Concerns over tightening US monetary policy, faltering industrial markets and China’s economic slowdown led to Wall Street’s worst January performance since 2009. The Dow Jones Industrial Average, S&P 500 and NASDAQ slumped 5.5%, 5.1% and 7.9% in January, respectively. Nonetheless, results could have been worse, as major indexes jumped more than 2.3% in the final trading day of the month. Leading the rally was the Bank of Japan’s new stimulus announcement to cut interest rates. In addition, weaker-than-expected US economic growth spurred investors’ hopes for the Federal Reserve to curtail its hawkish stance. Fourth quarter 2015 GDP grew 0.7%, 20 basis points below expectations, due to weakening exports and business investments.

Laboratory Instruments and Products

The Index slumped 9.4% to 222.00 in January, erasing nearly all of last year’s gains. All but two companies contracted for the month, including eight companies that were down double digits.

Fluidigm, which reached a record low, experienced the sharpest decline among Index companies, falling 37.9% for the month. On January 6, the company projected preliminary fourth quarter 2015 sales of $30–$31 million, representing a decline of 9%, or 5% excluding currency. While sales grew sequentially and were slightly above the company’s previous outlook, investors remained skittish due to lower sales of production genomics consumables and growing competition in the single-cell sequencing space. Deutsche Bank initiated coverage of Fluidigm with a “Buy” rating on January 7. However, Cowen downgraded the company on January 20 from “Outperform” to “Market Perform.”

Similar to Fluidigm, both Illumina and NanoString Technologies declined for the month despite stronger-than-expected preliminary results. On January 10, NanoString slightly raised the midpoint of its full-year 2015 revenue outlook. Fourth quarter and full-year 2015 sales are estimated to grow 35%–42% and 29%–31% to $21.1–$22.1 million and $61.5–$62.5 million, respectively. Shares declined 5.2% for the month.

On January 11, Illumina preannounced fourth quarter 2015 revenue growth of 15% to $590 million (see IBO 1/15/16), which was $20 million above company expectations due to strong NextSeq and MiSeq sales. However, the company’s 2016 projected revenue growth of 16% represents the lower end of its previous long-term growth outlook of 15%–20%. Adjusted 2016 EPS are estimated to grow in the high single digits to $3.55–$3.65. Despite trading modestly higher after the report, shares fell 17.7% for the month.

Pacific Biosciences and QIAGEN also recorded strong double-digit declines as disappointing financial updates pressured shares. On January 10, QIAGEN lowered its currency-neutral fourth quarter 2015 revenue growth outlook from 5% to 3% and cut its adjusted EPS range from $0.35 to $0.33–$0.34 due to lower instrument placements and timing of companion diagnostic revenue. The company projected 2016 currency-neutral sales and adjusted EPS to grow 6% each. Shares fell 9.5% the following day and ended the month down 17.9%.

Pacific Biosciences slumped 9.4% on January 11 as it provided an update on demand for its recently launched Sequel sequencing system. For the fourth quarter of 2015, the company quantified orders for 49 units, of which 10 units were shipped. However, delivery of additional units are expected to slow in the first half of 2016 as a result of limited supply of SMRT cells kits. Shares contracted 18.6% for the month.

Among Index companies, only Thermo Fisher Scientific and Waters actually released quarterly results this month. While both companies reported strong top-line organic growth and topped analysts’ fourth quarter 2015 adjusted EPS expectations, shares fell 6.9% and 9.9% for the month, respectively. On January 26, Waters reported that fourth quarter 2015 adjusted EPS slipped 2% to $1.96 due to a strong comparison and currency headwinds. Full-year 2015 adjusted EPS grew 7% to $5.89, including currency headwinds of 11%. The company projected first quarter and full-year 2016 adjusted EPS to grow 1% and 6% at the midpoint to $1.17–$1.27 and $6.10–$6.35, respectively.

Thermo edged past estimates on January 28 as fourth quarter 2015 adjusted EPS grew 7% to $2.12. Despite currency headwinds of 11%, full-year 2015 adjusted EPS advanced 6% to $7.39. Thermo’s full-year 2016 adjusted EPS are expected to grow 7% at the midpoint to $7.80–$7.96.

The two fortunate companies to advance this month, Affymetrix and Enzo Biochem, climbed 39.0% and 5.3%, respectively. Affymetrix jumped 51.6% on January 11 following the report of a buyout agreement with Thermo for $14 a share (see IBO 1/15/16). Enzo Biochem benefited from a $9 million patent infringement settlement against Agilent Technologies announced on January 6. In addition, on January 26, Enzo announced the collection of $7 million previously held in escrow from a settlement with PerkinElmer (see IBO 6/30/14) and Molecular Probes, which will be accounted for the fiscal second quarter 2016.

There were several ratings changes and initial recommendations made this month. On January 7, Deutsche Bank initiated coverage of Agilent, Bruker, Illumina, PerkinElmer and Waters, each with a “Hold” rating, and started coverage of Thermo with a “Buy” recommendation. Cantor Fitzgerald upgraded Bruker on January 25 from “Hold” to “Buy.”

Conversely, Becton, Dickinson was downgraded by Morgan Stanley from “Overweight” to “Equal Weight” on January 4, and by Evercore ISI from “Buy” to “Hold” on January 6.

Diversified Laboratory

The Index declined 3.3% in January to 181.35 with all companies trading lower except Corning, which improved 1.8%. Corning topped analysts’ fourth quarter 2015 sales and adjusted EPS targets on January 26. Despite slow growth projected for the first quarter 2016, top- and bottom-line growth is expected to accelerate led by a recovery in LCD glass demand and share repurchases.

Similarly, Illinois Tool Works beat analysts’ fourth quarter 2015 consensus on January 27 as a result of operating initiatives and share repurchases. The company maintained its 2016 adjusted EPS guidance of $5.35–$5.55 for growth of 6%. First quarter 2016 EPS is expected to be $1.20–$1.30. On January 11, Barclays initiated coverage of the company with an “Equal Weight” rating. Shares declined 2.8% for the month.

Other companies in the Index reported mixed results. On January 26, Danaher met analysts’ expectations as fourth quarter 2015 adjusted EPS grew 13% to $1.27. However, sales fell short of consensus due to continued challenges in industrial markets. The company reaffirmed its adjusted 2016 EPS range of $4.80–$4.95, including EPS of $1.00–$1.04 for the first quarter. Shares fell 6.7% for the month.

Honeywell narrowly missed analysts’ fourth quarter 2015 revenue and adjusted EPS expectations on January 29. However, the company reaffirmed its full-year 2016 adjusted EPS guidance of $6.45–$6.70 for growth of 6%–10%. Shares slipped 0.4% for the month.

RBC Capital upgraded Xylem on January 6 from “Sector Perform” to “Outperform” and raised its price target 14% to $42 per share.

International

In spite of a strong global rally to end the month triggered by the Bank of Japan’s surprise announcement to adopt negative interest rates, most Asia Pacific equity indexes declined in January. Resisting the downward trend was Indonesia’s Jakarta Composite and Thailand’s SET, which improved 0.5% and 1.0%, respectively. Conversely, China’s Shanghai Composite and Hong Kong’s Hang Seng tumbled 22.6% and 10.2%, respectively. Japan’s Nikkei 225 dropped 8.0%. The Bank of Japan surprised the markets by lowering key interest rates following a slew of negative economic data.

Except for Hitachi High-Technologies, all other Pacific Rim companies in the IBO Stock Table traded lower for the month. Precision System Science lost the most value, falling 21.1%.

Hitachi, which climbed 2.6% for the month, reported stronger-than-projected earnings. On January 27, the company announced that fiscal third quarter EPS ending December 31, 2015, grew 43% to ¥75.34 ($0.62). As a result, the company raised its fiscal year 2016 EPS guidance by 3% to ¥242.86 ($2.11) for growth of 7%.

European equity markets all traded lower in January, led by Italy’s FTSE MIB and Germany’s DAX, which fell 12.9% and 8.8%, respectively. The UK’s FTSE 100 contracted 2.5% for the month.

Most UK-based companies in the IBO Stock Table traded in negative territory. Spectris lost the most ground, falling 12.2%. Conversely, Horizon Discovery and Scientific Digital Imaging (SDI) advanced for the month, climbing 7.1% and 8.7%, respectively.

On January 8, SDI reported a small profit for the six months ending October 31, 2015, compared to a modest loss in the previous year. Sales for the same period expanded 15%, led by demand for its Synoptics and Atik brands.

On January 18, Horizon announced preliminary full-year 2015 revenue growth of more than 69%, which was 2% ahead of consensus. This growth was driven by acquisitions, sustained demand from large pharmaceutical and diagnostic development companies, as well as increased sales to academic customers.

Abcam also announced positive preliminary results but declined 3.0% for the month. On January 25, the company projected fiscal 2016 half year sales ending December 31, 2015, to grow more than 17%, including acquisitions.

Oxford Instruments provided a trading update on January 22, which fell in line with its previous expectations. The company projected slightly lower revenue growth for both the NanoTechnology Tools and Service segments and modestly higher growth for Industrial Products. However, orders for Industrial Products continued to be challenged. On the same day, Peel Hunt upgraded the company from “Reduce” to “Hold.” Shares fell 4.9% for the month.

Prices for other European companies in the IBO Stock Table all declined in January. Merck KGaA lost the most value, falling 10.6%. Exiqon recorded the smallest decline, sliding 0.8% as it reported stronger-than-expected preliminary full-year 2015 sales growth on January 11. Full-year 2015 sales are projected to increase 22% to DKK 162 million ($24 million).