Q2 GDP Tanks, Job Claims Rise, Markets Capitulate Ahead Of AAPL, AMZN, FB, & Alphabet Earnings Reports

The markets ended somewhat mixed today as investors were served with somewhat negative but also expected data from the macroeconomic schedule. This came in the face of impending after the market earnings reports from no less than four of the FAANG stocks, Apple (AAPL), Amazon (AMZN), Alphabet (GOOG) & Facebook (FB), which so many investors hold so dearly and funds definitively hold widely.

First off today and setting the unsettling tone in the markets was the Q2 GDP report which confirmed a drop by an annualized rate of 32.9%. The GDP Price Deflator also fell by 1.8%. Both were somewhat expected as it represented the results coronavirus shutdown. The Initial claims report for the week ending July 25 also confirmed a rise by 12k to 1.434M while the continuing claims report for the week ending July 18 jumped by a sizable 867k to 17.018M showing further evidence of slow recovery. 

In reaction, the Dow 30 closed at 26313.65 down .85%. The S&P 500 fell .38% closing at 3,246.22 as the information technology sector moved up .5% & the communication services sector bumped up .3% to lead all sectors while the energy sector dropped 4.1%.

The NASDAQ eked out a win today as it closed at 10,587,81 up .43%. The heavily weighted and widely followed FAANG stocks ended as follows: Facebook (FB) closed at $234.50/share up .52%, Amazon (AMZN) closed at $3,051.88/share up .6%, Apple (AAPL) closed at $384.76/share up 1.21%, Netflix (NFLX) lgained .27% closing at $485.80/share & Alphabet (GOOG) closed at $1,531.45/share up .62%. 

The little guys on the Russell 2000 closed at 1,495.10 losing .37%.

Gold closed dropped to close at $1,956(-13) while silver prices pulled back to close at $23.58/oz (-.82). With the dollar continuing to drift lower the rising trends of gold and silver seems to have legs. North American silver and gold producer Hecla Mining Company (HL) closed at $5.35/share -3.08% after establishing another new 52-week high of $5.68/share intraday trading this week. HL’s 52-week low is $1.38.  North American silver producer First Majestic Silver (AG) closed at $12.97/share down 5,74% after establishing a new 52-week high of $14.50 this week.

The energy sector dropped a sizable 4.1 % today as 0il prices fell 3.2% closing back below the $40 level at $39,97/bbl. A few energy leaders closed as follows: Chevron (CVX) closed at $86.27/share down 4.22%, Exxon (XOM) closed at $41.87/share down 4.91% & highly leveraged Occidental Petroleum Corporation (OXY) closed at $15.77/share down 7.4%. Midstream player, Enterprise Products Partners (EPD), closed trading at $17.62/share down 2.3% and is currently sporting an attractive $1.78/share dividend or 9.63% while USA Corporation Partners, LP. (USAC), one of the nation’s largest independent providers of natural gas compression services, closed at $11.83/share down .96% while offering a $2.10/share (17.05%) dividend.

The 2-yr US treasury yield closed down 2 basis points at .11% while the 10-yr yield ended dropped four basis points to close at .54%. The U.S. Dollar Index weakened by .5% to end at 92.98. 

Here’s a number of other equities that moved significantly higher today along with our stocks in view and what to expect from the macroeconomic schedule:

AMAZING MOVERS

• Shares of TransEnterix (TRXC) closed trading at $.5124/share up another 11.61% today after rising to a $.5369 intraday trading or nearly 20% on 15.67M shares of trading. 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/. This week, 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.

• Shares of QUALCOMM Incorporated (QCOM) rose 15.22% today closing at $107.19/share as their earnings beat and a $1.8B Huawei License settlement deal.

• Shares of Overstock.com (OSTK) jumped 25.44% closing at $76.19/share today on an earnings beat as it reported that net revenue rose to $783M, an increase of 109% YOY!

TOMORROW

Apple (AAPL), Amazon (AMZN), Alphabet (GOOG) & Facebook (FB) all reported after the close today beating Wall Street expectations and are trading up across the board in the aftermarkets. AAPL announced a 4-1 stock split to boot!

The macroeconomic calendar will deliver the following point:

• The Personal Income and Spending report for June
• The Chicago PMI for July
• The Q2 Employment Cost Index
• The revised University of Michigan Index of Consumer Sentiment for July

WATCH LIST

• Atossa Therapeutics (NASDAQ: ATOS) closed at $3.96/share down 8.97% after reaching an intraday high of $4.87 and a new 52-wk high. 

• • 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 $4.69/share.

  • Today, July 30th, Atossa’s CEO, Dr. Steven Quay, M.D., Ph.D., presented at Tribe Public’s Zoom Webinar Presentation and During this complimentary, 30-minute event, Dr. Quay presented followed by a Q&A session regarding Atossa’s breast cancer development programs and recent progress with its two COVID-19 treatment programs. To view the presentation and to join future complimentary events please visit the Tribe Public LLC website to register: www.tribepublic.com, or send a message to Tribe’s management at research@tribepublic.com to request your seat at future events.

• • Today, ATOS announced interim findings following 18 months of an Expanded Access (or “compassionate use”) single-patient study of Atossa’s Endoxifen. To date, the patient has not had a recurrence of breast cancer, as assessed by clinical breast examination and mammography; has not had treatment-related changes in periodic laboratory blood tests and general clinical examinations; and the treatment has been well-tolerated, including an absence of typically seen vasomotor symptoms (for example, night sweats and hot flashes). The study results show that treatment with Atossa’s proprietary Endoxifen for 20 days prior to unilateral mastectomy and for 18 months after surgery as an adjuvant did not lead to vasomotor symptoms commonly associated with tamoxifen, an FDA-approved drug frequently prescribed for breast cancer treatment. Endoxifen did not cause other safety and tolerability concerns in this patient. The percentage of cells expressing ER+ or Ki-67 decreased from the initial biopsy to the biopsy on the day of surgery (a 50% reduction in the case of Ki-67 and a 22% decrease in ER+ cells); plasma Endoxifen reached the potential therapeutic level (= 35 nM) by day 6, and steady-state Endoxifen was maintained through day 20 prior to surgery. Atossa plans to publish a manuscript of the case study.

• • Recently, The Maxim Group’s Analyst Jason McCarthy, Ph.D. updated his research on Atossa Therapeutics stating “Factoring in COVID-19 Candidates, awaiting HOPE Study Initiation as Pandemic Continues – Raising Price Target to $8 from $4″.

• • Recently, Atossa announced that it has contracted with Avance Clinical Pty Ltd to conduct a clinical study of Atossa’s proprietary drug candidate AT-301, to be administered by nasal spray. Avance is a leading Australian clinical research organization and has successfully completed multiple clinical studies of Atossa’s proprietary Endoxifen.

• • Recently, ATOS reported successful results from in vitro testing of AT-301, Atossa’s proprietary COVID-19 nasal spray drug candidate. The preliminary study results show that AT-301 inhibits SARS-CoV-2 infectivity of VERO cells in a laboratory culture, which is the standard disease model used for the initial screening of COVID-19 drug candidates. AT-301 is being developed with a nasal spray delivery mechanism because many COVID-19 patients are infected via the nasal passage. Collectively, the components of AT-301 are believed to help maintain a protective mucosal like layer within the nasal cavity with both anti-viral properties and protective mucosal like barrier that may lead to lower infectivity and reduced symptoms in COVID-19 patients due to their interference with the spike protein of the virus in the nasal cavity and upper respiratory tract. Atossa’s nasal spray formulation AT-301 is being designed to contain ingredients that can potentially block SARS-CoV-2 viral entry gene proteins in nasal epithelial cells by interfering with spike protein activation by host proteases, by masking receptor binding domains (RBD) via electrostatic mechanisms, and by providing a generalized mucoadhesive epithelial barrier.

• • Dr. Quay has also recently published the following book “Your COVID-19 Survival Manual: A Physician’s Guide to Keep You and Your Family Healthy During the Pandemic and Beyond,” in paperback and eBook format on his website, www.DrQuay.com. Proceeds from the book will go to military veterans performing COVID-19 relief work in their communities.  You may order it here.

• • 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 $31.60/share up 2.66%. 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

  • Fate will host a conference call and live audio webcast on Wednesday, August 5, 2020, at 5:30 p.m. ET to report its second-quarter 2020 financial results and provide a corporate update. In order to participate in the conference call, please dial 877-303-6235 (domestic) or 631-291-4837 (international) and refer to conference ID 8295527. The live webcast can be accessed under “Events & Presentations” in the Investors and Media section of the Company’s website at www.fatetherapeutics.com.

  • 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 $7.95/share up 9.66% today after 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.

  • NBSE was added to the Russell 3000 recently.

• Shares of Aduro (ADRO) closed at $2.86/share today up 3.25% as their upward sloping chart over the past month continues to look good.

• • 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”.

• • Recently, ADRO announced that the first patient with IgA nephropathy has been dosed in a Phase 1 clinical trial of BION-1301, an investigational humanized IgG4 monoclonal antibody that blocks APRIL binding to both the BCMA and TACI receptors. “We are thrilled to have dosed the first patient with IgA nephropathy in the Phase 1 clinical study of our investigational anti-APRIL antibody, BION-1301,” said Dimitry S.A. Nuyten, M.D., Ph.D., chief medical officer of Aduro. “The data Aduro recently presented from Parts 1 and 2 of this study in healthy volunteers at the 57th ERA-EDTA Virtual Congress 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 look forward to hopefully replicating this effect in addition to exploring BION-1301’s disease-modifying potential in patients with IgA nephropathy in Part 3 of the ongoing Phase 1 clinical study.”

• Shares of INVO Bioscience (INVO) closed at $3.95/share down 7.06% after reaching an intraday high of $4.25/share as interest and the daily trading volume begins to rise in this “tiny” float stock.

• • 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. 

• • Last week, INVO announced that it took a key step forward as they have received product registration approval for INVOcell in Turkey, paving the way for commercialization efforts to begin in the country. “We are pleased to have achieved this important registration approval for Turkey which enables our distribution partner, Orcan Medical, to now begin commercialization efforts in the country. Similar to other regions around the world, the people of Turkey are faced with increased infertility rates and challenges to receiving treatment, including access to care and the cost of treatment. As the world’s only Intravaginal Culture System, INVOcell, a streamlined treatment solution, is uniquely positioned to address the challenges within the infertility industry,” stated Steve Shum, CEO of INVO Bioscience. READ the rest of the story.

  • I am expecting to see the company push forward with new market supportive initiatives as they have recently been fueled up by financing that may result in further adoption in the US clinics and establishing new joint ventures, partners, and distributors throughout the world.

  • During the period from Q4, 2019 to Q1 2020, after Steve Shum became the new CEO of INVO Bioscience, INVO signed up 6 distributors and/or Joint Venture relationships in the following countries: Turkey, Jordan, India, Nigeria, Ethiopia, Sudan, & Uganda. Per recent discussions with Steve Shum, the registration process in countries is typically in the 6-month range. As evidenced today INVO is making progress per the successful registration approval in Turkey that it is reasonable to assume that they may be making progress along the same lines in the other 5 countries signed during that period. I am also expecting the company to give us some updates on other countries that could be added to their growing distribution network.

• Shares of TransEnterix (TRXC) closed trading at $.5124/share up another 11.61% today after rising to a $.5369 intraday trading or nearly 20% on 15.67M shares of trading.

• • 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/

• • This week, 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 Monday, 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 total durable goods orders report which confirmed that business spending increased in June by 7.3% month/month & when you excluded transportation, orders rose nicely by 3.3%.
• On Tuesday, we received the Conference Board’s Consumer Confidence Index report which confirmed a drop to 92.6 in July as COVID-19 case growth was confirmed in concert with the slowed reopenings, and on the other side of the coin, the S&P Case-Shiller Home Price Index report for May confirmed a nice rise by 3.7%.
• On Wednesday, we received the US pending home sales report which confirmed a sizable 16.6% jump in June on the backside of the massive 44.3% rebound in May. There was also confirmation from the advance international trade in goods report which showed a lower deficit that totaled $70.6B in June ($75.3B in May.) The advance retail inventories report however showed a 2.6% drop in June while the advance wholesale inventories report dropped 2% in June. Finally, the weekly MBA Mortgage Applications Index report confirmed a .8% drop.
• On Thursday, the Q2 GDP report confirmed a drop by an annualized rate of 32.9%. The GDP Price Deflator also fell by 1.8%. Both were somewhat expected as it represented the results coronavirus shutdown. The Initial claims report for the week ending July 25 also confirmed a rise by 12k to 1.434M while the continuing claims report for the week ending July 18 jumped by a sizable 867k to 17.018M showing further evidence of slow recovery. 

Investing & Inspiration

“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