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Dow, S&P Close Lower But Apple’s New Record High Drives Nasdaq’s Rise On Thursday

By John F. Heerdink, Jr.

 Tech behemoth Apple (AAPL) moved to a new record high of $464.15/share during intraday trading while closing at $460.04/share up 1.77% now enjoying a $1.97 trillion market cap. The push helped lead the tech-heavy Nasdaq higher as it closed at 11,042.50 up .27% on Thursday. The balance of the FAANG stocks closed the trading session as follows:  Facebook (FB) closed at $261.30/share up .54%, Amazon (AMZN) closed at $3,161.02/share off .04%, Netflix (NFLX) gained 1.23% closing at $481.33/share & Alphabet (GOOG) closed at $1,518.45/share up .79%. The information technology sector tiptoed forward closing up .04% and the communication services sector moved up .4% to lead the day but 9 out of eleven sectors closed south of the Mendoza line. 

The rest of the indices finished slightly in the red today, The Dow 30 closed 27,896.72 down .29%, the S&P 50o closed at 3,373.43, down .2% an near a new record high itself, and the Russell 2000 closed 1,579.79 down .22%. 

The macroeconomic schedule also produced a couple of relatively interesting reports on Thursday. The initial claims report for the week ending August 8 fell by 228k to 963k dropping back below the 1 million mark for the first time in 5 months while continuing claims for the week ending August 1 dropped by 604k to 15.486M. The import prices report confirmed a rise by .7% in July & when you exclude oil it only bumped up .2%. The export prices report also confirmed a rise by.8% in July and when you exclude agriculture it moved up by .7%.

Gold jumped back into the win column today as it closed at $1,960(+44) while silver also moved higher as it closed at $27.66/oz (+2.23). North American silver and gold producer Hecla Mining Company (HL) closed at $6.11/share +8.33% after recently establishing another new 52-week high of $6.79/share during intraday trading recently. HL’s 52-week low is $1.38.  Last week, 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 $11.87/share up 4.17% after recently establishing a new 52-week high of $14.57 recently. On Aug. 6th, AG reported that revenues had declined to $34.9M representing a decrease of 58% in response to COVID-19 and the decision to stockpile metal inventory in an effort to maximize future profits. 

Oil prices declined .8% closing at $42.26/bbl. A few energy leaders closed as follows: Chevron (CVX) closed at $89.82/share off .99%, Exxon (XOM) closed at $443.01/share down 2.45% & highly leveraged Occidental Petroleum Corporation (OXY) closed at $14.60/share down 2.14%. Midstream player, Enterprise Products Partners (EPD), closed trading at $18.81/share up .05% and is currently sporting an attractive $1.78/share dividend or 9.47% while USA Corporation Partners, LP. (USAC), one of the nation’s largest independent providers of natural gas compression services, closed at $12.11/share down 2.81% while offering a $2.10/share (17.33%) dividend.

The 2-yr US treasury yield closed even at .16% again today while the 10-yr yield rose 5 basis points to close at .72%. The U.S. Dollar Index weakened by .2% to end at 93.29.

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:

BIG MOVERS

  • Shares of e-commerce & m-commerce provider Weyland Tech Inc. (WEYL) closed at $8.96/share up a whopping 28% today after announcing an agreement to acquire Fixel AI, a “leading innovator in AI-powered digital marketing technology.”
  • Shares of alternative energy technology, i.e. hydrogen fuel systems,  Plug Power Inc. (PLUG) closed up 6.87% today at 11.36/share. The rebound move came after the company recently beat the street’s earning expectations and after the company priced 30,675,00 shares of common stock at $10.25/share yesterday raising over $300M!

TOMORROW

The macroeconomic calendar will deliver the following point:

  • The Retail Sales for July
  • The preliminary Q2 productivity and unit labor costs report
  • The Industrial Production and Capacity Utilization for July report
  • The preliminary Univ. of Michigan Index of Consumer Sentiment report for August
  • the Business Inventories report  for June

WATCH LIST

Atossa Therapeutics (NASDAQ: ATOS) closed at $3.39/share down 5.83% after recently reaching a new 52-wk high of $5.08.

    • Interest continues to swell around both their breast cancer treatment and two COVID-19 drug programs.
    • 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 when Atossa announced that it has received approval from the ethics committee to open a Phase 1 clinical study in Australia using Atossa’s proprietary drug candidate AT-301, to be administered by nasal spray. All necessary approvals have now been obtained and enrollment is expected to begin in the next 30 days.

    • Today, 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.
    • We are seeking to see if ATOS successfully advances one or both COVID-19 programs by receiving IRB and FDA approval to move into the clinic.
  • Shares of Fate Therapeutics (FATE) closed at $35.01/share up 2.64%. 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. 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 $7.84/share down 4.04% today after recently reaching a new 52-week high recently of $11.78/share.

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

    • As we have been stating, we are following Neubase Therapeutics (NBSE) for a number of reasons including its development of a modular antisense peptide nucleic acid (PNA) platform with the capability to address rare genetic disease caused by mutant proteins with a single, cohesive approach.

    • Today, NBSE 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 $2.48/share today up .4%.
    • 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.” =
    • On June 2nd, Aduro Biotech, Inc.(ADRO) and Chinook Therapeutics, Inc., a privately-held clinical-stage biotechnology company focused on the discovery, development, and commercialization of precision medicines for kidney diseases, today announced that the companies have entered into a definitive merger agreement pursuant to which Aduro will acquire all of the outstanding capital stock of Chinook in exchange for shares of Aduro common stock representing approximately 50 percent of Aduro’s outstanding common stock immediately following completion of the transaction. The combined company is expected to have approximately $200 million in cash, cash equivalents, and marketable securities at closing, including $25 million in additional financing committed by Chinook’s existing investors. Following 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 Market under the ticker symbol “KDNY”.
  • Shares of INVO Bioscience (INVO) closed at $3.53/share down 3.42%.
    • 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. 
    • Today 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.”

    • Recently, a spotlight report was published by Birmingham, Alabama-based America Institute of Reproductive Medicine (AIRM) highlighting the success achieved in their practice utilizing INVOcell. INVO’s INVOcell® is the world’s only in vivo Intravaginal Culture System. “The AIRM clinic became an early adopter and advocate for the use of INVOcell shortly after we received FDA-clearance. We appreciate their willingness to share their story of that successful implementation of INVOcell within their clinical practice, which highlights important aspects of our INVOcell technology solution,” stated Steve Shum, CEO of INVO Bioscience. You can review the report here.

    • I am expecting to see the company push forward with new market supportive initiatives 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.

  • Shares of TransEnterix (TRXC) closed trading at $.4231/share down 2.4% today.
    • On Aug 5, TRXC announced its operating and financial results for the second quarter of 2020. Anthony Fernando, President, and CEO of TransEnterix stated, “Despite operating in a challenging environment throughout the second quarter, we made significant progress towards our goals for the year, which include increasing system installations, increasing procedure volumes globally, and continuing to gain regulatory approvals for new technologies and expanding indications for use for the Senhance. Leveraging the momentum we generated in the first quarter, we were able to sign two new system leases in the quarter while at the same time maintaining the quality of our pipeline. Additionally, we made progress against our portfolio expansion and clinical validation efforts. While procedure volumes were down in the quarter, we saw a strong rebound from April to June which has continued into July. We continue to believe we are well-positioned to deliver on our strategy and bring transformative technology to surgeons, hospitals, and patients globally.”
    • TRXC is digitizing the interface between the surgeon and the patient to improve minimally invasive surgery (MIS) through a new category of care called Digital Laparoscopy. Digitizing the interface enables the use of advanced capabilities like augmented intelligence, connectivity, and robotics in laparoscopy, and allows them to address the current clinical, cognitive, and economic shortcomings in surgery. TRXC’s Senhance®️ Surgical System brings the benefits of Digital Laparoscopy to patients around the world while staying true to the principles of value-based healthcare. Learn more about Digital Laparoscopy with the Senhance Surgical System here: https://Senhance.com/
    • Recently, TRXC announced that Maastricht Unversity Medical Center+ (MUMC+) has entered into an agreement to lease and utilize a Senhance Surgical System, which would be the first hospital to acquire a Senhance to be utilized in pediatric minimally invasive surgery.
    • On July 6th TRXC announced the closing of $15M registered direct common share offering at $.35/share and came into focus on our radar as it is again “gassed up” for the time being.
    • TRXC shares swiftly came down from the $1 level prior to the deal that was priced at $.35/share (no warrants) as it would appear that shorting and/or a significant amount of selling took place prior to the closing of the funding.
    • TRXC shares have already bounced once post the recent funding from the $.30 cent range to above the $.42 cent level twice now and if the last couple of days stock performance is any evidence then it could be at least heading back to the same level soon and if lucky could recover to predeal levels.

Economic Reports

  • On Monday, we received the JOLTS or Job Openings report which confirmed that job openings moved higher to 5.889M in June.
  • On Tuesday, we received the Producer Price Index report for final demand which rose .6% in July while excluding food & energy, the index increased .5%. The NFIB Small Business Optimism Index report also confirmed a decline to 98.8 in July.
  • On Wednesday, the Consumer Price Index (CPI) for July report confirmed a rise of .6% month/month 7 when you exclude food and energy the CPI also increased rose .6% month/month beating consensus expectations.  The Treasury Budget report confirmed a $63B deficit for July and y/y improvement from $119.7B. The weekly MBA Mortgage Applications Index report also confirmed a 6.8% increase.
  • On Thursday, the initial claims report for the week ending August 8 fell by 228k to 963k dropping back below the 1 million mark for the first time in 5 months while continuing claims for the week ending August 1 dropped by 604k to 15.486M. The import prices report confirmed a rise by .7% in July & when you exclude oil it only bumped up .2%. The export prices report also confirmed a rise by.8% in July and when you exclude agriculture it moved up by .7%.

Investing & Inspiration

“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

“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, Ceo of Disney

“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

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