On Friday, shares of Biogen Idec (BIIB) popped on news of positive developments in the treatment of Alzheimer’s disease. The news sent their drug from Phase II to Phase III development. Then, Wall Street began jumping on the bandwagon. Note: this morning, Stifel downgraded the stock to a Hold rating from a Buy rating.

Here Comes the Street…	Piper	Cowen	Barclays	Credit Suisse	Citigroup	Baird	Morgan Stanley
Old Target	$421	$425	$435	$400	$410	$445	$418
New Target	$500	$500	$500	$500	$512	$498	$525

The news sent the entire biotechnology sector much higher, extending momentum that's made it a strong place to be invested in this year.

BIIB

This is a sector to watch carefully as there were a ton of initial public offerings (IPOs) last year, and while most of the companies aren't earning money overwhelmingly, they have had drugs in at least phase one treatment. Still, considering valuations and past disappointments in the sector, this is the one that can best be labeled as a bubble.

Remember last July when Janet Yellen offered stock advice while trying to play down the notion the entire market was a bubble? Instead, she threw social media and biotechnology stocks under the bus stating:

“Valuation metrics in some sectors do appear substantially stretched — particularly those for smaller firms in the social media and biotechnology industries…"

Obviously this was her Greenspan 'irrational exuberance' moment, but then again she's looking to take the Fed back to Greenspan with more opaque language and less Wall Street influence. I like the latter part, but I just hope she sticks to other parts of the job and leaves asset bubbles to the market.

Biotechnology Sector Index (IBB)

This morning, there was news of adverse reactions with two Gilead (GILD) Hepatitis C drugs, when combined with patients taking heart treatment. Out of nine patients, one died and three needed pacemakers installed. These are the kind of setbacks that would have destroyed the stock in the past and while there will be pressure today; all of these missteps are moments away from treatments becoming better.

The Race is Joined

In 1754, Benjamin Franklin took a British symbol for its holdings in the new world to promote the idea of unity among the colonies. More recently, I've seen that same symbol used to suggest unity among conservatives.

 

The unite or die approach is how our upstart nation finally fought back the British crown as that chopped up snake became one giant rattlesnake, warning of determination and retribution for those that dare tread on our rights.

The 'Don't tread on me flag' or Gadsden flag flies high among those that see a nation losing its hard fought rights to the government it formed to protect them.

Now that Ted Cruz has formally announced his presidential candidacy campaign, the floodgates could open to a very crowded field of presidential aspirants. But many wonder if this group can survive without releasing so much venom that the eventual candidate is poisoned beyond repair.

Moreover, many experts say to win the general election, the GOP will have to abandon its hard edges and seek to find a message that doesn't rattle the crowd.

It's time for fiscal discipline by our government to unleash the greatness of the country and I hope Americans get and understand this isn't a message to fear, but to embrace.

Today's Session

Equity futures were under some pressure from the usual global economic angst including more shenanigans out of Greece, but moved to open flat.

Comments

Charles, You are right on the money about the GOP. However, having run for US Congress myself, I found the core GOP "leaders" to be extremely intolerant in their views on homosexuals and abortion. During one of our large meetings, a spokesman for the Log Cabin Republicans came to the meeting and asked to be included with the GOP. The GOP leadership refused - and literally ran the guy out of the auditorium. In the general election election in Washington state, Dino Rossi lost his bid for governor - by about 800 votes. The Log Cabin Republicans had a total enlistment of approximately 10,000 people. One only needs to see how self-defeating the GOP can be, when they don't agree with certain lifestyles and different concepts. If the GOP goes down this same path again - they will lose in 2016. Let's hope they have finally learned their lesson - but I am not holding my breath. Lawrence Klepinger Lawrence Klepinger on 3/23/2015 6:03:23 PM

These so-called "experts" that are advising against taking a strong conservative stance on issues as GOP presidential candidates state their position seem to be from the liberal side of the fence. That is like Jesus taking advice from the devil on how to accomplish His mission on earth. We all know how that turned out. The liberals would like nothing better than to have conservatives come over to their side of the fence as a "winning strategy". Then the American people will have a choice between liberal and more liberal. Bad thinking. Jerry Sullivan on 3/24/2015 4:37:43 PM

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