Wall Street’s Pivotal Week (July 29) – $EPRX $LTRN $MCD $MODD $TSLA $TWOU Rise!

By John F. Heerdink, Jr.

Wall Street is bracing for a pivotal week ahead, with major tech earnings, a Federal Reserve meeting, and key economic data poised to shape market sentiment and potentially drive significant movements across various sectors.

Stock Indices Performance

The stock market played a game of financial limbo on Monday, with major indices barely moving as the bulls and bears left it basically in the same spot. The S&P 500 and Nasdaq Composite squeezed out microscopic gains of 0.1% each, while the Dow Jones Industrial Average dipped its toes 0.1% into negative territory. The Russell 2000, apparently feeling left out of the tech party, took a more dramatic tumble of 1.1%. This lackluster performance comes as investors hold their breath for a week packed with heavyweight tech earnings, a Federal Reserve meeting, and crucial economic data. Year-to-date, the Nasdaq Composite leads the pack with a 15.7% gain, followed closely by the S&P 500 at 14.5%, while the Dow Jones Industrial Average trails with a 7.6% increase. The iShares Micro-Cap ETF closed at $127.23, -1.56%.

Fed Reserve In View…

The Federal Reserve is expected to maintain its current interest rate target range of 5.25%-5.5% at its upcoming meeting, continuing its pause in rate hikes since July 2023. While the Fed is likely to hold rates steady, markets are anticipating potential rate cuts later in the year, with futures markets pricing in a 64% likelihood of three rate cuts in September, November, and December. However, the Fed’s stance remains cautious, with officials emphasizing the need for more evidence that inflation is sustainably moving towards the 2% target before considering rate reductions. The Fed’s decision and subsequent commentary from Chair Jerome Powell will be closely watched for insights into future monetary policy direction, particularly given the recent cooling of inflation and signs of a softening labor market. In the meantime, the yield curve steadied today with the 10-yr note yield falling 2bps to 4.18% and the 2-yr note yield closing even at 4.39%.

Upcoming Earnings Reports

This week promises a flurry of earnings reports, with about 35% of S&P 500 components set to reveal their financial results. Tech giants are taking center stage, as four of the five heaviest-weighted stocks in the index prepare to unveil their quarterly performances. Microsoft is scheduled to report after Tuesday’s close, followed by Meta Platforms on Wednesday, while Amazon and Apple will cap off the week with their announcements after Thursday’s closing bell. Investors are eagerly anticipating these reports, as they could significantly influence market direction and potentially spark a shift from high-flying tech stocks to smaller, cyclical equities.

Sector and Company Highlights

The consumer discretionary sector emerged as a standout performer, surging 1.4% on the back of gains in Amazon and Tesla, with the latter jumping an impressive 5.6%. Communication services also had a strong showing, climbing 0.9%. In contrast, the heavily-weighted information technology and financials sectors lagged behind, dipping 0.3% and 0.2% respectively. McDonald’s stock defied expectations, rising 3.7% despite disappointing quarterly results, as investors pinned their hopes on potential turnaround efforts driven by value-based menu pricing. Meanwhile, the U.S. Treasury announced plans to borrow $740 billion in Q3, $106 billion less than previously anticipated, with Q4 borrowing projected to reach $565 billion.

On July 29, 2024, a few stocks also served up some sizzling performances that would make even the most jaded investor’s portfolio salivate. Tesla (TSLA) charged ahead, electrifying the market with a 3.5% gain, proving that Elon Musk’s tweets aren’t the only thing that can spark investor interest. Meanwhile, McDonald’s stock defied expectations, rising 3.7% despite disappointing quarterly results, as investors pinned their hopes on potential turnaround efforts driven by value-based menu pricing. Not to be left out of the feast, 2U Inc. (TWOU, $2.65, +112%) schooled the competition with a notable rise, demonstrating that in the world of online education stocks, it’s not always about getting straight A’s, but rather about making the grade with investors. These companies showed that in the unpredictable buffet of Wall Street, sometimes it pays to have your burger and eat it too – especially when it comes with a side of tech and education.

Anticipated Economic Events

Investors are bracing for a week packed with pivotal economic events that could significantly impact market sentiment. The Federal Open Market Committee (FOMC) meeting on July 30-31 takes center stage, with market participants eagerly awaiting insights into potential interest rate cuts. While no immediate rate changes are expected, any signals regarding a September rate adjustment could sway market direction. Additionally, Friday’s release of July’s Nonfarm Payrolls, Unemployment Rate, and Average Hourly Earnings will provide crucial indicators of labor market health and wage pressures. Other notable events include Tuesday’s Consumer Confidence Index and Thursday’s ISM Manufacturing PMI, both serving as key barometers of economic activity and sentiment.

Oil Prices & Energy Sector

As of July 29, 2024, WTI futures were trading at $77.61 per barrel, down 1.15% in the last 24 hours but up 5.68% year-to-date[. Brent futures, the global benchmark, stood at $79.99 per barrel, showing a 0.99% decrease over the past day while maintaining a 1.18% increase for the year. Both benchmarks have experienced recent downward pressure, with WTI reaching its 52-week low of $67.81 on December 13, 2023, and its 52-week high of $95.52 on September 27, 2023 – a stark 18.75% difference from current prices. Similarly, Brent crude hit its yearly low of $72.48 on the same day as WTI and peaked at $96.62, also on September 27, 2023, reflecting a 17.21% gap from present levels.

Despite positive economic data from China, including faster year-on-year growth in industrial profits for June, overall market sentiment remains cautious. Traders have reduced their net long positions in both WTI and Brent crude, reflecting growing concerns about global demand. This pessimism is fueled by mixed signals from the U.S. economy, with the Conference Board’s Leading Economic Index (LEI) decreasing by 0.2% in June and the U of M consumer sentiment index dropping to its lowest level since November. Additionally, the personal savings rate in the U.S. has fallen to 3.4%, approaching levels last seen after the 2008 financial crisis, indicating potential consumer difficulties.

Tensions in the Middle East have added a layer of complexity to the oil market, with a recent rocket attack on Israel by Hezbollah increasing the risk of a broader conflict. Israel’s security council has authorized Netanyahu’s government to launch a retaliatory attack, potentially leading to major fighting between Hezbollah and Israel, and possibly drawing in Iran. This heightened geopolitical risk is providing upward support to oil prices, despite ongoing concerns about global demand.

The clean tech sector in Europe faces significant challenges, with companies abandoning expansion plans and bracing for lower sales due to policy uncertainties and economic pressures. In contrast, India’s power and energy sector is poised for growth, with hiring expected to surge in the first half of the year as the country pursues its ambitious net-zero goals. This dichotomy highlights the varying trajectories of energy markets across different regions, influenced by local policies and economic conditions.

VP Watchlist Updates

Eupraxia Pharmaceuticals (EPRX, $2.82,+8.05% today, with a noticeable trading volume increase) is a clinical-stage biotechnology company focused on the development of locally delivered, extended-release products that have the potential to address therapeutic areas with high unmet medical need. The Company strives to provide improved patient benefit and has developed technology designed to deliver targeted, long-lasting activity with fewer side effects. DiffuSphere™, a proprietary, polymer-based micro-sphere technology, is designed to facilitate targeted drug delivery, with extended duration of effect, and offers multiple, highly tuneable pharmacokinetic (PK) profiles. This investigational technology can be engineered for use with multiple active pharmaceutical ingredients and delivery methods.Note that Eupraxia recently completed a Phase 2b clinical trial (SPRINGBOARD) of EP-104IAR for the treatment of pain due to osteoarthritis of the knee. The trial met its primary endpoint and three of the four secondary endpoints. Eupraxia has expanded the EP-104 platform into gastrointestinal disease with the Phase 1b/2a RESOLVE trial for treating EoE. Eupraxia is also developing a pipeline of later- and earlier-stage long-acting formulations. Potential pipeline indications include candidates for other inflammatory joint indications and oncology, each designed to improve on the activity and tolerability of currently approved drugs.On June 5, Eupraxia announced that results from its Phase 2 study of EP-104IAR for the treatment of osteoarthritis of the knee will be presented at the upcoming European Alliance of Associations for Rheumatology (“EULAR”) European Congress of Rheumatology 2024 (the “Meeting”). The EULAR Meeting is being held in Vienna, Austria from June 12-15, 2024.On May 23, Eupraxia announced that regulators in Australia and Canada have cleared the Company’s request to expand its Phase 1b/2a RESOLVE trial, which is evaluating the safety and efficacy of EP-104GI as a treatment for eosinophilic esophagitis (“EoE”). For further details about Eupraxia, please visit the Company’s website at: www.eupraxiapharma.com.

Shares of Lantern (LTRN), an artificial intelligence (“AI”) company developing targeted and transformative cancer therapies using its proprietary RADR® AI and machine learning (“ML”) platform with multiple clinical stage drug program, closed at $4.61, +.66%.On July 10, Lantern announced a significant advancement towards the development of a diagnostic for its drug candidate LP-184. The diagnostic is currently based on qRT-PCR (quantitative real-time polymerase chain reaction) technology and is focused on quantifying the amount of PTGR1 RNA in patient tumor samples to assess the potential for sensitivity to Lantern’s drug candidate LP-184. The company plans to further develop and validate the assay for its use as a potential tool for patient selection in later stage clinical trials across a broad range of solid tumors that have shown sensitivity to LP-184. Panna Sharma, CEO of Lantern Pharma stated, “This milestone represents a significant leap forward in our precision oncology approach and in ensuring that we enrich our future LP-184 clinical trials with the patients we believe will be most likely to benefit. By working to develop a companion diagnostic for LP-184, we’re not just advancing a drug candidate; we’re paving the way for more personalized and effective cancer treatments for patients that have the highest likelihood of benefitting from the therapy. The planned use of biomarkers like PTGR1 in our clinical trials exemplifies our commitment to data-driven, patient-centric drug development.”Panna Sharma, CEO of Lantern, was interviewed recently on the ‘Today In Nashville’, a program hosted by Carole Sullivan and associated with Nashville’s WSMV 4, an NBC affiliate. Watch it here to learn more.On June 12, Lantern announced that the Japan Patent Office (JPO) has issued a Certificate of Patent for patent application no. 2021-513267 / registration no. 7489966 directed to Lantern Pharma’s drug candidate LP-284 ((+)N-hydroxy-N-(methylacylfulvene)urea). The Certificate of Patent entitled “Illudin Analogs, Uses Thereof, and Methods for Synthesizing the Same” covers molecule LP-284, including claims covering the new molecular entity. A Certificate of Patent is issued after JPO examinations have confirmed the merits of a patent request. Lantern values the broad protection this latest patent provides. Lantern estimates that LP-284 can have the potential to improve outcomes for 40,000 to 80,000 patients with blood cancers annually, with a global annual market potential of $4 Billion USD.

Shares of Indaptus Therapeutics, Inc. (Nasdaq: INDP) closed at $2.05, -.49%. Indaptus is a company with the ability to harness both the body’s innate and adaptive immune responses, believes that they are uniquely positioned to revolutionize the treatment of cancer and certain infectious diseases. Indaptus Therapeutics has evolved from more than a century of immunotherapy advances. The Company’s novel approach is based on the hypothesis that efficient activation of both innate and adaptive immune cells and pathways and associated anti-tumor and anti-viral immune responses will require a multi-targeted package of immune system-activating signals that can be administered safely intravenously (i.v.). Indaptus’ patented technology is composed of single strains of attenuated and killed, non-pathogenic, Gram-negative bacteria producing a multiple Toll-like receptor (TLR), Nucleotide oligomerization domain (Nod)-like receptor (NLR) and Stimulator of interferon genes (STING) agonist Decoy platform. The products are designed to have reduced i.v. toxicity, but largely uncompromised ability to prime or activate many of the cells and pathways of innate and adaptive immunity. Decoy products represent an antigen-agnostic technology that have produced single-agent activity against metastatic pancreatic and orthotopic colorectal carcinomas, single agent eradication of established antigen-expressing breast carcinoma, as well as combination-mediated eradication of established hepatocellular carcinomas and non-Hodgkin’s lymphomas in standard pre-clinical models, including syngeneic mouse tumors and human tumor xenografts.On June 4, Indaptus announced that its Chief Medical Officer, Roger Waltzman, M.D., will present an update on the Company’s lead product candidate, Decoy20, at the 7th Annual Next-Gen Immuno-Oncology Conference in Boston on June 20-21, 2024. Dr. Waltzman will present preliminary results from the Company’s ongoing Phase 1 study of Decoy20, an intravenous treatment using killed bacteria designed to broadly stimulate the immune system, in patients with advanced solid tumors.On June 3, Indaptus announced updated data from its ongoing Phase 1 clinical trial of Decoy20 in patients with solid tumors. The data were featured in a poster presentation at the American Society of Clinical Oncology (ASCO) Annual Meeting on June 1 in Chicago, Illinois.

Shares of ADT Inc. (ADT), a leading provider of monitored security and automation solutions for residential and small business customers in the United States and Canada, closed at $7.74, +..13% after establishing a new 52-wk high of $7.92 during intraday trading recently. ADT is due to report quarterly results on Thursday, Aug. 1. On June 17, ADT announced the appointment of Dan Houston and Danielle Tiedt to the Company’s Board of Directors as additional independent directors. In conjunction with their appointments, Houston and Tiedt will both join the Board’s Nominating and Corporate Governance Committee, while Houston will also join the Board’s Compensation Committee. Houston is chairman, president and chief executive officer of Principal Financial Group, a global financial services company with $709 billion of assets under management. He joined Principal in 1984 and has served as chief executive officer since 2015. Houston serves on several boards of non-profit organizations, including the American Council of Life Insurers, Iowa State University Business School Dean’s Advisory Council and Partnership for a Healthier America. As chief marketing officer for Google’s YouTube, Tiedt oversees global marketing strategy, product marketing and brand vision. During her tenure, YouTube has grown to a $40 billion business operating in 76 countries. Prior to joining Google in 2012, Tiedt held various leadership roles in technology product management and marketing at Microsoft. She serves on the board of the 4-H Foundation, America’s largest youth development organization.

Modular Medical, Inc. (NASDAQ: MODD, $1.5295, +.63% and is up +9.84% at $1.68 in the aftermarket), is a development-stage, insulin delivery technology company seeking to launch the next generation of user-friendly and affordable insulin pump technology. Using its patented technologies, the company seeks to eliminate the tradeoff between complexity and efficacy, thereby making top quality insulin delivery both affordable and simple to learn. Their mission is to improve access to the highest standard of glycemic control for people with diabetes taking it beyond “superusers” and providing “diabetes care for the rest of us.” Modular Medical was founded by Paul DiPerna, a seasoned medical device professional and microfluidics engineer. Prior to founding Modular Medical, Mr. DiPerna was the founder (in 2005) of Tandem Diabetes and invented and designed its t:slim insulin pump. More information is available at https://modular-medical.com.

On July 15, Modular Medical announced a proof-of-concept study with Gubra A/S (“Gubra”) in a high-fat, diet-induced obese (“DIO”) mouse model to explore the potential future use of the MODD1 pump platform to assist patients who struggle with tolerability, inconsistent efficacy, and cost of long acting GLP-1 therapies. “A recent study published by Blue Health Intelligence using data from a national dataset of private insurers found that about half of all patients prescribed a GLP-1 drug for weight loss discontinued after the first 12 weeks, with approximately 30% discontinuing in the first four weeks,” commented Jeb Besser, Chief Executive Officer of Modular Medical. “These discontinuations appear to be due to a combination of tolerability, cost, and inconsistent efficacy. We suspect that short-acting peptides may mitigate many of these side effects and dosage swings by better modulating dosage, but these therapies have generally been abandoned as “too difficult to use” because they required multiple doses per day to be effective. We see the potential for such dosing regimes to be greatly simplified and even improved by the use of pump technology to provide both a basal dose and boluses to control hunger. Using Gubra’s gold-standard DIO mouse model, MODD will seek to determine whether an existing FDA approved, short-acting peptide delivered from a pump platform can provide a more personalized and more tolerable solution for patients who found long acting GLP-1 drugs too difficult to tolerate, while delivering comparable glycemic control and weight loss, specifically for people with type 2 diabetes and obesity.” Learn more here.

On June 3, Modular Medical, Inc. announced that it is set to join the Russell Microcap Index at the conclusion of the 2024 Russell indexes annual reconstitution, effective when the U.S. market opens on July 1, 2024. Membership in the Russell Microcap Index, which remains in place for one year, means automatic inclusion in the appropriate growth and value style indexes. FTSE Russell determines membership for its Russell indexes primarily by objective, market-capitalization rankings and style attributes. Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for active investment strategies. Approximately $10.6 trillion in assets are benchmarked against Russell’s US indexes. Russell indexes are part of FTSE Russell, a leading global index provider. Also read the following