Crude Oil Higher on Supplies Drawdown

API reported a draw of 8.67 million barrels in U.S. crude oil inventories for last week

Gasoline inventories fell by 1.726 million barrels, Distillate inventories rose by 124,000 barrels

 

crude-oil-trades-up-as-japanese-economic-data-impresses
Crude oil is higher following inventory data

For the week ending May 26, the American Petroleum Institute ( #API ) reported a draw of 8.67 million barrels in United States crude oil inventories, compared to analyst expectations of a draw of 2.8 million barrels.  Gasoline inventories fell by 1.726 million barrels, according to the API. #Distillate inventories rose this week by 124,000 barrels, while inventories at the Cushing, Oklahoma, site fell by 753,000 barrels.

It appears that refiners have been making gasoline in anticipation of the summer driving season. Whatever the reason for the drawdown, it is welcomed by producers. Oil prices have fallen this week, from WTI at $51.41 last week to $48.24 on Wednesday ahead of the API report. Brent traded at $50.68 ahead of the report—off from $54.11 this time last week.

WTI = West Texas Intermediate

The Vienne Group Decision

Last week, the Organization of Petroleum Exporting Countries, #OPEC, ministers meeting in Vienna produced an agreement to maintain production reduction of 1.8 million barrels per day for another nine months. The so-called Vienne Group, which is OPEC nations plus allied oil producing nations, most notably Russia, are hoping the move would support prices.  Saudi Arabia last week announced it would reduce oil exports by 15% to the US to manually adjust the inventory equation, in hopes of lifting prices.

Rig Counts Rise

Prices are pushed lower by continued rise in the domestic production and a rise in rig counts in the U.S. and Canada. The U.S. rig count rose 7 rigs last week to 915, with oil rigs up 2 to 722, gas rigs up 5 to 185, and miscellaneous rigs unchanged at 1. The U.S. Rig Count is up 511 rigs from last year’s count of 404, with oil rigs up 406, gas rigs up 98, and miscellaneous rigs unchanged. The Canadian Rig Count rose 8 rigs last week to 93, with oil rigs up 4 to 40 and gas rigs up 4 to 53. The Canadian Rig Count is up 50 rigs from last year’s count of 43, with oil rigs up 26, gas rigs up 25, and miscellaneous rigs down 1 to 0.

Five Weeks Drawdown

This week inventory number showed a significant draw in itself. The last five reporting weeks has seen a reduction of 19.277 million barrels, according to API data, and 15.9 million barrels using the Energy Department’s Energy Information Agency’s #EIA numbers. While the draw doesn’t offset the builds we saw in Q1 but drawdown trends from Q1 to Q2 cannot be ignored, and should be a positive sign for the industry.

EIA reports its inventory data on Thursday morning, delayed one day due to the Memorial Day holiday.

At last check, WTI was trading at $48.72 per barrel, up 42 cents. WTI has a 52-week trading range of $44.13 – $58.15. Brent last traded at $51.20 per barrel, up 44 cents. Brent has a 52-week trading range of $46.47 – $60.21 per barrel.

Visit Stockwinners to read more.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Exact Sciences Higher on UnitedHealth News

Cologuard is a noninvasive, at-home screening test for colon cancer

About 30M more people will be able to be reimbursed for Cologuard tests as a result of UnitedHealth’s decision

 

http://stockwinners.com
UnitedHealth to begin covering Cologuard July 1

 

EXACT Science ( $EXAS ) shares are climbing after health insurance giant UnitedHealth ( $UNH ) agreed to cover the company’s Cologuard test, starting July 1.

Cologuard is a noninvasive, at-home screening test for colon cancer. It is for adults 50 years or older who are at average risk for colon cancer, and it is available by prescription only.  As of March 2017, the list price of Cologuard was $649.

A number of analysts responded to the news by raising their price targets on EXACT Sciences.

TARGET INCREASES:

Canaccord analyst Mark #Massaro raised his price target on EXAS to $40 from $38.

About 30M more people will be able to be reimbursed for Cologuard tests as a result of UnitedHealth’s decision, and a total of more than 227M people will be able to get reimbursed for the test by their insurers as of July 1, the analyst stated. The analyst expects the company’s 2017 revenue to come in at the high end of its 2017 guidance range of $195M-$205M, although he noted that the consensus outlook was $210M before yesterday.

He increased his 2020 earnings per share estimate for the company to 90c from 80c, but he believes that estimate could be conservative. The analyst kept a Buy rating on the stock and continued to identify it as a top pick.

#Benchmark analyst Raymond Myers increased his price target on Exact Sciences to $50 from $34 as he raised his 2018 test volume growth forecast for Cologuard to 55% from 50% and increased his revenue forecast per test to $470 from $440. He kept a Buy rating on the shares.

DEMAND SEEN AS STRONG: “Essentially” all major insurers now cover Cologuard and demand for the test should continue to be strong, according to William Blair analyst Brian Weinstein. By the middle of 2018, most major insurers should have deals with EXACT Sciences to cover the test for at least the $510 that Medicare is paying, the analyst predicted. He kept an Outperform rating on the stock.

Meanwhile, shot-seller site #Citron Research views UnitedHealth’s (UNH) coverage of Cologuard as a negative for Exact Sciences (EXAS), claiming Exact had to lower the price of the test, making it unprofitable.

PRICE ACTION: In morning trading, EXACT Sciences rose nearly 10% to $35.90.

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Avoid Bank Stocks, JP Morgan Chart Signals Sell

Bank stocks rose on prospects of tax-cuts but Trump’s problems have sidelined his agenda

Yield Curve is now Flattest since the Election rally began

 

jpm-20170531
Head and Shoulders pattern on JP Morgan (JPM)

JP Morgan (JPM), the DJIA component, shares rose along with the rest of the market  following last year’s election on expectation of tax cuts and other pro-growth measures. But Trump has been embroiled in troubles, distracting him from his legislative agenda. Republicans are divided on key issues, including how much to cut and how to offset the lost revenue, if at all. Easing of bank regulations and oversight imposed by the Frank-Dodd Law appear to have taken backseat to the Russian and Comey investigations.

On a 1-year daily chart of  JPM stock chart there is a clear active bearish head and shoulders pattern that became active when price broke below the neckline at the $82 area.

Rising Rates

Economic growth spurs demand for loans, but it also encourages higher interest rates and wider spreads between banks’ short-term funding costs and long-term lending rates. Yield spreads widened after the election. But with the Federal Reserve raising short-term interest rates and the 10-year Treasury yield sliding toward 2017 lows, the yield curve is the flattest since the 2016 election. That’s bad news for banks’ net margins and not a comforting sign for the economy as a whole. It is widely expected that the FOMC will raise its key lending rate by 25 bp on June 9th.

Sector Troubles

JP Morgan is considered as one of the best operated large banks. If you add impact of other not-so-well-managed banks to the sector, you will realize that the Financial Select Sector ETF ( $XLF ) is heading lower.

This morning New York City Mayor Bill de Blasio and Comptroller Scott M. Stringer jointly announced that they will vote to prohibit New York City from entering into new contracts for deposits with Wells Fargo ( $WFC ). The beleaguered bank has lost many executives and customer over its various marketing schemes.  Shares of WFC are now in a well defined bearish downward pattern. Shares are trading well below their 200-day moving average #MA .

Bank of America ( $BAC ) announced that it expects to complete the sale of its consumer credit card business in the United Kingdom, #MBNA Ltd., to #Lloyds Banking Group (LYG). The sale is expected to improve #Basel 3 risk-based capital ratios by approximately 11 basis points under the Advanced approaches and 15 basis points under the Standardized approach in the second quarter ending June 30, 2017. The U.K. consumer credit card portfolio had approximately $9.4B in credit card receivables and earned $211M in interest income in the first quarter of 2017. This type of news should send BAC shares higher but BAC is down 2.7% and has broken below its support level of $23.

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

 

McDonald’s to Offer Delivery

Delivery is now available at more than 2,000 McDonald’s locations

In June, 3500 MCD stores will offer delivery

mcd
MCD to expand its delivery business

#McDonald’s ($MCD) will expand delivery of its food to 3500 stores in the U.S. by June. McDonald’s already has well-established delivery services in Asia and the Middle East, where for some restaurants delivery is 40 percent of sales. Last year, the DJIA component garnered nearly $1 billion in delivery sales globally.  McDonald’s CEO Steve Easterbrook said delivery will be available in 3,500 locations by June, up from the more than 2,000 locations that currently offer delivery.

In the U.S., 60 percent of delivery orders were placed in the evening or late at night, and arrived, on average, within 30 minutes, he said.

“We are encouraged by early results in the U.S. where delivery is resonating well, particularly with our younger customers,” Easterbrook said.

Delivery has become a key priority in fast food, but hiring a fleet of drivers can be a huge undertaking for chains. Companies like Uber and GrubHub ($GRUB) can help ease the financial burden on restaurants by acting as a third-party delivery service. The trade-off is the chain doesn’t have direct control over the employees making the deliveries.

Other fast food restaurants have adopted various ways to increase their sales. Domino’s Pizza (DPZ), the king of pizza delivery business, has been remodeling its stores to encourage diners to dine in its restaurants. It is expected that other fast food chains will join the delivery craze. Companies that are expected to offer delivery include Burger King (QSR) and Jack In the Box (JACK).

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Alnylam’s Givosiran receives FDA’s Breakthrough Therapy

Porphyria is a group of diseases in which substances called porphyrins build up, affecting the skin or nervous system

Givosiran was found to be generally well tolerated with no drug-related serious adverse events

ALNY-LOGO

Alnylam Pharmaceuticals $ALNY announced that it has received Breakthrough Therapy designation from the U.S. Food and Drug Administration for #givosiran, an investigational RNAi therapeutic targeting aminolevulinic acid synthase 1 for the prophylaxis of attacks in patients with acute hepatic porphyria.

“Promising results from the ongoing Phase 1 study of #givosiran demonstrating meaningful reductions in the occurrence of porphyria attacks formed the basis of the Breakthrough application,” the company says Updated results from this trial will be provided in an oral presentation on June 26 at the International Congress on Porphyrins and Porphyrias being held in Bordeaux, France.

The ongoing portion of the Phase 1 study of givosira is being conducted as a randomized, double-blind, placebo-controlled study.

Data presented at the 2016 American Society of Hematology meeting held in Atlanta demonstrated initial evidence for clinical activity with givosiran including meaningful reductions in both the number and frequency of porphyria attacks, as well as meaningful reductions in annualized hemin doses required in patients with acute intermittent porphyria, the most common and severe form of AHP.

In the first two dose cohorts, givosiran was found to be generally well tolerated with no drug-related serious adverse events. In the third dose cohort, which remains blinded, one death due to acute pancreatitis, considered unlikely related to givosiran or placebo, was reported after the data transfer date.

Porphyria is a group of diseases in which substances called porphyrins build up, affecting the skin or nervous system. The types that affect the nervous system are also known as acute #porphyria. Symptoms of acute porphyria include abdominal pain, chest pain, vomiting, confusion, constipation, fever, and seizures. These symptoms typically come and go with attacks that last for days to weeks. Attacks may be triggered by alcohol, smoking, stress, or certain medications. If the skin is affected, blisters or itching may occur with sunlight exposure.

The disease is usually inherited from a person’s parents and is due to a mutation in one of the genes that make heme. Some types are autosomal dominant and others are autosomal recessive. One type, porphyria cutanea tarda, may also be due to increased iron in the liver, hepatitis C, alcohol, or HIV/AIDS. The underlying mechanism results in a decrease in the amount of heme produced and a build-up of substances involved in making heme. Porphyrias may also be classified by whether the liver or the bone marrow is affected.  About 1 in 75,000 people have acute porphyria attacks. They may either have one of the acute porphyrias or they may have a mixed porphyria.

Separately,  the company announced that management will present a company overview at the #Jefferies 2017 Healthcare Conference on Tuesday, June 6, 2017 at 9:00 am ET in New York City.

PRICE ACTION:  ALNY closed at $64.09. The stock has a 52-week trading range of $31.38 – $80.11. Other stocks to watch: ICPT, AZN, INCY, BIIB.

To read stories similar to this, sign up for a free trial membership to Stockwinners; be sure to check the Market Radar section.

The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.