“Anticipation” Vista Partners Daily Market Recap 8/22/19

By John Heerdink LinkedIn

The markets closed mixed today as we anticipate Fed Chair Jerome Powell’s comments that are due to surface during the annual meeting in Jackson Hole tomorrow. Today the markets were met with interviews of a couple of the members of the FOMC which expressed that they were against last month’s interest rate cut and would be against another cut in September. This was a bit unsettling to the markets as there has been a high consensus in the marketplace that we were going to get another cut in September.  The yield curve continued its inverted ways intermittently throughout the days well, but at the end of the day the 2-yr Treasury yield closed at 1.60% up .03, the 10-yr yield finished higher at 1.61% up .03. The U.S. Dollar Index closed at 98.21 down .09%.

The S&P 500 lost 1.48 points or .05% to end the session at 2,922.95. The Dow rose 49.51 points closing at 26,252.24  up .19%.  The tech-heavy Nasdaq moved below the 8k level closing at 7,991.39 down .36% or 28.82 points. The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index, moved lower closing at 1,506.00 giving back 3.85 points or .25%. 

Volatility bets closed higher today.   The CBOE Volatility Index (VIX) closed at $16.68/share up 5.57% or $.88/share and traded between $15.63 and $17.68. The 2x leveraged ETF TVIX  closed at $16.55/share up 2.99% or $.48/share and traded between $15.78 and $17.48 today.

Energy

Oil prices dropped today again today down .7% closing at $55.28/bb. The energy sector was down .5%. Dow 30 energy participants Chevron (CVX) moved lower by .13% closing at $117.73/share & Exxon (XOM) closed lower by .22% closing at $69.57/share.  Occidental Petroleum (OXY) closed at $44.70/share down .80% after their recent sale of $13 billion of debt to fund their Anadarko Purchase. 

Metals & Mining

Gold prices closed back below $1500/oz at $1497/oz. Silver closed at $17.17/oz. Hecla Mining Company (HL) closed at $1.58/share down 2.32%. This week, MONARCH GOLD CORPORATION (MQR.TO) (MRQRF) (MR7.F)  announced the closing of the acquisition of an aggregate 100% interest in the Fayolle property from Hecla Quebec Inc. (“Hecla”) (HL), formerly known as Aurizon Mines Ltd., and Typhoon Exploration Inc. (“Typhoon”) (TYP.V). In exchange, Monarch has issued 12 million shares to Hecla and 3.4 million shares to Typhoon. Monarch has also paid Typhoon an amount of $500,000 and will pay an additional $500,000 in five months and $150,000 in 12 months. The shares issued to Hecla and Typhoon are subject to restrictions on their transfer for periods of up to 24 months.

Healthcare

The S&P 500 healthcare sector closed at 1049.81 down .49%. UnitedHealth (UNH) closed down 3.08% closing at $232.94/share, Walgreens Boots Alliance (WBA) closed at $50.95/share up .10% & Cigna (CI) lost 4.04% closing at $155.78/share post their recent Q2 earnings beat.

INVO Bioscience, Inc. (IVOB) ended the day at $.3075/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. 

Last week, INVO Bioscience (IVOB) announced that revenues for the quarter totaled $658,638 compared to $110,210 in the second quarter of 2018, an increase of 498%. Revenue growth was driven primarily by increased product sales in the U.S. as shipments to Ferring were above expectations outlined in May 2019 as they began to increase their marketing activities. On January 14, 2019, the Company closed an exclusive U.S. licensing agreement with Ferring International Center S.A. the parent Company of Ferring Pharmaceuticals U.S. to commercialize the INVOcell™ system for use in the treatment of infertility. As part of the U.S. licensing agreement, the Company received a $5 million one-time milestone payment, with the ability to receive an additional $3 million upon obtaining a label enhancement from the U.S. Food and Drug Administration. Read Complete Story.

Biotech

The Ishares Nasdaq Biotechnology ETF (IBB) moved lower down .82% closing at $105.17. 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 closed at $2.08/share flat on the day. The average daily trading volume is 421,953 shares per day and reported Q2 financial results & company update today. Recently, Atossa also announced that recently the online launch of company CEO Steven Quay’s Tedx UofW Talk, “How to Be Smart When You’re Dense: Preventing Breast Cancer by 2030.” The talk has been posted online at https://www.youtube.com/watch?v=hK4PlbYE_5M&list=PLsRNoUx8w3rNCo4uCVXiNDFZLiKrIOQ1J&index=5 and can also be accessed via the company’s website at www.atossagenetics.com. In the Tedx UofW talk, Steven Quay, M.D., Ph.D., Atossa’s Chief Executive Officer outlines the journey of Atossa Genetics in identifying improved ways to identify women at high risk of breast cancer, using mammography to identify dense breast tissue. Dr. Quay also details his experience with triumph, failure, and perseverance while trying to prevent one of the world’s most common diseases: breast cancer. He emphasizes the need for unshaken efforts to solve such complex problems and ways that he and his team are doing so in breast cancer research. Also, recently 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.”

San Diego-based biotech Fate Therapeutics (NASDAQ: FATE), dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders,  closed at $18.42/share down 4.46% on 603,854 shares of trading after recently establishing a new all-time intraday high of $22.82! The 52-week range is $10.78 – $22.82. Today, FATE announced that the U.S. Patent and Trademark Office has issued U.S. Patent No. 10,370,452 covering compositions and uses of effector T cells expressing a chimeric antigen receptor (CAR), where such T cells are derived from a pluripotent stem cell including an induced pluripotent stem cell (iPSC). The foundational patent, which expires in 2034, is owned by Memorial Sloan Kettering Cancer Center (MSK) and is licensed exclusively to Fate Therapeutics for all human therapeutic uses. “The breadth of this newly-issued patent, which is not restricted by the signaling domain of the CAR construct nor by the antigen to which the CAR targets and binds, covers off-the-shelf, iPSC-derived CAR T cell therapy for the treatment of cancer, infectious disease, and immune disorders,” said Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics. “This patent is a testament to the prescient work of MSK’s Dr. Michel Sadelain in combining CAR and iPSC technologies in an effort to overcome the significant challenges that limit the widespread adoption of patient- and donor-sourced engineered T-cell immunotherapy.” Cantor Fitzgerald initiated coverage on FATE on July 22nd with an overweight rating. Oppenheimer initiated coverage on Friday, July 12th with an Outperform Rating. Guggenheim Securities initiated coverage on FATE recently with a “Buy Rating” and a $25/share price target.  Mizuho initiated coverage with a price target of $27/share within the last 30 days.

Stoke Therapeutics, Inc. (Nasdaq: STOK), a biotechnology company that is pioneering a new way to treat the underlying cause of genetic diseases by precisely upregulating protein expression,  announced recently that the enrollment of the first patient in an observational study of children and adolescents ages 2 to 18 with Dravet syndrome. Dravet syndrome is a severe and progressive genetic epilepsy characterized by frequent, prolonged and refractory seizures, beginning within the first year of life. The effects of the disease go beyond seizures and often include cognitive regression or developmental stagnation, ataxia, speech impairment, and sleep disturbances. STOK shares closed at $31.93/share up .03% on 112,644 of trading volume.

 

Consumer Staples and Discretionary

Walmart (WMT) closed at $111.91/share down .10% after their recent earnings beat and positive guidance.

Disney (DIS) closed at $136.08 up .24% after recently revealing that it will launch its new streaming service Disney+ in Canada & Netherlands on November 12th and then in Australia and New Zealand the next day.

The Home Depot (HD) closed at $221.02/share up .28%.

Target (TGT) closed at $106.32/share  moving up another 3.22% after yesterday’s 20.4% jump after beating earnings estimates.

Boeing (BA) closed at $354.41 up 4.2% as reports surfaced that the company is planning to increase the production of the 737 to 52/mo in February 2019 if they get the sign off from regulators that allow the commercial return of the troubled 737 MAX.

Financials

The financial sector was up .6% today.

Och-Ziff Capital Management (OZM), soon to be renamed Sculptor Capital Management,  closed at $22.39/share off .67% after their recent earnings beat and positive guidance.

JPMorgan Chase & Co. (JPM) closed at $108.72/share up 1.03%.

Goldman Sachs (GS) closed at $202.42/share up .87%.

Economy

Wednesday we received the existing home sales report which confirmed an 2.5% increase 2.5% m/m in July resulting in a seasonally adjusted annual rate of 5.42M. Total sales came in .6% higher than a year ago. The weekly MBA Mortgage Applications Index report showed a decline of .9%.

Today, we received the initial jobless claims report and moved lower to 209,000 for the week ending August 17 & continuing claims dropped to 1.674 million for the week ending August 10. The Conference Board’s Leading Economic Index (LEI) moved up .5% in July.

The Fed will continue its annual Jackson Hole Summit on Friday and we should hear from Fed Chair Jerome Powell.

Day or Short Term Trading Update

Last Thursday’s buy of Bloom Energy ( BE) at $5.06/share and $4.99/share paid off as it surged to $5.70 about a 14% move. We were seeking a swing back up to at least the high $5’s after its recent beat down and we got it.

We identified San Jose, CA’s Zscaler (ZS), a cloud-based web security provider, as a  a bounce play after it got slammed earlier this week after being downgraded and closed down at $70.80. ZS popped then to $74.51/share for an approximate 5% gain.

The Hain Celestial Group (HAIN) was also identified as another bounce play. HAIN shares closed trading at $18.36/share Wednesday after a recent analyst downgrade and a simultaneous price drop from the $22 level that seemed to be triggered by fears surrounding The Brexit issue and timeline. Today shares rose to a intraday high of $18.99 and then closed at $18.91 for 3% move.

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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