“A Mnuchin Fizzle” Vista Partners Daily Market Recap 6/26/19

By John Heerdink LinkedIn

The markets initially popped to the positive side today reacting early to a CNBC interview that revealed that Treasury Secretary Steven Mnuchin had told CNBC that the “U.S. and China were close to a trade deal, and he’s optimistic that progress can be made during weekend talks between President Donald Trump and China’s Xi Jinping during the G-20 meeting. “We were about 90% of the way there [with a deal] and I think there’s a path to complete this.”  After the reality of the situation sank in that nothing yet had been resolved, the markets proceeded to come back to earth for the most part and extended its wait for the G-20 Summit -President Trump – Xi Jinping meeting to happen at the end of the week.

The S&P 500 dropped 3.60 points and closed at 2,913.78 down .12% on the day. The Dow lost 11.40 points closing down .04% at 26, 536.82. The tech-heavy Nasdaq proved to be the lone positive mover ending up .32% closing at 7,909.97 up 25.25 points. The Russell 2000, the small-cap stock market index of the bottom 2,000 stocks in the Russell 3000 Index,  ticked down .21% giving back 3.26 points closing at 1,517.78.

Volatility bets closed a bit lower today with a relatively tight trading range. The CBOE Volatility Index (VIX) closed higher at $16.21 off .43% or $.07/share. It traded between $15.47 – $16.60. The 2x leverage ETF TVIX also closed lower at $19.95 down 1.72% and trading between $19.37 and $20.28 today.

The US Dollar Index bumped up today .1% ending the day at 96.22 and ending a four-day decline.

The 2-yr treasury yield ended at 1.78% (+.04) & the 10-year Treasury note closed up at 2.05% (+06).

Energy stocks got a shot in the arm today as oil prices closed higher at $59.37/bbl up 2.6% regaining its recent momentum.  Dow 30 energy participants Chevron (CVX) moved higher by .23% closing at $123.93 & Exxon (XOM) closed at $76.60 up .43%.

Big tech stocks did fairly well too today.  Amazon (AMZN) gained 1.04% closing at 1,897.83,  Alphabet (GOOG) ticked down .6% closing at $1,079.80, Apple (AAPL) jumped 2.16% closing at $199.80, Facebook (FB) gave back .62% closing at $187.66. Shares of Microsoft (MSFT) gained .37% closing at $133.93 & Intel (INTC) flew up 2.86% closing at $48.19/share. Memory chip maker Micron (MU) skyrocketed a whopping 13.34%  closing at $37.04  after it beat earnings and revenue expectations and guided up while leading the semiconductor industry higher.

On the recent IPO front, Zoom Video Communications (ZM) moved higher by 1.53% closing at $86.33 & Uber Technologies (UBER), the ride-sharing company closed lower at $42.50/share & still below its recent IPO price of $45. Plant-based burger maker Beyond Meat (BYND) closed at $160.48 soaring another 6.56% after yesterday’s positive 6.82% move higher. 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 $37.19 up 5.65%. 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.

Entertainment giant Disney (DIS) closed at $140.40 gaining .33%. 

Institutional alternative asset manager Och-Ziff Capital Management Group (OZM) closed at $21.13 down 1.22%. The 52-wk range is $8.60 – $23. OZM sports a healthy 5.65% cash dividend.

Home Depot (HD) gained .82% ending the day at $206.42.

Dow 30 component & the world’s leading manufacturer of construction & mining equipment Caterpillar (CAT) closed at $135.15 up  1.08%.

McDonald’s (MCD) closed lower at $204.55 down .56%.

The health care sector took another hit overall today after President Trump signed another executive order earlier this week that is seeking to make health care costs more transparent to patients. The S&P 500 healthcare sector closed at 1061.90 off 1.25% but there were some bright spots.

Change Healthcare Inc., a leading independent healthcare technology platform, announced today the pricing of its 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 are expected to begin trading on the Nasdaq Global Select Market on June 27, 2019, under the symbols “CHNG” and “CHNGU,” respectively.

Community Health Systems, Inc. (CYH) one of the largest publicly traded hospital companies in the US hit an intraday high of $2.655/share & a low of $2.50 today and closed the day at $2.56 down 1.54% on 1.76 million shares of trading. 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.

The Ishares Nasdaq Biotechnology ETF (IBB) moved down slightly again by 1% closing at $105.82. This sector has been on more than healthy run over the last 30 days but has slowed the last couple of days. The 52-wk range is $89.01 – 122.97.

Atossa Genetics (ATOS),  a Seattle-based biotech firm developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions, soared into the close yesterday closing at $2.31/share up 13.79% but closed today at $2.23 off 3.46%. The average daily trading volume is 748,318 shares per day.  The Maxim’s Group’s biotech analyst, Jason McCarthy, Ph.D., reiterated his ATOS buy rating recently with a $9/share 12-Month Target Price. See his update report which is called “Reports the Quarter, Endoxifen Programs Progressing, Data Updates Expected Over 2019.”

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. On Wednesday last week, 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 $30 last week prior to closing trading at $26.41/share up 1.62% today. See complete story.  

INVO Bioscience, Inc. (IVOB) ended the day at $.40 as daily trading volume continues to lift as the company continues to report progress post announcing their exclusive U.S. partnership with Ferring Pharmaceuticals, a leader in the reproductive health industry. Ferring will provide 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. We look forward to their market expansion for many years.”  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.

Pfizer (PFE) closed lower at $42.99 after last week’s announcement about 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 $83.54 down by 1.99%.

San Diego-based biotech Fate Therapeutics (NASDAQ: FATE), dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders,  closed at $19.52/share down 1.01% on 771,249 shares of trading after establishing a new all-time intraday high of $20.15. The 52-week range is $8.64 – $20.65. 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 HealthcareConferencee in New York yesterday. 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 this week.

Boston-based Pieris Pharmaceuticals (PIRS) closed at $4.47 down 2.83% on 249,731 shares of trading. The stock traded between $4.2838 & $4.61.72 today and the 52-wk range is $2.39 – $6.55.

Xeris Pharmacueticals, Inc. (XERS) closed lower at $10.62 off 1.85%. Xeris is a specialty pharmaceutical company leveraging its novel formulation technology platforms to develop and commercialize ready-to-use injectable and infusible drug formulations.

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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