May 4th’s Markets Ended In Positive Fashion With The Energy Sector Leading the Pack

We now have seen more than 3.57M confirmed cases of COVID-19 in the world with 1.16M cases that have recovered and more than 251k worldwide deaths. In the US, we have 1.21M confirmed cases with 160k that have recovered with 69,430 deaths and counting and we still do not have a reliable treatment, but we did pick up some help as the FDA granted emergency use authorization (EUA) for Gilead’s (GILD) investigational antiviral remdesivir to treat COVID-19. The EUA will facilitate broader use of remdesivir to treat hospitalized patients with severe COVID-19 disease, enabling access to remdesivir at additional hospitals across the country. Allocation of the currently limited available supply of remdesivir will be made based on guiding principles that aim to maximize access for appropriate patients in urgent need of treatment, with direction from and in collaboration with the government. Hopefully, this treatment will show further benefit, and others will surface as we move forward to try to find a vaccine, and as many more areas of the US and abroad seek to reopen our respective economies. 

On the macroeconomic front, we received the Factory Orders report which confirmed, and at no real surprise with the shutdown in full swing, we saw a decrease of 10.3% month/month in March.  We also received the news that the J.Crew Group, the operator of household names J.Crew & Madewell brands (denim), had become the US national retailer to file for bankruptcy protection since the COVID-19 pandemic took hold and forced the shutdown if its stores, etc. Madewell had been planning for an IPO this year.

With this in mind and not much to cheer about over our contained weekends with Warren Buffett stating (during his Berkshire Hathaway’s annual shareholder meeting Saturday) that his company exited its stakes in four of the largest U.S. air carriers American (AAL), United (UAL), Delta (DAL) & Southwest (LUV), the markets started in negative territory today and remained there for most of the day until advancing into positive territory at the end. The S&P 500 closed up by +.42% as the energy sector ended up +3.7% leading all sectors and fueled by oil prices which rebounded again today rising another +3% closing at $20.37/bbl. Chevron (CVX) closed at $91/44/shareup by +2.24%, Exxon (XOM) closed at $44.88/share up by +4.03% & Occidental Petroleum Corporation (OXY) closed at $15.52/share up by +1.84%.  The Dow rose by .11%. The Nasdaq added a solid +1.23% led by the information technology sector’s +1.4% move as the popular FAANG stocks charged forward today. Facebook (FB) closed at $205.261/share, up by +1.48%, Amazon (AMZN) closed at $2,315.99/share, up by +1.31%,  Apple (AAPL) closed at $293.16/share up by +1.41%, & Netflix (NFLX) increased by +3.10% closing $428.15/share, & Alphabet (GOOG) closed at $1,326.80/share up by +.47%. The Russell 2000 added +.28%.

The 2-yr US treasury yield dropped by 3 basis points to .17% & the 10-yr yield dropped equally by 1 basis point to end at .64%. The U.S. Dollar Index strengthened by +.5% to end at 99.54. Gold prices ended higher again today at $1,708/oz (+1) while silver prices closed at $14.98/oz (.01). North American silver and gold producer Hecla Mining Company (HL) bumped up +.37% to end the day at $2.71/share.

MOVERS

• Shares of Neubase Therapeutics (NBSE) closed at $8.08/share up 5.35% today. Form 4’s surfaced at sec.gov today confirming recent insider buying. NeuBase is a preclinical-stage biotechnology company focused on developing next-generation therapies to treat rare genetic diseases caused by mutant genes. Last week, Neubase announced that they had closed an underwritten public offering of 6,037,500 shares of its common stock (inclusive of 787,500 shares that were sold pursuant to the underwriters’ full exercise of their option to purchase additional shares of NeuBase’s common stock), at a price to the public of $6.00 per share. The net proceeds to NeuBase from the offering are expected to be approximately $33.3 million, after deducting the underwriting discounts and commissions and other estimated offering expenses payable by NeuBase. NeuBase intends to use the net proceeds from this offering for working capital and general corporate purposes and to advance the development of its product candidates and expand its pipeline. Oppenheimer & Co. Inc. and BTIG acted as the joint book-running managers for the offering, and Chardan and National Securities Corporation, a wholly-owned subsidiary of National Holdings, Inc. (Nasdaq: NHLD), acted as the co-managers. 

• Shares of Allogene Therapeutics (ALLO) closed up +11.35% at $31.68/share. South San Francisco/Paris-based Allogene is a clinical-stage biotechnology company pioneering the development of allogeneic CAR T (AlloCAR T™) therapies for cancer. On April 29th they announced that in collaboration with its development partner Servier, an independent international pharmaceutical company, they will have an oral presentation at the American Society of Clinical Oncology (ASCO) annual meeting being held virtually May 29 – May 31, 2020. This will be the first presentation of data from Allogene’s dose-escalation Phase 1 ALPHA study of ALLO-501 in relapsed/refractory non-Hodgkin lymphoma (NHL). This study utilizes ALLO-647, Allogene’s anti-CD52 monoclonal antibody (mAb) as a part of its differentiated lymphodepletion regimen. Allogene is the sponsor of this Phase 1 trial which is designed to assess the safety and tolerability at increasing dose levels of ALLO-501 and ALLO-647 in the most common NHL subtypes of relapsed/refractory diffuse large B-cell lymphoma or follicular lymphoma.

LATE IN THE DAY

My home state of California’s Governor Newsom announced that our state’s stay-at-home measures would be lifted as early as Friday. 

TOMORROW (Tuesday)

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

• The ISM Non-Manufacturing Index for April
• The Trade Balance report for March

Stock Futures are up in as currently with oil extending the previous four days of positive moves on and now above $22/bbl.

Economic Reports

• On Monday, we received the Factory Orders report which confirmed, and at no real surprise with the shutdown in full power, we saw a decrease of 10.3% month/month in March.

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 include the following:

• The ISM Non-Manufacturing Index for April
• The Trade Balance report for March