Broad Based Selling Lands All 11 Sectors In The Red As The Markets Head Due South on Thursday

After we had the nice bounce yesterday the markets started moderately positive on Thursday but then headed due south. The Nasdaq dropped 1.99% to end at 10,919.59, the S&P 500 ended at 3,3939.19 down 1.76%. The Dow 30 closed at 27,534.58 off 1.45% and the Russell 2000 ended at 1,507.75 down 1.23%. 

All 11 sectors finished in the red and the decline was led by the energy sector off 3.7% & the information technology sector was down 2.3%. The macroeconomic schedule provided the following reports. The initial claims report for the week ending September 5  remained at 884k while continuing claims for the week ending August 29 rose by 93k to 13.385M. The Producer Price Index report for final demand rose by .3% month/month in August. The index for final demand, excluding food and energy, rose .4% month/month. The Wholesale inventories report confirmed a drop by .3% in July. 

The FAANGs including led the charge except for Netflix which was the lone hold out to end in the red. Facebook (FB) closed at $268.09/share down 2.06%, Amazon (AMZN) closed at $3,175.11/share down 2.86%, Apple (AAPL) closed at $113.49/share down 3.26%, Netflix (NFLX) dropped 3.9% closing at $480.67/share & Alphabet (GOOG) closed at $1,532.02/share down 1.6%. 

Electric vehicle manufacturer, Tesla (TSLA), rose 1.38% closing at $371.34/share today, however, Chinese firm Nikola (NKLA), which recently struck a $2B deal with GM to build their hydrogen fuel cell electric vehicle (FCEV) startup pickup called Badger, was targeted by a short-selling “research” firm Hindenburg Research who stated, “Today, we reveal why we believe Nikola is an intricate fraud built on dozens of lies over the course of its Founder and Executive Chairman Trevor Milton’s career.” Here’s their report. NKLA shares dropped 11.33% and closed at $37.57./share. It will be interesting to see how this plays out from my seat on the sidelines. On a positive note,  shares of Navistar (NAV) closed at $40.78/share up 13.78% as it was reported that Traton, the truck, and bus division of Volkswagen, increased its bid for Navistar to $3.6B or $43/share in cash.

Gold closed at $1946(+0) while silver closed at $26.99/oz (-.08). North American silver and gold producer Hecla Mining Company (HL) closed at $5.62/share down 1.75% after recently establishing another new 52-week high of $6.79/share during intraday trading. HL’s 52-week low is $1.38. Tribe Public’s Webinar Presentation and Q&A Event will Phillips S. Baker, Jr., President, and CEO of Hecla Mining Company (NYSE: HL) that was scheduled for Wednesday, September 9th has been rescheduled for September 30th (8:30 am pacific/ 11:30 am eastern.) He will deliver a ~20-minute presentation titled “A Uniquely Scarce Investment.” You may join by registering at Tribe Public to grab a seat. Last week, Hecla announced that its Board of Directors is increasing the expected minimum quarterly dividend 50% to an annualized one and one-half cents per share and lowering the silver-linked dividend threshold price. If Hecla’s average realized silver price for a quarter is $25.00 per ounce, the new silver-linked quarterly dividend policy provides an annualized two cents per share, while at $30 and above, the realized silver-linked dividend per quarter is unchanged. Recently, Hecla reported 24% higher revenues on higher production and prices in Q2 2020. Cantor Fitzgerald Analyst Mike Kizak updated his coverage moving his Speculative Buy rating to a Buy rating and moving his target price to $7.25/share. North American silver producer First Majestic Silver (AG) closed at $11.65/share down 1.52% after recently establishing a new 52-week high of $14.57 recently. Today, First Majestic announced that it has entered into an agreement with Cormark Securities Inc., as underwriter (the “Underwriter”) pursuant to which the Underwriter has agreed to purchase, on a bought deal basis, 5,000,000 common shares of First Majestic (the “Common Shares”) at a price of CDN$15.60 per Common Share for gross proceeds of CDN$78,000,000 (the “Offering”). The sole investor under the Offering will be Canadian billionaire businessman, Eric Sprott, through 2176423 Ontario Ltd., a corporation beneficially controlled by him. This investment will result in Mr. Sprott holding approximately 2.3% of First Majestic’s issued and outstanding common shares, post-closing.

Oil prices dropped 2.1% closing at $37,27/bbl. A few energy leaders closed as follows: Chevron (CVX) closed at $78.15/share down 2.35%, midstream player, Enterprise Products Partners (EPD), closed trading at $17.12/share down 1.61% and is currently sporting an attractive $1.78/share dividend or 10.23% while USA Corporation Partners, LP. (USAC), one of the nation’s largest independent providers of natural gas compression services, closed at $10.51/share down 1.22% while offering a $2.10/share (19.74%) dividend.

The 2-yr US treasury yield closed up 1 basis point closing at .14% while the 10-yr yield dropped 2 basis points to .69%. The U.S. Dollar Index strenghtened .2% to end at 93.41.

Here’s a couple of other equities that moved significantly higher today along with our stocks in view and what to expect from the macroeconomic schedule:

TOMORROW

The macroeconomic calendar will deliver the Consumer Price Index report for August and the Treasury Budget report for August.

WATCH LIST

Atossa Therapeutics (NASDAQ: ATOS) closed at $2.05/share after recently reaching a new 52-wk high of $5.08.

• • ATOS’ stock has seen positive trading volatility this year and has moved up from $.76/share on significantly increasing trading volume and established a new 52-week high of $5.08/share on August 3rd. 

  • Today, Atossa filed an S-3 $100M shelf registration shelf. 

• • This week, Atossa announced a positive interim safety assessment from the first cohort of healthy participants in their Phase 1 clinical study using Atossa’s proprietary drug candidate AT-301 administered by nasal spray. This first group of 8 participants received a single dose of either AT-301A (placebo) or AT-301B (active drug). This blinded, positive assessment by the safety committee allows the study to now enroll in the next cohort. Learn more.

• • Recently, Atossa announced its Q2 2020 financial results and gave a corporate update highlighting the following: 
    • Received approval from the Australian Human Research Ethics Committee (HREC) to open a Phase 1 clinical study in Australia using Atossa’s proprietary drug candidate AT-301 administered by nasal spray. As of August 3, 2020, all necessary approvals were obtained and enrollment is expected to begin in the coming weeks.
    • Contracted with Avance Clinical Pty. Ltd. to conduct a clinical study of Atossa’s AT-301. Avance is a leading Australian clinical research organization and has successfully completed multiple clinical studies of Atossa’s proprietary Endoxifen.
    • Announced successful in vitro testing of both of Atossa’s COVID-19 therapies under development: AT-301 and AT-H201. The preliminary study results show that AT-301 and the components of AT-H201 inhibit SARS-CoV-2 infectivity of VERO cells in a laboratory culture, which is the standard disease model used for initial screening of COVID-19 drug candidates.
    • Announced interim findings following 18 months of an Expanded Access (or “compassionate use”) single-patient study of Endoxifen. The patient in the study had no cancer recurrence and suffered no side effects. Endoxifen did not cause other safety and tolerability concerns in this patient.
    • Advanced product development programs with multiple key hires in clinical, regulatory, and chemistry manufacturing and controls. The hiring of these talented and highly accomplished individuals will help accelerate the advancement of Atossa’s development pipeline, which includes programs in breast cancer and COVID-19.
    • Completed sales of all available shares under Atossa’s at-the-market financing program with total gross proceeds to Atossa of $5 million through July 2020. As of June 30, 2020, the Company had approximately $7.5 million in cash and cash equivalents and with this program, they received an additional $4.3 million in July 2020.

• • Dr. Steven Quay MD, Ph.D., Atossa’s founder, and CEO, recently published the following 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. Proceeds from the book will go to military veterans performing COVID-19 relief work in their communities.  You may order it here.

• Shares of Fate Therapeutics (FATE) closed at $31.74/share up 1.44%. Its 52-week range is $12.59 – $38.52/share.

  • Fate is a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders. 

  • On Aug. 19, Fate announced that Edward Dulac has been appointed Chief Financial Officer. Mr. Dulac comes to the Company from Celgene Corporation, where he most recently served as Vice President, Business Development & Strategy, and brings an extensive array of biopharmaceutical experience having served for over 20 years in positions in finance, business development, and product portfolio strategy.

  • On Aug. 5, Fate Reported Second Quarter 2020 Financial Results and Highlights Operational Progress ending the quarter with $533 Million in Cash & Short-term Investments. Scott Wolchko, President and Chief Executive Officer of Fate Therapeutics stated, “Early clinical data from our FT596 program are very encouraging, as we observed a partial response in a heavily-pretreated patient with refractory diffuse large B-cell lymphoma at the first dose level without any reported events of cytokine release syndrome, neurotoxicity or graft-versus-host disease. Additionally, the safety, tolerability, and immunogenicity data across our off-the-shelf NK cell programs continue to suggest that multiple doses of iPSC-derived NK cells can be administered to a patient without matching. We continue to be pleased with our pace of innovation, where the recent clearances of our IND applications by the FDA for FT538, the first-ever CRISPR-edited iPSC-derived cell therapy, and for FT819, the first-ever iPSC-derived CAR T-cell therapy, continue to demonstrate our unique ability to rapidly bring multiplexed engineered, off-the-shelf NK cell and T-cell cancer immunotherapies to patients. In addition, we successfully launched our Janssen collaboration with strong momentum, bringing together Janssen’s proprietary tumor-targeting antigen binders and our industry-leading iPSC product platform to develop novel off-the-shelf CAR NK and CAR T-cell immunotherapies for hematologic malignancies and solid tumors.”

  • July 14th, FATE announced that the Company entered into an exclusive license agreement with Baylor College of Medicine covering alloimmune defense receptors, a first-in-class approach that renders off-the-shelf allogeneic cell products resistant to host immune rejection. Preclinical studies published in the journal Nature Biotechnology (https://www.nature.com/articles/s41587-020-0601-5) demonstrate that allogeneic cells engineered with a novel alloimmune defense receptor (ADR) are protected from both T- and NK-cell mediated rejection, and provide proof-of-concept that ADR-expressing allogeneic cell therapies can durably persist in immunocompetent recipients.

  • On June 11th, FATE 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. 

• Shares of NeuBase Therapeutics (NBSE) closed at $8.45/share today down 3.98% after recently reaching a new 52-week high recently of $11.78/share.

  • Chairman, CEO & Founder of NeuBase, Dietrich A. Stephan, Ph.D., presented at Tribe Public’s Webinar Presentation and Q&A Event that is scheduled to begin at 8 am pacific/11 am eastern Wednesday, August 26th, 2020.  During this complimentary, 30-minute event, Dietrich Stephan, Ph.D. will introduce the NeuBase’s next generation of gene silencing technology & the company’s progress with treatment candidates in Huntington’s Disease (HD) and Myotonic Dystrophy (DM1) and be available for Q&A. Here’s a link to the Tribe Public Youtube channel where you may watch the interview presentation.

• • NeuBase is developing the next generation of gene silencing therapies with its flexible, highly specific synthetic antisense oligonucleotides. The proprietary NeuBase peptide-nucleic acid (PNA) antisense oligonucleotide (PATrOL™) platform allows for the rapid development of targeted drugs, increasing the treatment opportunities for the hundreds of millions of people affected by rare genetic diseases, including those that can only be treated through accessing of secondary RNA structures. Using PATrOL technology, NeuBase aims to first tackle rare, genetic neurological disorders. NeuBase is continuing its progress towards developing treatment candidates in Huntington’s Disease (HD) and Myotonic Dystrophy (DM1.)

  • RBC Capital Markets recently initiated coverage of NBSE today with an Outperform, Speculative Risk rating & a $16 price target. 

  • NBSE recently reported its financial results for the three and nine-month periods ended June 30, 2020. Dietrich A. Stephan, Ph.D., chief executive officer of NeuBase stated, “We are pleased with the continued execution of our development programs during 2020. This includes the announcement in late-March of compelling data that firmly validates our platform as a viable fully synthetic approach to genetic medicine. Notably, these data confirm that our therapies penetrate into the brain when administered systemically – overcoming one of the grand challenges of drug delivery. PATrOL-enabled compounds can also access tissues throughout the entire body, opening our platform up to unexplored indications that have not previously been accessible by genetic medicine technologies. These positive pharmacokinetic and pharmacodynamic data-position our unique technology to output a vast pipeline of therapeutics to resolve innumerable human diseases. We anticipate presenting additional new data with respect to our ongoing progress in the fourth calendar quarter of this year. A key objective for our company shortly after the March data announcement was to strengthen our balance sheet in order to fully advance our strategies in HD and DM1, and build out our pipeline. This was accomplished in April with the closing of our oversubscribed capital raise of approximately $33.3 million in net proceeds that was led by fundamental healthcare investors and significantly increased our institutional shareholder base. We expect this to support our R&D and general corporate expenses into the second calendar quarter of 2022.”

• Shares of Aduro (ADRO) closed at $2.36/share.

• • On Aug. 18th, Chinook Therapeutics, Inc., a privately-held clinical-stage biotechnology company focused on the discovery, development, and commercialization of precision medicines for kidney diseases,  announced a $106 million private placement financing, with participation from new widely respected healthcare investors including EcoR1 Capital, OrbiMed, funds managed by Rock Springs Capital, Avidity Partners, Surveyor Capital (a Citadel company), Ally Bridge Group, Monashee Investment Management LLC, Northleaf Capital Partners, Janus Henderson Investors, Sphera Biotech, and other top-tier healthcare investors. As part of the financing, Chinook’s existing investors, Versant Ventures, Apple Tree Partners and Samsara BioCapital, will purchase $25 million in Chinook common stock on the same terms as the new investors in lieu of their prior commitment to purchase convertible notes. The private placement closing is expected to occur immediately prior to the closing of the previously announced proposed merger between Chinook and Aduro Biotech, Inc. (NASDAQ: ADRO). Following the proposed merger closing, which is expected to occur in the second half of 2020, Aduro will be renamed Chinook Therapeutics, Inc., and is expected to trade on the Nasdaq Global Select Market under the ticker symbol “KDNY”. Closing of the private placement is subject to the satisfaction or waiver of all closing conditions for the proposed merger. Following the private placement financing, and upon closing of the merger, Chinook is expected to have at least $275 million in operating capital.

• • On August 3rd, provided a business update and reported financial results for the second quarter ended June 30, 2020. Stephen T. Isaacs, chairman, president, and chief executive officer of Aduro stated, “The second quarter of 2020 was highlighted by the announcement of our planned merger with Chinook Therapeutics as well as significant progress in our BION-1301 program for IgA nephropathy (IgAN). We recently dosed the first IgAN patient with BION-1301 in Part 3 of our ongoing Phase 1 study and presented positive data from Parts 1 and 2 of this study in healthy volunteers at the 57th ERA-EDTA Virtual Congress. The data indicated BION-1301 was well-tolerated, had a half-life of approximately 33 days, achieved over 90% target engagement with a single 450 mg dose of BION-1301, and demonstrated dose-dependent and durable reductions in IgA and IgM levels, and to a lesser extent, IgG levels. We continue to enroll patients in our Phase 2 study of ADU-S100 in combination with pembrolizumab in squamous cell carcinoma of the head and neck and make progress on our cGAS-STING antagonist research collaboration with Lilly. We ended the second quarter of 2020 with a cash position of $186.1 million, which we believe will enable us to continue our ongoing STING and APRIL programs in the near-term and also meet our net cash requirements at the close of the merger with Chinook.” 

• Shares of INVO Bioscience (INVO) closed at $4/share.

• • Industry forecasts suggest that only 1% to 2% of the estimated 150 million infertile couples worldwide are currently being treated

• • INVO’s mission is to increase access to care and expand infertility treatment across the globe with a goal of improving patient affordability and industry capacity. 

• • Recently, INVO announced financial results for the quarter ended June 30, 2020. Steve Shum, Chief Executive Officer of INVO Bioscience stated, “Despite the impact that COVID-19 has had in delaying fertility treatment for many around the world, we continue to make strong progress on our key goals to create commercialization agreements for our INVOcell solution. As we have been advancing our commercialization efforts outside the United States, industry leaders, as well as our internal team, have begun to recognize the expanded opportunity that exists through the creation of these joint ventures for developing dedicated, INVO-only centers in the U.S. and select markets around the world. The INVO center model also allows INVO Bioscience to participate in a greater share of the economics. Over the past year, we have had a number of conversations that started as standard distribution agreements that have evolved into potential joint venture agreements. We believe such partnerships, such as the one signed in India, will ultimately be mutually beneficial to achieving our goal to increase access to care and lower the cost of fertility treatment across the globe. Similar to the first quarter of 2020, the second quarter 2020 results were impacted by the COVID-19 virus outbreak which resulted in reduced product sales to Ferring. A majority of clinics curtailed their fertility services in connection with the lockdowns that occurred. Many of the clinics have since resumed operations, albeit at a measured pace. As a result, and along with Ferring’s required annual minimums, we expect to experience stronger sales in the second half of 2020. We also believe that new guidelines that requiring limiting interactions and social distancing at most clinics could favor accelerated adoption of our technology, which allows for a more streamlined cycle approach with fewer patient visits and reduced lab requirements and resources.”

  • I am expecting to see the company push forward with new market supportive initiatives and awareness of their INVOcell product in the back half of 2020 that may result in further adoption in the US clinics and establishing new joint ventures, partners, and distributors throughout the world.

  • Tiny Float – INVO has ~7.89 million shares outstanding and with ~+15% insider ownership the share float is tight and recently confirmed that the company raised ~$3.5M.

• North American silver and gold producer Hecla Mining Company (HL) ended trading at $5.22 down 1.75%. 

• • Hecla recently announced that its Board of Directors is increasing the expected minimum quarterly dividend 50% to an annualized one and one-half cents per share and lowering the silver-linked dividend threshold price. If Hecla’s average realized silver price for a quarter is $25.00 per ounce, the new silver-linked quarterly dividend policy provides an annualized two cents per share, while at $30 and above, the realized silver-linked dividend per quarter is unchanged. Recently, Hecla reported 24% higher revenues on higher production and prices in Q2 2020.

Economic Reports

• On Monday, we did not receive any significant reports as it was Labor Day.
• On Tuesday, we received the Consumer credit report which confirmed a rise of $12.3B in July also confirming a contraction in lending as banks tighten their purse strings. The NFIB Small Business Optimism Index report for August moved up to 100.2.
• On Wednesday, we received the July job openings report which confirmed a rise to 6.618M & the weekly MBA Mortgage Applications Index report confirmed and a rise of 2.9% so not earth-shattering news.
• On Thursday, we received the initial claims report for the week ending September 5 which remained at 884k while continuing claims for the week ending August 29 rose by 93k to 13.385M. The Producer Price Index report for final demand rose by .3% month/month in August. The index for final demand, excluding food and energy, rose .4% month/month. The Wholesale inventories report confirmed a drop by .3% in July. 

Investing & Inspiration

“Know what you own, and know why you own it.” – Peter Lynch

“Liquidity is only there when you don’t need it.” -Old Proverb

“If you want to be a millionaire, start with a billion dollars and launch a new airline.” – Richard Branson

“Fear incites human action far more urgently than does the impressive weight of historical evidence.” – Jeremy Siegel

“In investing, what is comfortable is rarely profitable.” – Robert Arnott

“Spend each day trying to be a little wiser than you were when you woke up.” – Charlie Munger

“The entrance strategy is actually more important than the exit strategy.” – Edward Lampert

“The rivers don’t drink their own water; Trees don’t eat their own fruits. The sun does not shine for itself, And flowers do not spread their fragrance For themselves. Living for others is a rule of nature” – Pope Francis

“It is impossible to produce superior performance unless you do something different from the majority.” – John Templeton

“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

“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