Reopening Macroeconomic Data, Further Stimulus & COVID-19 Treatment Hopes Drive Markets Further North But…

After receiving news yesterday that the Fed was increasing its stimulus measures to support liquidity, the market recovered strongly into the close. Today the markets got additional propelling news in the form of positive reopening fueled macroeconomic data reports which surfaced and drove the markets further north. The main driver was a market surprising report regarding retail sales for May in the U.S. which jumped a stout 17.7% month/month and when you exclude autos sales, retail sales moved up 12.4% month/month. The total industrial production report confirmed a move higher by 1.4% month/month in May while the capacity utilization rate bumped up and came in at 64.8%. The NAHB Housing Market Index report for June confirmed a move higher to 58 up from 37 in May. The Business Inventories report confirmed a move lower by 1.3% in April. While the fear of a “second wave” of COVID-19 persists it was an overall very bullish day driven by these reports. 

In addition, Bloomberg reported that President Trump may bring forth a $1T infrastructure proposal harkening back to his promise the night that he was elected & lastly an additional report surfaced from the BBC that a steroidal treatment had reduced deaths in severely ill patients afflicted with COVID-19 as a team at the University of Oxford has reported having found that a low-cost steroid called dexamethasone has proven to reduce deaths by a third among patients on ventilators.

However, there was also a bit of a dampening effect caused by other reports that Texas is experiencing a new high of COVID-19 hospitalizations while our Chinese friends in Beijing have increased their COVID emergency response level while simultaneously closing its schools.

As a result, we saw the S&P 500 close up 1.9% at 3,124.74 all 11 S&P 500 sectors ended the session in the green with energy up 2.8% & health care up 2.4% leading the way. The Dow added 2.04%.  The Russell 2000 jumped 2.3% for the second day this week. The Nasdaq climbed 1.75% closing at 9,895.87 and is eyeing the 10k level once again. 

The FAANG stocks ended in positive territory across the board as follows: Facebook (FB) closed at $235,65/share up 1.35%, Amazon (AMZN) closed at $2,615.27 up 1.66%,  Apple (AAPL) closed at $352.08/share up by 2.65%, Netflix (NFLX) gained 2.5% closing at $436.13/share, & Alphabet (GOOG) closed at $1,442.72/share up by 1.61%. 

Gold gold closed at $1,683/oz (-28) & silver prices closed at $17.60/oz (+.05). North American silver and gold producer Hecla Mining Company (HL) closed at $3.06/share down 2.24% while First Majestic Silver (AG) lost 4.16% closing at $8.76/share.

Oil prices jumped 3.2% as it closed at $38.56/bbl and now flirting with the $40/bbl mark again. Energy leaders Chevron (CVX) closed at $94.03/share up 3.07%, Exxon (XOM) closed at $48.20/share up 2.25% & highly leveraged Occidental Petroleum Corporation (OXY) closed at $20.29/share up 6.51% as this little roller coaster keeps giving us a great ride. 

The 2-yr US treasury yield ros3e 2 basis points to close at .21% & the 10-yr yield rose five basis points to close at .76%. The U.S. Dollar Index strengthened by .4% to end at 97.05. 

Here’s a couple of other equities that moved significantly higher today:

• Shares of Neubase Therapeutics (NBSE) continued to find rarified air today as it closed at $11/share up another 6.59% today after touching $11.12/share a new intraday all-time high. RBC Capital markets initiated coverage of NBSE today with an Outperform, Speculative Risk rating & a $16 price target. As we have been stating, we are following Neubase Therapeutics (NBSE) for a number of reasons including its development of 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,  but it also because it may be added to a Russell index this month. Here’s the preliminary list of additions. where you will find NBSE listed. Here are the following June dates for Russell indices inclusion for 2020:

  • June 12 & 19 – US index add & delete lists (reflecting any updates) posted to the FTSE Russell website after 6 PM US eastern time.
  • June 15 – “lock down” period begins – US index adds & delete lists are considered final
  • June 26 – Russell Reconstitution is final after the close of the US equity markets.
  • June 29 – equity markets open with the newly reconstituted Russell US Indexes.]

• Shares of INVO Bioscience (INVO, INVOD) closed at $3.76/share up another 7.74% today. INVO Biosciences (INVO) has made a number of moves to build out its organization while focusing its efforts to increase access to its INVOcell procedure globally. On May 26, the company reversed its outstanding share count 1-20 and now has ~7.8M shares with 15% in the hands of insiders.  INVO Bioscience’s INVOcell® is a patented medical device used in infertility treatment and is considered an Assisted Reproductive Technology (ART). ART includes all fertility treatments in which both eggs and embryos are handled outside of the body. It will be exciting to see how this company moves forward and how the stock performs with less 8 million shares issued outstanding post the reverse and the company now showing up on low float lists. Steve Shum, Chief Executive Officer of INVO Bioscience, stated, “As we continue to improve our commercialization activities and expand the awareness of our FDA-cleared INVOcell device both domestically and abroad, we also set the objective to improve the capitalization structure of the company in order to enhance our public company visibility and attract a larger audience of investors. Today’s announcement is an important step in that process.”  Recently they added cash on the balance sheet raising convertible debt (conversion price is $3.60/share) to foster growth initiatives in the back half of this year. Currently, it is estimated that only 1% to 2% of the estimated 150 million infertile couples worldwide are being treated, but help is on the way…Recently, The Morning Blend aired an interview on WTMJ-4 Milwaukee where Dr. Ellen Hayes, a Reproductive Endocrinologist and Infertility Specialist from Vios Fertility Institute, discussed information regarding their new research in health, pregnancy, and COVID19. Dr. Hayes also shares their research and a new offering of INVO Bioscience’s  (INVO) FDA cleared infertility treatment called INVOcell The INVOcell technology, which continues to gain worldwide recognition and adoption, provides an in-vivo incubation solution that can help increase access and capacity to the large underserved global fertility market. The INVO Procedure is a revolutionary in vivo method of vaginal incubation that offers patients a more natural and intimate experience and more cost-effective. For the rest of 2020 Vios Fertility Institute is giving a special offer for InVoCell. The offer includes retrieval, monitoring, fresh embryo transfer for $6500, it normally costs $7200, which is still significantly less expensive than traditional lab-intensive IVF. Please watch the concise interview by clicking this link now!

• Shares of Eli Lilly (LLY) jumped 15.68% closing at $163.71/share today after it was reported that Lilly’s Phase 3 study in high-risk early-stage breast cancer where researchers tested Lilly’s Verzenio in combination with standard endocrine therapy in comparison to endocrine therapy alone showed that it “significantly” reduced the likelihood of cancer relapse for this specific patient group. Around 30% of patients with this form of breast cancer are at risk of recurrence.

TOMORROW

Tomorrow’s significant economic data report schedule will provide the following:

• The Housing Starts and Building Permits for May
• The weekly MBA Mortgage Applications Index

WATCH LIST

• Shares of Fate Therapeutics (FATE) closed at $31.58/share still below its recent 52-week high of $37.24 but up from its 52-week low of $12.59. On June 11th NBSE announced that it had closed an underwritten public offering of 7,108,796 shares of its common stock, which included 927,324 shares that were issued pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $28.31 per share. Aggregate gross proceeds from this offering, including the exercise of the option, were approximately $201.3 million, prior to deducting underwriting discounts and commissions and estimated offering expenses. Fate Therapeutics, Inc. (FATE), a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders. Are you still invested in Fate after meeting them via this newsletter and attending meetings over the last couple of years when it was in the $3-4 range?… Recently, Fate announced that the U.S. Food and Drug Administration (FDA) has cleared the Company’s Investigational New Drug (IND) application for FT538, the first CRISPR-edited, iPSC-derived cell therapy. FT538 is an off-the-shelf natural killer (NK) cell cancer immunotherapy that is derived from a clonal master induced pluripotent stem cell (iPSC) line engineered with three functional components to enhance innate immunity: a novel high-affinity, non-cleavable CD16 (hnCD16) Fc receptor; an IL-15/IL-15 receptor fusion (IL-15RF); and the elimination of CD38 expression. The Company plans to initiate a clinical investigation of three once-weekly doses of FT538 as monotherapy in acute myeloid leukemia (AML) and in combination with daratumumab, a CD38-directed monoclonal antibody therapy, for the treatment of multiple myeloma.

• Shares of Atossa Therapeutics (ATOS) closed at $3/share today after reaching a new high of $3.48 recently as interest continues to swell around their breast cancer treatment programs and their COVID-19 drug candidates. Atossa Therapeutics, Inc. (Nasdaq: ATOS), a clinical-stage biopharmaceutical company seeking to discover and develop innovative medicines in areas of significant unmet medical need with a current focus on breast cancer and COVID-19, announced recently that it has begun the development of a second COVID-19 program using its proprietary drug candidate AT-301, to be administered by nasal spray as is teaming with nasal spray specialist firm Summit Biosciences. AT-301 is Atossa’s proprietary formula intended for nasal administration in patients immediately following a diagnosis of COVID-19 but who have not yet exhibited symptoms severe enough to require hospitalization. Atossa confirmed that it is intended for at-home use to proactively reduce symptoms of COVID-19 and to slow the infection rate so that a person’s immune system can more effectively fight SARS-CoV-2 (coronavirus). Atossa also intends to conduct testing to determine whether AT-301 can be used as a prophylaxis to prevent or mitigate SARS-CoV-2, with the goal that it could become a “bridge to the vaccine” and be useful in the next phase of the coronavirus pandemic. CEO of Atossa, Dr. Steven Quay, MD, Ph.D., author, and physician-scientist, announced the availability of his 158-page book, “Your COVID-19 Survival Manual: A Physician’s Guide to Keep You and Your Family Healthy During the Pandemic and Beyond,” in paperback and eBook format on his website, www.DrQuay.com, beginning Monday, June 8, 2020. Proceeds from the book will go to military veterans performing COVID-19 relief work in their communities. 

Economic Reports

• On Monday, we received the Empire State Manufacturing Survey for June which moved up to -0.2 after hitting record lows in April and May.
• On Tuesday, we received the retail sales report for May in the U.S. which jumped a stout 17.7% month/month and when you exclude autos sales, retail sales moved up 12.4% month/month. The total industrial production report confirmed a move higher by 1.4% month/month in May while the capacity utilization rate bumped up and came in at 64.8%. The NAHB Housing Market Index report for June confirmed a move higher to 58 up from 37 in May. The Business Inventories report confirmed a move lower by 1.3% in April.

Investing & Inspiration

“An investment in knowledge pays the best interest.” – Benjamin Franklin.

“I believe the returns on investment in the poor are just as exciting as successes achieved in the business arena, and they are even more meaningful!” -Bill Gates

“Every portfolio benefits from bonds; they provide a cushion when the stock market hits a rough patch. But avoiding stocks completely could mean your investment won’t grow any faster than the rate of inflation.” – Suze Orman

“The tax on capital gains directly affects investment decisions, the mobility, and flow of risk capital… the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth in the economy.” – John F. Kennedy

“If all the economists were laid end to end, they’d never reach a conclusion.
-George Bernard Shaw

“The riskiest thing we can do is just maintain the status quo.
I get up at 4:30 in the morning, seven days a week, no matter where I am in the world. I think it is important for people who are given leadership roles to assume that role immediately. What I’ve really learned over time is that optimism is a very, very important part of leadership.” Bob Iger, Ceo of Disney

“There are old traders and there are bold traders, but there are very few old, bold traders.”-Ed Seykota

“Let this scenario play out on its own, in its own fashion. As you watch it unfold, you will soon be grateful that you choose the peaceful path. Remember — those who live by the sword, die by the sword.”

“As long as you enjoy investing, you’ll be willing to do the homework and stay in the game.” -Jim Cramer

“I rarely think the market is right. I believe non-dividend stocks aren’t much more than baseball cards. They are worth what you can convince someone to pay for it.” -Mark Cuban

“Michael Marcus taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.” -Bruce Kovner

“The policy of being too cautious is the greatest risk of all.” -Jawaharlal Nehru

“The only true test of whether a stock is “cheap” or “high” is not its current price in relation to some former price, no matter how accustomed we may have become to that former price, but whether the company’s fundamentals are significantly more or less favorable than the current financial-community appraisal of that stock.” -Philip Fisher

“I learned to avoid trying to catch up or double up to recoup losses. I also learned that a certain amount of loss will affect your judgment, so you have to put some time between that loss and the next trade.” -Richard Dennis

“The four most dangerous words in investing are: ‘this time it’s different.” -Sir John Templeton

“Money doesn’t make you happy. I now have $50 million but I was just as happy when I had $48 million.” -Arnold Schwarzenegger