acting well.
One small-cap of interest on my radar here is Digital Turbine (APPS) which is gaining some momentum. I continue to watch for bottoming action in SmileDirectClub (SDC) which should see a boost as shorts take their profits and move on.
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The Russell 2000 climbed this week as the big-cap tech names reported and Robinhood's initial public offering disappointed. Now will we see a deeper correction?
I don't wholeheartedly agree the offering price is where the market has said it will buy the stock.
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