“Phase One Positively Positioned For Progress, CIEN, MDLA, WYNN Jump!” Vista Partners Daily Market Recap For Dec. 12, 2019

The broad markets on Thursday charged forward on the positive outlook shared originally by Bloomberg and reshared across the globe that a  “Phase One” deal with regard to the US-China trade wars was close and that the Dec. 15 tariffs due to go in place may be pushed, averted, or removed entirely. As a result, the S&P 500 & Nasdaq Composite both ended at new record highs. The S&P 500 ended the day up +.86% as 9 of eleven sectors moved higher. The S&P 500 energy (+2.0%) & financials (+2.0%) sectors equally led the advance while real estate (-1.5%) and utilities (-.5%) sectors ended in negative territory as treasury yields shot up. The Nasdaq Composite gained +.73% as Apple (AAPL)  notched up +.25% ending at $271.46/share and hitting a new record high. The Dow Jones Industrial Average ended up +.79% & the Russell 2000 moved higher +.79% at the close of trading. The “fear gauge” Vix (TVIX) ended significantly lower again at $59.99/share at the close down -10.89% as sentiment rose.

Economic Reports

No material economic data surfaced on Monday.

On Tuesday, we received the Nonfarm business sector labor productivity report which went down by -.2% in Q3. Unit labor costs rose by +2.5%. The NFIB Small Business Optimism Index for November confirmed a move higher to 104.7 from the October mark of 102.4.

On Wednesday, the Consumer Price Index (CPI) report shoed a positive move up +.3% m/m in November whie the core CPI, sans food and energy, moved up +.2%. The Treasury Budget for November came in as a deficit of $208.8B while the budget deficit over the last 12 months is $1.022T up from $1.018T in October. The fiscal y-t-d deficit is $343.3B up from the $305.4B a year ago. The weekly MBA Mortgage Applications Index jumped +3.8%.

On Thursday, we received the Producer Price Index for final demand (PPI) report which was flat m/m in November, however core PPI that excludes food & energy went down by -.2%. Y/Y increases are now at +1.1% & +1.3%. Initial claims for the week ending December 7 surfaced showing an increase of 49k to 252k while continuing claims for the week ending November 30 went down by 31k to 1.667M.

Investing & Inspiration

There is no single market secret to discover, no single correct way to trade the markets. Those seeking the one true answer to the markets haven’t even gotten as far as asking the right question, let alone getting the right answer. -Jack Schwager

After the Market Closed

Shares of Sarepta Therapeutics, Inc. (SRPT), the leader in precision genetic medicine for rare diseases, are up trading up +28.40% in the aftermarkets at $129/share after announcing that the U.S. Food and Drug Administration (FDA) has approved VYONDYS 53™ (golodirsen). VYONDYS 53 is an antisense oligonucleotide from Sarepta’s phosphorodiamidate morpholino oligomer (PMO) platform, indicated for the treatment of Duchenne muscular dystrophy (DMD) in patients with a confirmed mutation amenable to exon 53 skipping. This indication is based on a statistically significant increase in dystrophin production in skeletal muscle observed in patients treated with VYONDYS 53, which is reasonably likely to predict clinical benefit for those patients who are exon 53 amenable. Consistent with the accelerated approval pathway, the continued approval of VYONDYS 53 may be contingent on confirmation of a clinical benefit in this post-marketing confirmatory trial.

Keep an eye on other antisense players in the space as they work towards their trial outcomes after this giant step by the FDA. For example, NeuBase Therapeutics (NBSE) has developed a modular antisense peptide nucleic acid (PNA) platform with the capability to address rare genetic disease caused by mutant proteins with a single, cohesive approach. NeuBase has improved gene silencing therapies to include the advantages of synthetic approaches with the precision of antisense technologies. Neubase is due to release their NT0100 for HD non-human primate (NHP) data in the 1st half of 2020. Three investment banks now cover NBSE including Oppenheimer with a $14 target price. Shares of NBSE closed at $7.15/share today up +.56% near its all-time high of $7.39. The Oppenheimer analysts stated in their report “We believe that NBSE has solved for many technical limitations to first- generation antisense oligonucleotides (ASOs), allowing for rapid drug design, systemic delivery, blood-brain barrier penetration, increased cell permeability, the ability to access genomic loci and secondary RNA structures, and highly selective therapies. Since the preclinical and clinical development of ASOs in diseases like HD and ALS is well-established and their risks/benefits are also well-known, we believe that NBSE’s ability to speed lead molecules NT0100 (Huntington’s disease) and NT0200 (myotonic dystrophy) through preclinical drug development over the next 12-24 months will be value-creating events for investors. We are bullish on the approach.”