“Coronavirus Growth Meets Widespread Double-Digit Market Rebound” – Vista’s Weekly For April 9, 2020

This week, we saw the number of worldwide coronavirus cases grow to more than 1.5 million while the number of worldwide deaths jumped to 93,000. The number of people that have recovered from coronavirus is up to 346,000. In the US we now have over 450,000 cases up from 266,000 last Friday and 15,000 US citizens have now past away due to COVID-19. In response, as we all well know, the world and specifically the US continue to rollout social distancing, lockdown and shutdown initiatives to contain and hopefully win against the coronavirus and it seems to be working as we have seen a slowdown in the growth rate of new infections in Europe out of Italy & Spain while NYC has reported lower hospitalizations.

However, these actions have resulted in an abrupt halt to a significant portion of our economy which was again evidenced in the surge of US jobless claims that was reported to have jumped by over 6.6 million again bringing the tally to a ridiculous number that is now up to 16.5 million. On the positive side, the newly instated Paycheck Protection Program, part of the $2.2 trillion coronavirus relief package, has continued to roll out and will hopefully provide some cushion and a launching pad for growth going forward. We also saw the Fed confirm additional support this week as they added another $2.3 trillion in emergency lending capacity for businesses and municipalities.

More importantly, we saw NIAID Director Fauci, President Trump’s right-hand man during the crisis, state that the COVID-19 death models are improving in the US and we could possibly see further evidence of progress as soon as next week. Work also continues to progress towards finding one or more treatments for this deadly virus as a number of efforts charge forward with fervor across the globe. Fingers crossed that we find something soon that could accelerate our progress on all fronts and defend us in the future.

With all of this in mind, the coronavirus’ grip on the markets this week loosened a bit and we saw a widespread double-digit rebound although we are still not back to recent market highs. Your accounts may not be completely back in shape but I am sure they must be looking a bit better.  The major indices ended as follows. The Dow ended the week at 23,053, up by +12.7% and is now down -16.9% YTD. The S&P 500 ended the week at 2,790, representing a +12.1% weekly gain and is now down -13.6% YTD. All eleven sectors rose this week as the real estate, materials, and financials sectors respectively closed up +21.2%, +20.7% & +19.1%. The Nasdaq Composite closed at 8,154 on Friday, representing a weekly +10.6% upward move and is now down -9.1% YTD. The Russell 2000 moved sharply higher too closing at 1,247 representing a weekly +11.6% increase and is now down a -25.3% YTD. 

Oil prices pulled back this week to end at $22.87/bbl down significantly from last week’s close of $26.85/bbl. Oil prices reacted negatively after Saudi Arabia, Russia, & U.S. failed during the week to come to a conclusion regarding cutting oil production by ~10 million barrels per day, However, Thursday afternoon the Wall Street Journal has reported that they have indeed agreed that in May & June they will now reduce production by ten million barrels.  Chevron (CVX) & Exxon (XOM) moved up significantly this week to close respectively at $84.31/share ($75.11, last wk) and $43.13/share ($39.2, last wk.)

The FAANG stocks results ended the week up across the board.  Facebook (FB) closed at $175.19/share, +.52% Friday, ($154.18/share a week ago), Amazon (AMZN) closed at $2,042.76/share, -.01% Friday, ($1,906.59/share a week ago), Apple, Inc. (AAPL) closed at $267.99/share, +.72% Friday, ($241.41/share a week ago), Netflix (NFLX) closed at $370.72/share, -.11% Friday, ($361.76/share a week ago) & Alphabet (GOOG) closed at $1,211.45/share, +.10%, ($1,097.88/share a week ago.)

Gold prices closed at $1,697/0z. slightly up from $1,628/oz & silver prices closed higher at $15.70/oz up from $14.48/oz last Friday. 

The U.S. Dollar Index weakened to end the week at 99.50 down from 100.61 last week.  US Treasury yields were mixed week over week. The 2-yr Treasury yield closed at .22% down from .225%, the 10-yr yield closed at .73% up from .596%, & the 30-yr yield ended at 1.35% up from 1.217%. 

Here’s a summary of this week’s economic reports: On Monday, we did receive any significant economic reports. On Tuesday, we received the following significant economic reports: The NFIB Small Business Optimism Index Report confirmed a drop to 96.4 in March, the Job Openings Report confirmed a drop to 6.882 million in February, & the Consumer credit report confirmed that it moved higher by $22.3 billion in February. On Wednesday, we received the following significant economic reports: The weekly MBA Mortgage Index Report confirmed a decline by -17.9%, The Purchase Index Report confirmed it declined by -12.2%, & The Refinance Index Report fell -19.4%. On Thursday, we confirmed that 6.606M jobless claims were filed for the week ending April 4 while the Continuing Claims report for the week ending March 28 confirmed that it was up to 7.455M. The preliminary reading for the University of Michigan’s Consumer Sentiment Index for April dropped to 71 from 89.1 in March. The Producer Price Index for final demand dropped by -.2% month/month in March while the Core PPI moved up by +.2%. The Wholesale inventories report showed a decline of -.7% in February.

Consider taking a look at the following stocks next week:  Atossa Therapeutics (ATOS), Fate Therapeutics (FATE), Intellicheck, Inc. (IDN),  INVO Bioscience (INVO), Neubase Therapeutics (NBSE) & Annaly Capital Management, Inc. (NLY). Here are some quick updates on each of these companies:

• On Monday, Atossa Therapeutics’ (ATOS) founder, Chairman, and CEO, Steven Quay, M.D., PhD., was interviewed by Fox News before the market opened regarding his COVID-19 Hope Trial where he is seeking to study the use of two approved drugs to rapidly find a viable coronavirus treatment. Here’s the link to the interview in case you missed it earlier today: https://video.foxnews.com/v/6147410883001#sp=show-clips  Dr. Quay received his M.D. and Ph.D. from The University of Michigan, was a postdoctoral fellow at MIT with Nobel Laureate H. Gobind Khorana, a resident at the Harvard-MGH Hospital, and was on the faculty of Stanford University School of Medicine. His contributions to medicine have been cited over 9,600 times. He has founded six startups, invented seven FDA-approved pharmaceuticals, and holds 87 US patents. Over 80 million people have benefited from the medicines he invented. His current passion is the prevention of the two million yearly breast cancer cases worldwide. The stock jumped from a close last Friday of $1.04/share to has high as $2.11/share this week prior to settling at $1.48 at the close this week. If the company announces further progress with regard to this subject then we might see further progress.

• Shares of Intellicheck, Inc. (IDN), an industry leader in identification authentication solutions jumped from the mid $2 range this week to an intraday high of $4.15/share prior to closing at $4.15/share up +28.09% on Thursday. On Tuesday, IDN announced that a 40-location upper Midwest furniture store is now using Intellicheck’s Retail ID Web. Retail ID Web is a standalone web application that requires no point of sale system integration. The technology solution engages the customer’s mobile device to capture identification documents such as a driver’s license, state-issued ID, or military ID for authentication. The U.S. top 50 multi-brand furniture retailer and distributor needed an immediate way to authenticate person-not-present credit card purchasers, stopping fraud despite store closures due to the coronavirus. This prominent furniture retailer was reported to have required an immediate solution that needed no integration yet could also authenticate credit card purchasers over the phone. They chose to equip sales associates fielding consumer credit card phone orders with Retail ID Web, a frictionless, real-time technology solution. Retail ID Web authenticates identification documents, allowing sales associates to quickly and seamlessly fulfill credit card purchases while deterring losses associated with bad actors and fraudulent cards. “With many retail stores now closed, the coronavirus pandemic has fueled a new wave of internet and person-not-present identity theft and fraud. Retail ID Web provides retailers and customers with unparalleled protection against this fraud. Retailers and credit card issuers are looking for immediate solutions given the new shopping paradigm. Retail ID Web gives them that solution with no integration required. All they need to do is log in and they can be instantly authenticating credit card purchasers to assure they are who they say they are,” said Intellicheck CEO Bryan Lewis.

• INVO Bioscience (INVO), a medical device company that provides novel solutions in assisted reproductive technologies to the reproductive health care community worldwide with its lead product, INVOcell, is a novel medical device, which is used in infertility treatment that enables egg fertilization and early embryo development in the woman’s body, announced its financial results for the year ended December 31, 2019, which was highlighted by a 199% increase of their topline revenues in 2019 while gross margins also grew to approximately 91% compared to approximately 82% in 2018. The growth was driven primarily by increased product sales in the U.S. as the Company’s U.S. commercialization partner, Ferring International Center, S.A. (“Ferring”), began to ramp their marketing activities as well as from recognizing $714,286 of the $5,000,000 Ferring seven-year U.S. exclusive licensing & distribution fee. Learn more. The Company further reported that the U.S. clinic locations which are trained to offer INVOcell have nearly tripled since their January 2019 agreement with Ferring & confirmed that each clinic location will vary in terms of implementation time and growth. Ferring has established a website, www.invocell.com, which provides information for patients and health care professionals, in addition to providing a tool to search for clinic locations that offer INVOcell. Steve Shum, CEO of INVO stated recently, “The growing awareness of INVOcell can be seen through the overall heightened social media activity and the increasing number of inbound inquires our team is experiencing. We have also witnessed certain early-adopting clinics becoming increasingly more active with promoting INVOcell as the preferred infertility solution, over IVF, with its lower cost, more natural approach, and equivalent success rates. Equally important, INVOcell has allowed these practices to substantially increase their capacity and hence treat more patients as a result of improved efficiencies, particularly within the lab. We expect to see the 2018 Society For Assisted Reproductive Technology (SART) data published in the coming weeks ahead, at which point we will have a full two-years (2017 and 2018) of published retrospective data on INVOcell usage in the marketplace, which we believe will significantly enhance our marketing and commercialization efforts by further validating the success of the INVOcell technology. As previously highlighted, we also received approval to begin our planned clinical trial to evaluate the modified INVOcell system for the effectiveness of achieving fertilization, implantation, embryo development, clinical pregnancy, and live birth after 5-days of continuous vaginal incubation, which will also further validate the technology and support the now growing volume of retrospective data reflecting real market usage of the technology.”

• Shares of Neubase Therapeutics (NASDAQ: NBSE) closed this week at $8.14/share up +5.17% and closer to its all-time high of $8.45/share. Investment banks BTIG, HCW, Oppenheimer & Guggenheim maintain analyst coverage with BUY ratings on NBSE that include a price target that ranges in a $13-$15/share target price range. NBSE recently announced positive preclinical data from its pharmacokinetics studies in non-human primates (“NHPs”) and in vitro pharmacodynamics data in patient-derived cell lines. NeuBase believes these data validate the key advantages of the proprietary NeuBase peptide-nucleic acid (“PNA”) antisense oligonucleotide (PATrOL™) platform and support the Company’s decision to advance the development of its Huntington’s disease (“HD”) and myotonic dystrophy type 1 (“DM1”) programs, as well as the potential expansion of its therapeutic pipeline into other indications. Dr. George Church, professor of genetics at Harvard Medical School and member of the National Academy of Sciences, stated, “Given the activity and broad biodistribution observed in these studies and the potential for easier target definition, I believe the PATrOL™ technology may have a potent impact on the future of drug development and treatment of genetic diseases.” 

• Shares of Annaly Capital Management, Inc. (NLY) flew higher again today closing at $6.01/share up +5.57% after Wednesday’s +29.21% move. NLY is a diversified capital manager, invests in and finances residential and commercial assets. The company invests in various types of agency mortgage-backed securities, non-agency residential mortgage assets, and residential mortgage loans; and originates and invests in commercial mortgage loans, securities, and other commercial real estate investments. Their dividend yield is currently showing at 17.39%. 

In the meantime, I believe that we will continue to see high and a significant amount of volatility in the markets that will continue to produce opportunities, but with the recent widespread move one will have to be a bit more selective again. The markets are indeed feeling better overall as the 10% swings have subsided and understanding around the coronavirus situation seems to be trending in a positive way.

Please enjoy the weekend at home with the family, appreciate what you have, stay flexible in the markets to strike when the opportunity appears attractive, and plan and dream of what life may bring all of us in we can move forward safely through this period together.

Please also enjoy the balance of the weekly newsletter’s videos, quotes, updates and keep up the great work in helping our nation and world recover from the coronavirus epidemic.

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, Former Ceo of Disney

“In the short run, the market is a voting machine. But in the long run, it is a weighing machine.” – Ben Graham

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

“The fundamental law of investing is the uncertainty of the future.” -Peter Bernstein

“How many millionaires do you know who have become wealthy by investing in savings accounts?” -Robert G Allen

“Greed is all right, by the way. I think greed is healthy. You can be greedy and still feel good about yourself.”-Ivan Boesky

“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

“I talk about macro themes a lot because they are fun to talk about, but it is the risk management that is the most important thing. The risk control is all bottom-up. I structured the business right from the get-go so that we would have lots of diversification.” -Michael Platt

“Blaming speculators as a response to financial crisis goes back at least to the Greeks. It’s almost always the wrong response.” -Larry Summers

Tomorrow

The stock market is closed on Good Friday this week and then trading hours are normal next week Monday- Friday.

We are also due to receive the following significant economic data next week:

• The first-quarter earnings season kicks off on April 14
• Retail sales on Wednesday
• Building permits on Thursday
• The leading economic index on Friday