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Today’s Macroeconomic Stories Lift Humpday’s Markets

By John F. Heerdink, Jr.

Wednesday’s market received a couple of  “surprise” results from macroeconomic reports that lifted spirits and lifted the markets. The ISM Non-Manufacturing Index report confirmed a jump to 45.4% in May from the 41.8% in April while the ADP Employment Change Report confirmed that ~2.76M private-sector jobs were lost in May which was significantly lower than the ~9M that was expected. The New orders for manufactured goods report also met expectations dropping 13% month/month in April, so not great, but nothing more or less than was expected which the market generally likes too. All of these points led to helping shine further light at the end of the tunnel that gave investors confidence that as reopening measures push forward across the US and the world then we could see a swift recovery and maybe faster than expected.

The industrials sector was up 3.9%, the financials sector was up 3.8% & the energy sector was up 3.1% as they led the way today. The S&P 500 closed up 1.36% at 3,122.87, the Dow gained 1.05%, the Nasdaq moved up .78% while the Russell 2000 added a solid 2.39% as small caps continued to be in favor.

Powering the energy sector’s positive move today, oil prices rose another 1.3% to close at $37.56/bbl and was fueled by the reopening optimism paired with reports that weekly crude inventories decreased. Chevron (CVX) closed at $97.18/share up 2.63%, Exxon (XOM) closed at $49.24/share up by 4.08% & Occidental Petroleum Corporation (OXY) closed at $15.45/share up by a solid 4.75% or nearly 19% in the last two days. 

The popular FAANG stocks experienced an overall lackluster kind of day and ended as follows: Facebook (FB) closed at $230.16/share off 1.10%, Amazon (AMZN) closed at $2,478.40/share, up .24%,  Apple (AAPL) closed at $325.12/share up by .55%, & Netflix (NFLX) lost 1.25% closing at $421.97/share, & Alphabet (GOOG) closed at $1,436.38/share down by .20%.

The 2-yr US treasury yield moved higher by 3 basis points ending at .19% & the 10-yr yield jumped 8 basis points ending at .76%. The U.S. Dollar Index weakened by .4% to end at 97.28. 

Gold and silver took another step back today. Gold prices ended at $1,697/oz (-33) while silver prices closed at $17.77/oz (-.05). North American silver and gold producer Hecla Mining Company (HL) closed at $3.27/share down .61% while First Majestic Silver (AG) lost 3.57% closing at $9.73/share.

MOVERS

A couple of equities from the airline industry and the property management industry moved significantly as follows:

  • Shares of Boeing airplane parts supplier and recently beaten down from its 52-wk high of $92.81/share, Spirit AeroSystems Holdings Inc. (SPR), closed at $28.03/share up 21.34%. 
  • Shares of mall operator REIT Simon Property Group, Inc. (SPG) rose 14.86% today as reponing steps continue to be taken in all 50 states. 

TOMORROW

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

  • The weekly Initial and Continuing Claims report
  • The revised Q1 figures for Productivity and Unit Labor Costs
  • The Trade Balance report for April

WATCH LIST

  • Keep an eye on INVO Bioscience (INVO) which was recently funded and saw their 1-20 reverse split take effect Tuesday, May 26, and is trading under the symbol INVOD. They now have ~7.8M shares in this newly minted low or tight float play. Shares closed at $2.35/share up 5.86% and are trading tightly and with a spread that you can drive a truck through.
  • I am also looking for Atossa Therapeutics (ATOS) to possibly hit us with further news regarding their now 2 COVID-19 treatment programs as early as this week. Recently ATOS announced the successful results from in vitro testing of AT-H201, Atossa’s proprietary COVID-19 drug candidate, and are seeking IRB and FDA approval to move into the clinic. ATOS also recently announced that it has begun the development of a second COVID-19 program using its proprietary drug candidate AT-301, to be administered by nasal spray as is teaming with nasal spray specialist firm Summit Biosciences. AT-301 is Atossa’s proprietary formula intended for nasal administration in patients immediately following a diagnosis of COVID-19 but who have not yet exhibited symptoms severe enough to require hospitalization. Atossa confirmed that it is intended for at-home use to proactively reduce symptoms of COVID-19 and to slow the infection rate so that a person’s immune system can more effectively fight SARS-CoV-2 (coronavirus). Atossa also intends to conduct testing to determine whether AT-301 can be used as a prophylaxis to prevent or mitigate SARS-CoV-2, with the goal that it could become a “bridge to the vaccine” and be useful in the next phase of the coronavirus pandemic. Shares of ATOS continued to drive upwards closing $2.73/share up 8.33%. ATOS has approximately 9.2M shares issued and outstanding placing it in the low-float category and hit a $3.25 52-week high this year.

Lastly, please take a minute to read these recent stories related to COVID-19: 

All this mask “research” is great but does any of it work? YES, face masks do a great job of stopping a coronavirus and… 

Wasting Time on SARS-CoV-2 Testing and…

The beach will be a common destination this summer but is it safe with the COVID-19 pandemic?

 

Markets

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Big Movers

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Bond Markets & US Dollar

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Economic Reports

  • On Monday, we received the following reports:
    • The ISM Manufacturing Index Report for May moved up to 43.1% but still below expansion levels as reopening continues
    • The Construction spending report confirmed a decrease of 2.9% month/month in April while total residential spending was decreased by 4.5% & total nonresidential spending declined by 1.8%
  • On Tuesday, we did not receive anything of significance.
  • On Wednesday, the ISM Non-Manufacturing Index report confirmed a jump to 45.4% in May from the 41.8% in April while the ADP Employment Change Report confirmed that ~2.76M private-sector jobs were lost in May significantly lower than the ~9M that was expected. The New orders for manufactured goods report also met expectations dropping 13% month/month in April. All of these led to helping investors shine further light at the end of the tunnel that you could go brighter as reopening measures push forward across the US and world.

Agriculture & Energy

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Biotech & Healthcare

Atossa Therapeutics (ATOS), 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, recently announced the successful results from in vitro testing of AT-H201, Atossa’s proprietary COVID-19 drug candidate. The preliminary study results show that AT-H201 inhibits SARS-CoV-2 infectivity of VERO cells in a laboratory culture, which are the standard cell types being used to study the infectivity of the coronavirus. SARS-CoV-2, sometimes called the coronavirus, is the COVID-19 infectious agent. This is the first submicromolar inhibitor of SARS-CoV-2 identified to date in published literature, meaning that a relatively small amount of the drug is necessary to result in an anti-viral effect. The testing was conducted on behalf of Atossa by a leading academic research institute. Atossa plans to publish a manuscript of these test results. Successful in vitro tests do not guarantee similar results from in vivo studies, including in human clinical trials. Additional safety and efficacy studies must be successfully completed and regulatory approvals must be obtained before AT-H201 may be commercialized. AT-H201 is reportedly designed to act as a “chemical vaccine” by binding to the surface of the coronavirus and inhibiting the ability of the virus to enter a cell (“viral infectivity”). Significant findings from the testing include: AT-H201 components inhibited SARS-CoV-2 from infecting VERO cells in a laboratory culture & this is the first submicromolar inhibitor of SARS-CoV-2 identified to date in published literature, meaning that a relatively small amount of the drug is necessary to result in an anti-viral effect. Testing was also performed on Gilead Sciences’ (GILD) remdesivir, an anti-viral medication being studied by others for use in COVID-19 patients, and the generic anti-malaria drug hydroxychloroquine, which is also being studied by others in COVID-19 patients. In these laboratory tests, the components of AT-H201 were found to be at least four-times more potent than remdesivir and at least twenty-times more potent than hydroxychloroquine. Potency was measured by microscopic examination of the cytopathic effect caused by SARS-CoV-2 in VERO cells. Learn More. 

Maxim Group’s Sell-side Biotech Analyst Jason McCarthy issued an update report maintaining his BUY Rating on Atossa Therapeutics,  Inc. (NASDAQ: ATOS) with a $4/share 12-month price target. View Maxim’s report here.


 

INVO Bioscience (INVO) has made a number of moves to build out its organization while focusing its efforts to increase access to its INVOcell procedure globally. INVO’s lead product, the INVOcell®, is a patented medical device used in infertility treatment and is considered an Assisted Reproductive Technology (ART). ART includes all fertility treatments in which both eggs and embryos are handled outside of the body. In general, ART procedures involve removing mature eggs from a woman’s ovaries using a needle, combining the eggs with sperm in the laboratory, and returning the embryos to the woman’s body or donating them to another woman. The main type of ART is in vitro fertilization (IVF). INVO’s INVOcell is the first Intravaginal Culture (IVC) system in the world used for the natural in vivo incubation of eggs and sperm during fertilization and early embryo development, as an alternative to traditional In Vitro Fertilization (IVF) and Intrauterine Insemination (IUI). INVO’s mission is to increase access to care and expand fertility treatment across the globe with a goal to lower the cost of care and increase the availability of care. The Company believes the worldwide fertility treatment market to be severely underserved with only 1% to 2% of the estimated 150 million infertile couples being treated. Since January 2019, INVO Bioscience has signed commercialization agreements in the United States, as well as parts of Africa, Eurasia for the INVOcell device. On January 16, 2020, INVO and Medesole, a leading supplier of healthcare products in India and the Middle East, announced the signing of a joint venture to operate dedicated INVOcell clinics in India. According to the Indian Society of Assisted Reproduction, between 10% and 14% of Indians struggle with their fertility. In 2015, 27.5 million couples in India seeking children experienced difficulty conceiving. In urban areas, one out of six couples is impacted. According to market research, the India IVF market is expected to reach $1.45 billion by 2026, a 14.7% increase from 2019. This double-digit growth of infertility in India has made it a personal, as well as public health issue. Social stigma apart, infertility leads to tremendous financial and emotional stress for couples with the cost being a limiting factor for many couples who want to opt for this procedure. The Company further reported recently that the U.S. clinic locations which are trained to offer INVOcell have nearly tripled since their January 2019 agreement with Ferring & confirmed that each clinic location will vary in terms of implementation time and growth. Ferring has established a website, www.invocell.com, which provides information for patients and health care professionals, in addition to providing a tool to search for clinic locations that offer INVOcell. Their 1-20 reverse split took effect today and will be trading under the symbol INVOD for the next 19 days. They now have ~7.8M shares in this newly minted low or tight float play.

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Consumer Goods & Trends

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Financials & Fintech

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Materials & Natural Resources

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Technology & Beyond

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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

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Tomorrow

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

  • The weekly Initial and Continuing Claims report
  • The revised Q1 figures for Productivity and Unit Labor Costs
  • The Trade Balance report for April

Videos

Please consider viewing these interesting videos: