Week Ahead Preview
February 2, 2026
Market Commentary
Markets are entering February in wait-and-see mode. The big story last week was the gold and silver bubble popping — silver dropped 27% from highs, gold followed. This wasn’t macro news — it was a parabolic run that got too extended and gravity took over. I exited both at the highs. Good timing.
This week is all about Jobs Friday and the busiest week of earnings season. Mega-cap tech reports — GOOGL, AMZN, and others — and after MSFT stumbled on AI capex concerns last week, the bar is set. You can’t just wave the AI wand anymore. You need to show results.
February seasonality isn’t great historically — the S&P has averaged flat over the past 50 years with only 54% positive returns. Not a reason to panic, but a reminder to stay disciplined with entries.
Staying defensive with XLP as a hedge. ETF core continues to build.
M&A Watch & Near-Term Plays
CLYM (Climb Bio) — Data-rich 2026 incoming. Five readouts on deck across two programs:
Budoprutug (anti-CD19 mAb):
H1 2026: SC formulation Phase 1 data, China SLE first patient dosed
H2 2026: PrisMN Phase 2 data (primary membranous nephropathy), ITP Phase 1b/2a data, SLE Phase 1b data
CLYM116 (anti-APRIL mAb):
Mid-2026: Phase 1 data — IgA nephropathy, novel “sweeper” mechanism
Budoprutug already showed durable B-cell depletion and clinical remission in early pMN data. Orphan drug designation for pMN. China IND cleared for SLE in December. Cash runway into 2028 — no dilution through data. Ra Capital director bought 300K+ shares in December at $2-3.
Management: CEO Aoife Brennan was on the board of Ra Pharma (acquired by UCB) and led SPINRAZA approval at Biogen. She knows how to get drugs across the finish line and has been through a buyout. That’s the profile you want heading into H2 readouts.
M&A Score: 7.5/10 — Multiple catalysts, funded through data, orphan designation, insider buying, management with exit experience. H2 readouts determine if this moves to 8+.
DTIL (Precision BioSciences) — $95M market cap, sweet spot territory. Two clinical programs on their proprietary ARCUS genome editing platform:
PBGENE-HBV (Chronic Hepatitis B):
Phase 1/2a ongoing, data updates expected at conferences throughout 2026
Targets BOTH cccDNA and integrated HBV DNA — differentiated approach
HBV functional cure is the holy grail — 250M+ chronic patients worldwide
PBGENE-DMD (Duchenne Muscular Dystrophy):
IND clearance expected Q1 2026, initial patient data expected 2026
GSK/Ionis just hit Phase 3 on bepirovirsen (HBV functional cure) — validates the space and puts eyes on the category. DTIL’s gene editing approach could offer durability advantages.
Cash ~$137M as of December, funded through 2028 milestones. HC Wainwright has a $60 target — take that with a grain of salt, Wainwright overshoots — but conviction is notable.
Founders: Derek Jantz and Jeff Smith (both Duke postdocs) discovered ARCUS together in 2004. No prior exits, but they’ve landed major partnerships with Eli Lilly and Novartis — they know how to do deals. Clean record, no red flags.
M&A Score: 7/10 — Tiny cap, unmet need, differentiated platform, 2026 catalysts, funded through data, management knows how to partner. Needs proof-of-concept to move higher.
Week Ahead Catalysts
Earnings — Busiest Week of the Season:
Monday 2/3: Palantir (PLTR), Tyson Foods (TSN)
Tuesday 2/4: Alphabet (GOOGL), AMD, PayPal (PYPL), PepsiCo (PEP), Merck (MRK), Amgen (AMGN)
Wednesday 2/5: Disney (DIS), Uber (UBER), Qualcomm (QCOM), AbbVie (ABBV), Ford (F)
Thursday 2/6: Amazon (AMZN), Eli Lilly (LLY), Bristol-Myers (BMY), Philip Morris (PM), Honeywell (HON)
Friday 2/7: Take-Two (TTWO)
All eyes on GOOGL and AMZN to prove AI spend is translating. After MSFT’s stumble, execution matters more than narrative.
Economic Data — Jobs Week:
Monday 2/3: ISM Manufacturing PMI
Tuesday 2/4: JOLTS Job Openings
Wednesday 2/5: ADP Employment, ISM Services PMI
Friday 2/7: Nonfarm Payrolls, Unemployment Rate — main event
Friday’s jobs number sets the tone. Labor market looks stable on the surface, but the details will matter.
Central Banks:
Bank of England — rate decision Thursday
ECB — expected to hold
Bank of Canada Governor Macklem speaking
Education Corner: Understanding Stock Buybacks
Stock buybacks are one of the most misunderstood tools in corporate finance. Let’s break it down using MBIN (Merchants Bancorp) as a real example — a name I hold in the bank M&A hedge.
What is a buyback?
When a company buys its own shares on the open market and retires them. Fewer shares outstanding = each remaining share owns a bigger piece of the pie.
Why companies do it:
Return cash to shareholders — Alternative to dividends, often more tax-efficient
Signal confidence — Management saying “our stock is undervalued, we’re buying”
Boost EPS — Fewer shares = higher earnings per share, even if profits stay flat
Offset dilution — Cancels out shares issued for employee stock compensation
MBIN Example:
Merchants Bancorp announced a $150M buyback program in late 2024. At current prices (~$41/share), that’s roughly 3.6M shares they can retire — about 8% of shares outstanding. That’s material.
For a regional bank trading at reasonable valuations with strong fundamentals, a buyback this size signals management thinks the stock is cheap. They’re putting their money where their mouth is.
What to watch:
Execution — Did they actually buy, or just announce? Check quarterly filings for shares repurchased
Funding — Are they using excess cash or taking on debt to buy back? Debt-funded buybacks are riskier
Valuation — Buybacks at low P/E = smart capital allocation. Buybacks at nosebleed valuations = destroying value
The bottom line:
Buybacks aren’t automatically good or bad. Context matters. Here’s how to tell the difference:
Green flags (smart buybacks):
Stock is trading below intrinsic value — Management buying when P/E is compressed, stock is beaten down, or trading below book value
Funded with excess cash — Company has strong free cash flow and isn’t stretching to buy
Consistent execution — They announced AND actually bought shares (check 10-Q filings)
Insider buying alongside — If executives are buying personally while the company buys back, that’s alignment
Not sacrificing growth — Buyback isn’t coming at the expense of R&D, capex, or paying down debt
Red flags (bad buybacks):
Buying at all-time highs — Overpaying destroys shareholder value. You want them buying low, not chasing
Debt-funded — Taking on leverage to buy back stock is financial engineering, not value creation. Works until it doesn’t
Offsetting dilution only — If they’re issuing 5M shares to employees and buying back 5M, you’re just treading water
Management selling while company buys — Executives dumping personal shares while the company buys back is a massive red flag. They’re using shareholder cash to provide exit liquidity for insiders
EPS manipulation — Some companies buy back shares specifically to hit EPS targets that trigger executive bonuses. If EPS is growing but revenue and profits are flat, ask why
The MBIN case:
Regional bank, reasonable valuation, excess capital, $150M program representing 8% of float. No debt-funded shenanigans. Management isn’t dumping shares. This is textbook “we think our stock is cheap and we have the cash to act on it.” That’s the kind of buyback you want to see.
Your homework:
Next time you see a buyback announcement, don’t just read the headline. Ask:
What’s the valuation? Are they buying low or buying high?
Where’s the money coming from? Cash flow or debt?
What are insiders doing? Buying, holding, or selling?
Is this creating value or just masking stagnation?
The answer separates capital allocators from financial engineers.
Disclaimer: This newsletter is for informational and educational purposes only. Nothing here constitutes financial advice, investment advice, or a recommendation to buy or sell any security. I hold positions in many of the stocks mentioned, including CLYM, DTIL, MBIN, XLP, and others discussed. Always do your own due diligence before making any investment decisions. Past performance does not guarantee future results. Biotech and small-cap investing involves significant risk, including the potential loss of your entire investment.
Really helpful explainer!!