“27K Magic” Vista Partners Daily Market Recap 7/11/19

By John Heerdink LinkedIn

The markets or at least the large caps today were further buoyed by the warm-and-fuzzy feeling that Fed Chair Jerome Powell has given us this week that a quarter-point interest rate cut would be in the cards by July 31st. Both the Dow and the S&P 500 moved past and/or into record territory while the Nasdaq and the Russell 2000 moved lower.

The Dow gained a whopping 227.88 points today or closing up .85% and finally breaking through the 27K level that it has been a stone’s throw away from recently. The S&P 500 managed to move up past 3003.33 during getting extremely close to its previous record high of 3,022.98 that it established yesterday and moved up 6.84 points while closing at 2,999.91 up .23%. The tech-heavy Nasdaq closed at 8,196.04 down .08% losing 6.49 points. The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index gave back 7.13 points closing at 1,557.92 down .46%. 

Volatility bets moved lower again today with the positive move of the markets but the trading range was very tight. The CBOE Volatility Index (VIX) closed lower at $12.93 down by .77% or $.10/share. It traded between $12.39 – $13,33. The 2x leveraged ETF TVIX also closed lower at $15.00 down 2.79% or $.43/share and traded between $14.79 and $15.45 today.

The US Dollar Index dropped today ending the day at 97.06 down .05%.

The 2-yr treasury yield ended at 1.85% up .03%  & the 10-year Treasury note closed up .06% at 2.12%.

 Oil prices dropped .4% to close at $60.26/bbl.  Dow 30 energy participants Chevron (CVX) moved lower by .01% closing at $125.43 & Exxon (XOM) closed higher by .08% closing at $77.57.

Gold closed at $1405.50/oz.

Big tech stocks results were mixed today.  Apple (AAPL) was down .73% closing at $201.75/share & Amazon (AMZN) lost .81% closing at 2,001.07. Alphabet (GOOG) gained 3.73% closing at $1,144.21 & Facebook (FB) finished lower at $201.23 off .74%. Shares of Microsoft (MSFT) gained .40% closing at $138.40. Chipmaker Intel (INTC) ended up .81% closing at $48.60/share & Micron (MU) added a solid 1.35% closing at $43.48/share after its recent earnings beat. Netflix (NFLX) lost .39% ending at $379.50/share.

Money management

Institutional alternative asset manager Och-Ziff Capital Management Group (OZM) closed at $24.24 down 1.86% or $.46/share closing off this week’s newly minted 52-wk high of $25.49. The 52-wk range is $8.60 – $25.49. OZM sports a 3.95% cash dividend.

Los Angeles-based Colony Capital (CLNY) a leading global investment management firm with assets under management of $43 billion closed at $5.05 down 1.56% after hitting an intraday high of $5.14. CLNY pays an 8.58% cash dividend.

Nike (NKE) closed at $88.29 up .97%. Nike recently missed analyst earnings estimates but maintained full-year guidance.

Healthcare

The White House has withdrawn its proposal to eliminate rebates from government drug plans. The S&P 500 healthcare sector closed at 1082.31 up .02%. A few insurers and pharmacies moved higher post the decision. UnitedHealth (UNH) closed higher up 5.5% closing at $261.16, Walgreens Boots Alliance (WBA) closed at $55.62 up .09% & CVS Health (CVS) closed at $57.97 up 4.7%. Cigna (CI) skyrocketed 9.2% closing at $175.34.

Community Health Systems, Inc. (CYH) one of the largest publicly traded hospital companies in the US closed at $2.41 after hitting an intraday high of $2.63/share. CYH also traded at low of $2.37 today on 2.67 shares of trading. On June 27th CYH announced that its subsidiaries signed a definitive agreement to sell 92-bed Bluefield Regional Medical Center in Bluefield, West Virginia, and its associated ancillary healthcare operations to subsidiaries of Princeton Community Hospital. The hospital included in this transaction is among the additional planned divestitures discussed on the Company’s Q1 2019 earnings call. Also, note there has been more insider buying occurred recently as Michael Dinkins bought shares at $3.168/share on 5/28/19 according to the latest Form 4 filed at SEC.gov. Michael Dinkins has served on our Board of Directors since December 2017. Mr. Dinkins has served as president and chief executive officer of Dinkins Financial, a consulting firm that helps small businesses gain access to capital, since October 2017. See our story more details: INSIDER BUYING ALERT: Community Health Systems, Inc. (CYH) Director Michael Dinkins.

Change Healthcare Inc., a leading independent healthcare technology platform, announced Wednesday after the close that they had priced their initial public offering of 42,857,142 shares of its common stock at a price to the public of $13.00 per share and its concurrent offering of 5,000,000 of its 6.00% tangible equity units (“Units”), with a stated amount of $50. The offerings are expected to close on July 1, 2019, subject to customary closing conditions. The completion of the Units offering is conditioned upon the completion of the common stock offering, but the completion of the common stock offering is not conditioned upon the completion of the Units offering. Change has granted the underwriters in the common stock offering a 30-day option to purchase up to an additional 6,428,571 shares of common stock. Change has granted the underwriters in the Units offering an option to purchase, within a 13-day period beginning on, and including, the date of the initial issuance of the Units, up to an additional 750,000 Units. The shares and the Units began trading on the Nasdaq Global Select Market today, under the symbols “CHNG” and “CHNGU,” respectively. CHNG shares rose to a high of $15.19 and closed at $15/share up 15.38% in its first day of trading on Thursday but closed today at $14.87 up 1.50%.

INVO Bioscience, Inc. (IVOB) ended the day at $.36/share as daily trading volume continues to rise in concert with their announcing progress after their exclusive U.S. partnership with Ferring Pharmaceuticals, a leader in the reproductive health industry was announced in Q1-2019. Ferring has committed to providing the necessary sales and marketing resources to more fully develop the market in the United States. There are countless couples not able to receive reproductive treatments today, and Ferring can be instrumental in addressing the unmet needs of this cohort. Ferring has the industry experience, relationships and the marketing capabilities to successfully embed the INVOcell in clinics throughout the country.  IVOB is a medical device company, headquartered in Sarasota, FL focused on creating simplified, lower-cost treatment options for patients diagnosed with infertility. The company’s lead product, the INVOcell, is a novel medical device used in infertility treatment that is FDA cleared and that enables egg fertilization and early embryo development in the woman’s vaginal cavity. IVOB also announced last week news of their recent appointment of Pressly Ahammed as the new Director of International Business Development and he will be responsible for the Company’s international distribution channels in Europe, Middle East, Africa & parts of Asia. Ahammed joined IVOB from Cooper Surgical where he held a similar position. See complete story.

Biotech

The Ishares Nasdaq Biotechnology ETF (IBB) gave back 1.43% closing at $106.98 after the White House rebate decision. This sector has been on a more than healthy run over the last 30 days. The 52-wk range is $89.01 – 122.97.

Pfizer (PFE) closed lower at $42.98 down 2.45% after the recent announcement regarding their acquisition of Array BioPharma (ARRY) for ~$11.4 billion or $48/share in cash.  See complete story. The pharmaceutical giant and Dow component Merck & Co, Inc. (MRK) that recently announced the acquisition of Tilos Therapeutics for a consideration of up to $773 million closed at $81.00 down sharply by 4.50%.

Atossa Genetics (ATOS),  a Seattle-based biotech firm developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions soared to an intraday high of $2.60/share and closed at  $2.27 up 1.34% on 1.56 million shares of trading. The average daily trading volume is 812,303 shares per day.  The move came on the back of news that Atossa is developing a new proprietary modified-release oral tablet form of its Endoxifen, which is the form of the drug that the company intends for future clinical studies and commercialization. This is the next generation of oral Endoxifen following the successful clinical studies of the capsule form of the company’s oral Endoxifen. A patent application covering the new table has also been filed with the U.S. Patent and Trademark Office. As part of the development of this new oral tablet, Atossa has commenced a Phase 1 study in Australia to ascertain the pharmacokinetics of the tablet. The study is randomized, double-blinded and placebo-controlled with both single and multiple-doses in 2 groups with a total of 24 healthy female volunteers who will be dosed for 14 days. Atossa’s oral Endoxifen capsule, which has been used in previous clinical studies, will serve as the comparator. The first group of the study has now been enrolled and dosed. Steven C. Quay, Ph.D., M.D., CEO, and president of Atossa, commented: “We are excited to take this next step in our oral Endoxifen product development. Based on the abundance of information from our previous clinical studies, we strongly believe in the potential efficacy of oral dosing and intend for this modified-release tablet to be the commercial form of our oral Endoxifen. The goal of the modified-release aspect of the drug is to create more even uptake of the drug which we believe may reduce side effects and improve efficacy. This new study builds on the success of our Phase 1 studies of the oral capsule and topical forms of our Endoxifen, our recent successful Phase 2 study of topical Endoxifen, which demonstrated significant efficacy in reducing breast density, and our single-patient compassionate use study of oral Endoxifen. Following the completion of this Phase 1 trial, we will continue to use this proprietary modified-release formulation for future clinical studies — including a Phase 2 trial that we have already indicated is in development — and ultimately regulatory approval. We look forward to completing the study in the next quarter.”

Biohaven Pharmaceutical Holding Company Ltd., (BHVN), a clinical-stage biopharmaceutical company with a portfolio of innovative, late-stage product candidates targeting migraine and neurological diseases, including rare disorders, announced recently the pricing of an underwritten public offering of 6,976,745 of its common shares at a price of $43.00/share. The gross proceeds of the offering are expected to be $300 million.  Shares of BHVN closed at $43.09 today down 1.42% after hitting an intraday high of $44.92/share on 1.18 million shares of trading. The 52-wk range $29.17 to $67.86. Today, Biohaven announced that positive results from a Phase 3 pivotal clinical trial of rimegepant, Biohaven’s small molecule calcitonin gene-related peptide (CGRP) receptor antagonist, for the acute treatment of migraine, are published in the July 12, 2019 issue of the New England Journal of Medicine (NEJM). These data were reported to show that, compared to placebo, patients treated with a single dose of oral rimegepant 75mg experienced superior, rapid pain freedom and freedom from the most bothersome migraine-associated symptom. Approximately 40 million people in the U.S. suffer from migraine and there has been minimal improvement in the standard of care acute treatment of migraine since the 1990s. Rimegepant is an oral calcitonin gene-related peptide (CGRP) antagonist being developed for the acute and preventive treatment of migraines. See Complete Story. BHVN Shares are at $45/share in the aftermarket up 2.95%.

San Diego-based biotech Fate Therapeutics (NASDAQ: FATE), dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders,  closed down at $20.45/share off .24% on 456,905 shares of trading after establishing a new all-time intraday high of $22.35 last week. The 52-week range is $8.64 – $22.35. Guggenheim Securities initiated coverage on FATE last week with a “Buy Rating” and a $25/share price target. Scott Wolcho, President and CEO of Fate Therapeutics presented at the Jefferies 2019 Healthcare Conference in New York recently. Roth Capital initiated coverage on FATE with a Neutral rating and a $20 price target last Friday, June 7th. Mizuho initiated coverage with a price target of $27/share about a week ago.

Boston-based Pieris Pharmaceuticals (PIRS) closed at $4.42 down 1.78% on 202,385 shares of trading. The stock traded between $4.36 & $4.50 today and the 52-wk range is $2.39 – $6.55.

Bedford, Massachusetts-based Stoke Therapeutics is a biotechnology company pioneering a new way to treat the underlying cause of severe genetic diseases by precisely upregulating protein expression. Recently Stoke Therapeutics announced the pricing of its initial public offering (IPO) of 7,891,110 shares of its common stock at a price to the public of $18.00 per share. The shares are now trading on The Nasdaq Global Select Market as of June 19, 20,19 under the symbol “STOK.” Stoke’s stock traded as high as $31.76 recently a new all-time high prior to closing trading at $27.85/share up .4.27% today. See complete story.  

Xeris Pharmacueticals, Inc. (XERS) closed up 1.11 at $12.71. Xeris is a specialty pharmaceutical company leveraging its novel formulation technology platforms to develop and commercialize ready-to-use injectable and infusible drug formulations.

Elsewhere on the recent IPO front, Zoom Video Communications (ZM) lost 1.42% closing at $91.40 & Uber Technologies (UBER), the ride-sharing company closed higher at $43.99/share up by .66% but still below its recent IPO price of $45. Plant-based burger maker Beyond Meat (BYND) closed up sharply again today at $174.20 adding 6.54%. Their meat is made of four main ingredients: water, pea protein isolate, canola oil & refined coconut oil and is meant to taste like “meat.  Slack Technologies (WORK) which jumped into the public markets with their IPO last week flying up 48.5% from their offering price of $26/share & closed today at $35.00 down .54%. Slack is a provider of a cloud-based workplace messaging app and went public via a direct listing avoiding paying fees to the relevant banks.

Vista Partners LLC (”Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: www.vistapglobal.com with daily stories, weekly market updates, monthly macroeconomic newsletters, podcasts, & Vista’s proprietary equity and market research to help you stay informed and stay competitive. Vista’s mission is to invest partner capital while arming investors with a comprehensive global financial perspective across all market sectors. Vista also seeks to provide select issuers with actionable advice regarding fundamental development, corporate governance, and capital market directives.

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