“Oil Surges On Truce As Broad Markets Bounce” – Vista’s Daily – April 2, 2020

April 2nd proved to be quite a different story as we saw the markets bounce even though the number of worldwide coronavirus cases was reported to have exceeded 1 million.  The S&P 500 closed up +2.28% with the energy sector up by +9.1% & the utilities sector up by 3.2% leading the way.  Oil prices led the energy sector north as they surged to $25.18/bbl up +23.9% at the close of trading. Oil prices reacted to talks of a truce in the Saudi Arabia, Russia, & U.S. negotiations that may result in a cut of oil production by ~10 million barrels per day. It seems that my thoughts in yesterday’s daily letter proved to be correct in that the price of oil and of the oil-related stocks were unnaturally depressed and would not persist. Chevron (CVX) closed at $76.12/share up +11.03% & Exxon (XOM) closed at $40.40/share up +7.65%. The Dow rose by +2.24%, the Nasdaq gained +1.72% & the Russell 2000 added back +1.29%.

The FAANG stocks’ results were mostly up or at least stabilzed today. Facebook (FB) closed at $158.19/share, losing -.88%, Amazon (AMZN) closed at $1,918.83/share, up by +.58%, Apple (AAPL) closed at $244.93/share gaining +1.67%, Netflix (NFLX) added +1.65% closing $370.08/share, & Alphabet (GOOG) closed at $1,120.84/share, up ny +1.38%.

The 2-yr yield rose by 1 basis points to .23% & the 10-yr yield moved lower by 1 basis points to .63%. The U.S. Dollar Index strengthened +.5% to 100.19.  

Gold prices closed higher at 1,623/oz, silver prices rose to $134.52/oz up $.53/oz.

On Thursday, we received a couple of economic reports. For the week ending March 28, the initial claims report confirmed a jump to a seasonally adjusted 6.648 million while continuing claims for the week ending March 21 jumped to 3.029 million. However, the trade deficit narrowed to $45.3 billion in January. Factory orders were flat month/month in February & shipments decreased -.2% month/month in February.

Fate Therapeutics, Inc. (NASDAQ: FATE), a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders, announced today a global collaboration and option agreement with Janssen Biotech, Inc. (Janssen), one of the Janssen Pharmaceutical Companies of Johnson & Johnson. Under the multi-year collaboration agreement, Janssen will contribute proprietary antigen-binding domains for up to four tumor-associated antigen targets. The Company will apply its iPSC product platform to research and preclinically develop new iPSC-derived chimeric antigen receptor (CAR) NK and CAR T-cell product candidates. The Company will receive $50 million in cash and $50 million from the purchase by Johnson & Johnson Innovation – JJDC, Inc. of newly issued shares of the Company’s common stock at a price per share of $31.00. Janssen will also reimburse the Company for all activities conducted under the collaboration. The collaboration leverages FATE’s iPSC product platform and Janssen’s proprietary tumor-targeting antigen binders to create novel CAR NK and CAR T-Cell product candidates. FATE is eligible to receive payments of up to $1.8 billion in development and regulatory milestones and up to $1.2 billion in commercial milestone payments, plus double-digit royalties. 

Atossa Therapeutics (ATOS) today announced recent its progress with its Phase 2 study administering oral Endoxifen in the “window of opportunity” between diagnosis of breast cancer and surgery, as well as the company’s proposed Phase 2 clinical trial to reduce mammographic breast density (MBD).

Updates on the company’s “window of opportunity” (WOO) Phase 2 trial include:

• Completed treating a sufficient number of patients to permit an initial report of study results from the pilot portion of the study.
• Contracted with Avance Clinical to open a second site for the study in Geelong, Victoria, Australia, with the goal of increasing the rate of enrollment.
• Applied to the Institutional Review Board for approval to open the second site in Geelong, Australia.
• Manufactured sufficient Endoxifen necessary for all patients expected to enroll in this study.

Updates on the company’s planned Phase 2 trial to reduce MBD include:

• In February 2020, we applied with the Swedish regulatory authorities (the MPA and IRB) for approval to begin our Phase 2 clinical study of our oral Endoxifen to reduce MBD. The MPA provided questions about our application, as is typical, and we will be addressing those questions over the coming weeks. Because of the outbreak of COVID-19, health facilities in Sweden are not currently providing screening mammograms. As a practical matter, we cannot begin enrolling patients until screening mammograms recommence in Stockholm. We plan to begin this study as soon as we receive approval from the Swedish regulatory authorities and screening mammograms recommence.
• The company has manufactured all of the drug necessary for three months of dosing for the first 90 patients to be enrolled in the planned Phase 2 study.

Additionally, Atossa submitted materials to the FDA in advance of its scheduled April 30 meeting and has confirmed at least three years of stability data on its proprietary Endoxifen.

Please remember to keep up your hope, practice social distancing, and continue to stay informed and stay competitive with Vista Partners daily and otherwise and we will get through this. 

Economic Reports

On Monday, we received the Pending Home Sales report surfaced and it confirmed a rise by +2.4% in February.

On Tuesday, we received the Conference Board’s Consumer Confidence Index Report for March which confirmed a decrease to 120, while the Chicago PMI decreased to 47.8 in March & the S&P Case-Shiller Home Price Index Report for January confirmed a rise by +3.1%.

On Wednesday, we received the ISM Manufacturing Index Report for March which clocked in a reading of 49.1% slightly below the Mendoza line for expansion. The Total construction spending report confirmed a drop by -1.3% month/month in February while the Residential spending report confirmed a decrease by -.6% month/month & nonresidential spending dropped by -1.6% month/month. The ADP Employment Change report confirmed a net loss of 27k nonfarm payrolls in March. The weekly MBA Mortgage Applications Index isurged+15.3%.

On Thursday, we received a couple of economic reports. For the week ending March 28, the initial claims report confirmed a jump to a seasonally adjusted 6.648 million while continuing claims for the week ending March 21 jumped to 3.029 million. However, the trade deficit narrowed to $45.3 billion in January. Factory orders were flat month/month in February & shipments decreased -.2% month/month in February.

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 Employment Situation Report for March
• The ISM Non-Manufacturing Index for March