“Day 4 JPM2020 Complete & Broad Markets Rise To New Record Levels” – Vista Partners Daily Market Recap For January 16, 2020

Day 4 of the 38th Annual J.P. Morgan Healthcare Conference in San Francisco is now complete. I logged in a few more meetings with companies in the biotech and healthcare sectors & also attended the Tribe Public Keynote Speaker luncheon event where Dietrich Stephan Ph.D., CEO of  Pittsburgh-based biotech firm Neubase Therapeutics (NBSE) ($6.58/share, +3.46%), presented the latest with regard to their work in gene silencing. NBSE expects several data points to be released in the 1st half of 2020 with regard to their gene silencing platform that is initially targeting HD and ALS. INVO Bioscience, Inc. (IVOB, +16.11%) and Medesole, a leading supplier of healthcare products in India and the Middle East, announced the signing of a joint venture to operate dedicated INVOcell clinics in India. The S&P 500 healthcare sector moved higher again today closing at 1216.96, +.52% after achieving another new 52-wk high of 1217.77.

The broad markets charged forward to new record highs on the backside of the signed Phase One Trade Deal and again on the shoulders of earnings reports that beat expectations from recognizable names i.e. Morgan Stanley (MS), Charles Schwab (SCHW), Spirit Airlines (SAVE), XPO Logistics (XPO), &  Signet Jewelers (SIG) which closed at $30.13/share up an amazing +40.2% today.

The S&P 500 ended at 3,316.81, +.84%. 11 of the eleven S&P 500 sectors closed in postive territory with the information technology sector leading the way up +1.4%. The FAANG stocks’ finished in green territory. Facebook (FB) closed at $221.77/share, +.28%, Amazon (AMZN) closed at $1877.94/share, +.85%, Apple (AAPL) closed at $315.24/share, +1.25%, Netflix (NFLX) closed at $338.62/share, -.13%, & Alphabet (GOOG) closed at $1451.70/share, +.87%.

The Nasdaq Composite ended at 9,357.13, +1.06%.

The Dow Jones Industrial Average ended at 29,297.64, +.92%.

The Russell 2000 also rose by +1.36% ending at 1705.22.

The “fear gauge” Vix (TVIX) ended at $39.30/share, -4.7% and traded in a range of $39.10- $40.30.

Economic Reports

On Monday the Treasury Budget Report for December confirmed a deficit of $13.3B vs. a deficit of $13.5B in the same period a year ago while the over the last 12 months is $1.022T.

On Tuesday, the Consumer Price Index Report for December confirmed that Total CPI was up +.2% month/month while core CPI moved up by +.1%  The NFIB Small Business Optimism Index Report showed a move lower to 102.7 from 104.7.

On Wednesday we had a fairly busy economic schedule as the Producer Price Index for final demand moved up by +.1% as did the Producer Price index for final demand. The year/year moves higher are now at +1.3% and +1.1%, respectively. The Mortgage Bankers Association reported a whopping +30.2% jump in weekly mortgage applications. The Empire State Manufacturing Survey for January confirmed a move higher to 4.8. The Federal Reserve’s Beige Book for December stated that the economic activity during the last six weeks of 2019 continued its modest expanding ways.

It was busy again on Thursday, the Retail Sales report revealed a move higher by +.3% month/month in December. Retail sales, excluding autos, rose +.7%. The Initial claims report for the week ending January 11 decreased by 10k to 204k while continuing claims for the week ending January 4 dropped by 37k to 1.767M. Import prices for December were rose +.3% as export prices were decreased by -.2%. Total business inventories dropped by -.2% m/m in November. Total business sales rose +.7%. The Philadelphia Fed Index for January flew up to 17. The NAHB Housing Market Index for January decreased to 75.

Investing & Inspiration

“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

Tomorrow

We are due to receive the Housing Starts & Building Permits for December, Industrial Production & Capacity Utilization for December. We will also receive the preliminary University of Michigan Index of Consumer Sentiment for January tomorrow.

On a trading basis here are 2 ideas in healthcare to check out again today which may become even more interesting if we see a pullback tomorrow as the annual JPMorgan Healthcare Conference comes to an end this week.

• IsoRay, Inc. (ISR) closed at $.8376/share, +4.7% today. On November 12th, 2019 ISR reported its record Q1 fiscal 2020 financial results and  CEO Lori Woods said, “These are exciting times for Isoray. We are very pleased by the continued progress we have made and the accelerated growth we have achieved. These results speak to the momentum we are realizing from the strategic direction and changes we have implemented to chart a new course for Isoray. Clearly, the strategies we’ve employed and the steps we have taken to establish Isoray’s leadership role in the prostate brachytherapy industry over the past year are resulting in accelerated organic growth and market share gains. A clear example can be seen in the trailing twelve months where our net new physician customer count increased 26% versus the previous twelve month period. We still have work to do and we will remain focused on our goals for growth and profitability.” Revenue for the first quarter of fiscal 2020 grew 48% to a record $2.32 million versus $1.56 million in the prior year comparable period. The revenue increase was driven by 51% growth in the company’s core prostate brachytherapy business. Prostate brachytherapy represented 90% of total revenue for the first quarter of fiscal 2020 compared to 88% in the prior year comparable period. Non-prostate brachytherapy revenue in the first quarter of fiscal 2020 was comprised primarily of sales to treat brain, gynecological, colorectal, and other cancers. Gross profit as a percentage of revenues increased to 53.4% for the three months ended September 30, 2019, versus 33.5% in the prior year comparable period. First-quarter gross profit increased 136% to $1.24 million versus $0.52 million in the first quarter of fiscal 2019, largely attributed to increased sales and significantly lower isotope unit costs compared to the prior year comparable period, continued leverage of the fixed cost components within costs of sales, and more efficient isotope usage. The lower isotope unit costs are related to the previously discussed supply chain change made at the end of the calendar year 2018.

• Neubase Therapeutics (NBSE) closed trading at $6.58/share, +3.46% and expects several data points to be released in the 1st half of 2020 with regard to their gene silencing platform that is initially targeting HD and ALS. On Thursday, Jan. 16th Neubase will be presenting again in San Francisco at the Tribe Public Keynote Speaker luncheon event which caters to members that at portfolio managers, family offices, RIA’s and Accredited Investors.