Fear, Fed & Technicals Feed Indiscriminate Market Selloff on Thursday

Today’s indiscriminate market selloff can possibly be attributed to many issues including the fear and evidence of a COVID-19 resurgence in many states like Texas, California, and Arizona as reopening steps stride forward, the Fed’s somewhat bleak outlook that was shared with us yesterday where they stated that real GDP will contract deeply by 6.5% in 2020, and the market had just experienced a technically V-shaped frothy rebound had rushed back maybe a bit too fast producing a record on the Nasdaq and the valuations of many companies well beyond their skis while the reopening trades i.e. the airline & energy sectors were out of favor again.

As a result, we saw the S&P 500 close down 5.8% at 3,002.10 and below its 200-day MA as the energy sector off 9.5% and financials off 8.2% led the decline of all sectors in the red today. The Dow also dropped 6.9% now nearly 10% in two days & the Russell 2000 lost 7.58% also nearly 10% in the last two days. The Nasdaq which climbed to a new all-time high above 10K yesterday dropped 5.27% closing at 9,492.73.

The FAANG stocks ended down across the board as follows: Facebook (FB) closed at $224.43/share down 5.2%, Amazon (AMZN) closed at $2,557.96 down 3.38%,  Apple (AAPL) closed at $335.90/share down by 4.8%, Netflix (NFLX) lost 2.05% closing at $425.56/share, & Alphabet (GOOG) closed at $1,403.84/share down by 4.23%. Unless further negative news surfaces overnight I would expect a market bounce in the morning purely based on the technical over quick sell-off.  

Gold & silver prices dropped along with markets so no safe haven here today as gold closed at $1,730/oz (-7) & silver prices closed at $17.82/oz (-.44). North American silver and gold producer Hecla Mining Company (HL) closed at $3.06/share down 11.05% while First Majestic Silver (AG) lost  10.22% closing at $9.31/share.

Oil prices pulled back 7.9% as it closed at $36.41/bbl. Energy leaders Chevron (CVX) closed at $89.37/share down 8.41%, Exxon (XOM) closed at $46.18/share down 8.83% & highly leveraged Occidental Petroleum Corporation (OXY) closed at $217.41/share down another 16.14% & further cooling off considerably after its recent 40% surge. 

On the macroeconomic front, the Initial jobless claims report for the week ending June 6 declined by 355k to a 1.542M & continuing claims for the week ending May 30 dropped by 339k to an eye-popping 20.929M. The Producer Price Index for final demand report rose .4% month/month in May while the index for final demand, which excluded food & energy, dropped .1% leaving the year/year rates at -.8% & .3%.

The 2-yr US treasury yield dropped 1 basis point closing at .16% & the 10-yr yield dropped 10 basis points ending at .65%. The U.S. Dollar Index strengthened by .8% to end at 96.76. 

MOVERS

Here’s a couple of other equities that moved significantly higher today:

• Shares of the Reata Pharmaceuticals (RETA) jumped 28.08% closing at $167.68/share after it was announced that funds managed by Blackstone Life Sciences will lead a $350M royalty and equity investment in Reata to fund the development and potential commercialization of bardoxolone methyl, an investigational once-daily oral therapy being studied for chronic kidney disease.

• Shares of Neubase Therapeutics (NBSE) closed at $7.99/share up 3.36% today after touching $8.07 intraday trading but still off of its recent new all-time high of $9.63/share. 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,  but it also because it may be added to a Russell index this month. Shares of NBSE closed at $7.73/share up 3.20% today but still off of its recent new all-time high of $9.63/share. Here are the following June dates for Russell indices inclusion for 2020:

  • June 12 & 19 – US index add & delete lists (reflecting any updates) posted to the FTSE Russell website after 6 PM US eastern time.
  • June 15 – “lock down” period begins – US index adds & delete lists are considered final
  • June 26 – Russell Reconstitution is final after the close of the US equity markets.
  • June 29 – equity markets open with the newly reconstituted Russell US Indexes.

TOMORROW

Tomorrow’s significant economic data report schedule will provide the following:

• The preliminary University of Michigan Index of Consumer Sentiment for June
• The Export and Import Prices for May

WATCH LIST

• Shares of INVO Bioscience (INVO) closed at $3.62/share. INVO was recently funded and saw their 1-20 reverse split take effect Tuesday, May 26. The stock is trading under the symbol INVOD until June 22nd. They now have ~7.8M shares in this newly minted low or tight float play. Expect volatility as we wait for news from the company in the near term.  Recently, The Morning Blend aired an interview on WTMJ-4 Milwaukee where Dr. Ellen Hayes, a Reproductive Endocrinologist and Infertility Specialist from Vios Fertility Institute, discussed information regarding their new research in health, pregnancy, and COVID19. Dr. Hayes also shares their research and a new offering of INVO Bioscience’s  (INVO) FDA cleared infertility treatment called INVOcell The INVOcell technology, which continues to gain worldwide recognition and adoption, provides an in-vivo incubation solution that can help increase access and capacity to the large underserved global fertility market. The INVO Procedure is a revolutionary in vivo method of vaginal incubation that offers patients a more natural and intimate experience and more cost-effective. For the rest of 2020 Vios Fertility Institute is giving a special offer for InVoCell. The offer includes retrieval, monitoring, fresh embryo transfer for $6500, it normally costs $7200, which is still significantly less expensive than traditional lab-intensive IVF. Please watch the concise interview by clicking this link now! 

• Shares of Atossa Therapeutics (ATOS) closed at $3.08/share today. ATOS has approximately 9.2M shares issued and outstanding which placed it in the low-float category and hit a $3.48 52-week high last week after touching $.76 in the market downturn in March of this year. Today Atossa, a clinical-stage biopharmaceutical company seeking to discover and develop innovative medicines in areas of significant unmet medical need with a current focus on breast cancer and COVID-19, announced that the manuscript of the results from in vitro testing of AT-H201, Atossa’s proprietary COVID-19 drug candidate, titled: “AT-H201 constituents collectively are the most potent inhibitors of SARS-CoV-2 infectivity in VERO cells identified and mechanistically act as a chemical vaccine: Human safety data support rapid clinical development as inhaled therapy for COVID-19,” S. Quay, S. Chen, J. Rea and H. L. Remmel is now available at: ResearchGate Preprint AT-H201 laboratory testing against SARS-CoV-2.      Click here to read the full story Recently, the CEO of Atossa, Physician-Scientist Dr. Steven Quay, MD, Ph.D. vowed to make his new book titled “Your COVID-19 Survival Manual: A Physician’s Guide to Keep You and Your Family Healthy During the Pandemic and Beyond,” available through his website, with proceeds supporting military veterans performing COVID-19 relief work in their communities, after the Amazon Kindle Store removed it three Days before its official launch. This 158-page eBook is chock-full of lifesaving tips you can’t find anywhere else to help you and your family stay safe while sheltering-in-place, as well as how to get back to life in the coming weeks and months. Learn how you can get your hands on it today.

Economic Reports

• On Monday, we did not receive any significant reports.
• On Tuesday, we received the NFIB Small Business Optimism Index report for May confirmed a rise to 94.9 from 90.9 in April. The April job openings report showed a decline to 5.046M from a revised 6.011M in March. The Wholesale inventories report showed a rise of .3% in April.
• On Wednesday, we received the Consumer Price Index Report for May confirmed a drop of .1% month/month while the Core CPI, excluding food & energy, also dropped by .1%. The weekly MBA Mortgage Applications Index Report showed a 9.3% move higher.
• On Thursday, we received the Initial jobless claims report for the week ending June 6 declined by 355k to a 1.542M & continuing claims for the week ending May 30 dropped by 339k to an eye-popping 20.929M. The Producer Price Index for final demand report rose .4% month/month in May while the index for final demand, which excluded food & energy, dropped .1% leaving the year/year rates at -.8% & .3%.

Investing & Inspiration

“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

Tomorrow

Tomorrow’s significant economic data report schedule will provide the following:

• The preliminary University of Michigan Index of Consumer Sentiment for June
• The Export and Import Prices for May