Listen below or on the go on Apple Podcasts and Spotify
An advisory panel votes against ecstasy treatment for PTSD. (0:16) Services activity picks up. (1:34) You know what they call a Chicken Big Mac in Europe? (4:14)
This is an abridged transcript of the podcast.
Our top story so far. No turntables in the therapist’s office just yet. Leading developers of psychedelic medicines traded lower after a panel of independent advisors to the U.S. FDA declined to endorse marketing authorization for psychiatric therapy for MDMA, also known as ecstasy.
Notable decliners include Mind Medicine (MNMD), Atai Life Sciences (ATAI), COMPASS Pathways (CMPS), and Cybin (CYBN).
The selloff comes after the FDA’s Psychopharmacologic Drugs Advisory Committee voted overwhelmingly against approving the marketing application submitted by Lykos Therapeutics for MDMA targeting post-traumatic stress disorder.
Melisssa Barone, a panel member who voted against the drug, said: “It seems like there are so many problems with the data—each one alone might be okay, but when you pile them on top of each other, there’s just a lot of questions still I would have about how effective the treatment is.”
On the economic front, ahead of this Friday’s jobs report, ADP reported that U.S. private sector employment increased by 152,000 in May, less than the 173,000 expected and slowing from 188,000 in April.
The numbers jibe with yesterday’s lower JOLTS figures, which showed a softening labor market. But frankly, economists are very skeptical about the ADP figures given their poor correlation with official numbers and change of methodology.
And the ISM Services PMI logged in at 53.8 in May, beating the 51.0 consensus and pulling up from 49.4 in April. The print indicates that the sector’s economic activity returned to growth after a month of contraction.
And in meme country, the trading activities of GameStop (GME) investor Keith Gill, also known as Roaring Kitty, have caught the attention of the Massachusetts securities regulator, according to a Tuesday media report.
Specifically, Massachusetts Secretary of State Bill Galvin is probing the activities of Gill, who reignited the meme-stock rally in mid-May, the Wall Street Journal reported.
The investigation adds pressure on Gill. On Monday, the newspaper reported that Morgan Stanley’s (MS) E*Trade is considering booting the meme-stock trader off the online brokerage platform due to growing concern over potential stock manipulation from his recent purchases of GameStop (GME).
The WSJ also noted that the Securities and Exchange Commission has been assessing Gill’s trading in GME call options around the time of his social media posts. But it couldn’t be determined whether the regulator was reviewing Gill, in particular.
The scrutiny on Gill’s trades is likely to continue, but after the investigations into the initial meme surge that included Congressional hearings and covered everything from naked short selling, dark pool money, and gamification of trading, very little happened.
Among active stocks. HP Enterprise (HPE) rallied sharply after the company reported fiscal second-quarter results and guidance that topped expectations.
The company has also thrown its hat in the artificial intelligence ring, and Wall Street is starting to notice. Revenue in the server segment, its largest, jumped 18% year-over-year to $3.9 billion as AI revenue “doubled sequentially,” above the company’s prior guidance.
Bernstein analyst Toni Sacconaghi said that AI server revenue continues to be strong. However, bookings were “relatively weak,” and there are some questions about how HP Enterprise classifies AI as it includes supercomputing units.
Elliott Management has rebuilt a substantial stake in SoftBank (OTCPK:SFTBY) (OTCPK:SFTBF) and is pushing the Japanese tech conglomerate, founded by Masayoshi Son, to launch a $15 billion share buyback. That’s according to the Financial Times.
Elliott, founded by Paul Singer, has a stake of more than $2 billion and has engaged directly with SoftBank’s senior management over the past two to three months.
Dollar Tree (DLTR) posted mixed results with its Q1 earnings report and confirmed its review of strategic alternatives for the Family Dollar business segment. That could include a potential sale, spinoff, or other disposition of the business.
Same-store net sales increased 1.7%, driven by a 2.8% increase in traffic, offset by a 1.1% decrease in average ticket. Meanwhile, Family Dollar’s same-store net sales increased 0.1%, driven by a 0.9% increase in traffic, offset by a 0.8% decrease in average ticket.
In other news of note. What the cluck? The Luxembourg-based EU General Court ruled against McDonald’s (MCD) in a long-running trademark case, saying the company does not have the right to use the Big Mac trademark for its poultry products. That means no trademark on the Chicken Big Mac.
The dispute centered around Ireland-based fast food chain Supermac’s attempt to revoke McDonald’s trademark on the Big Mac. The EU Intellectual Property Office dismissed the attempt and confirmed McDonald’s usage, but the General Court has now partially annulled the office’s decision and rejected McDonald’s arguments.
The court ruled that McDonald’s has not “proved genuine use” of the Big Mac trademark in poultry products in a consecutive period of five years and so loses the trademark. The ruling may be appealed to the EU’s top court, the Court of Justice.
Doesn’t seem too much of a blow to MCD; Royale with Cheese did just fine.
And in the Wall Street Research Corner. Wells Fargo Analyst Chris Harvey created a new midcap portfolio with Overweight-rated stocks to provide “upside equity market participation along with healthy downside protection.”
Midcap growth is up 13.1% through May. Among the stocks recommended are Spotify (SPOT), Royal Caribbean (RCL), Lennar (LEN), Devon Energy (DVN), Block (SQ), Parker-Hannifin (PH), CrowdStrike (CRWD), and HubSpot (HUBS).
Read the full article here