Vista Partners Daily Market Recap For December 30, 2019

By John F. Heerdink, Jr.

The broad markets received some economic data today, but little else came forth and the markets sold off throughout. The Pending Home Sales Report showed a +1.2% move higher in November. The Advance Report for International Trade in Goods for November also surfaced and confirmed a deficit of $63.2B Vs. $66.8B in October while the Advance Report for Retail Inventories for November dropped by -.7%, and the Advance Report for Wholesale Inventories for November was flat. News from the US-China trade war saga was relatively subdued today.

As a result, the S&P 500 ended the day at 3,221.29, -.58% as all 11 S&P 500 sectors finished in the red.

The Dow Jones Industrial Average ended at 28,6462.14, -.64%.

The Nasdaq Composite ended at 8,945.99, -.67%.

The Russell 2000 moved lower by -.29% ending at 1664.15.

The “fear gauge” Vix (TVIX) ended at $55.85/share. +7.05%.

The stock market is open for regular trading on New Year’s Eve: Tuesday, Dec. 31, 2019. However, the bond market closes early, at 2 p.m. ET. New Year’s Day is a stock market holiday. The bond market is also closed on Wednesday. Otherwise they are open during normal hours the balance of the week.

Markets

Symbol Name Last Price Change % Change

Big Movers

Shares of NIO Inc. (NIO) skyrocketed +53.72% today closing at $3.72/share. NIO is a pioneer in China’s premium electric vehicle market. Today NIO announced its unaudited financial results for the third quarter ended September 30, 2019. William Bin Li, founder, chairman, and chief executive officer of NIO stated, “NIO delivered a total of 4,799 ES8 and ES6 vehicles in the third quarter of 2019, representing a 35.1% increase from the second quarter. The electric vehicle sector experienced substantial softness in the second half of 2019 after the reduction of EV subsidies in China. Despite the challenges, NIO’s sales improved solidly since September. Our strong performance was attributable to the competitiveness of our products and services, the recognition and strong support from our user community, and our sales network expansion strategy as we continue to launch more efficient NIO Spaces. We expect over 8,000 vehicles to be delivered in the fourth quarter, a record of quarterly deliveries in our history. With that, the total aggregate deliveries in 2019 are estimated to reach over 20,300.”

Shares of Progeny (NASDAQ: PGNY), a leading benefits management company specializing in fertility and family building benefits solutions in the United States, jumped 6.40% on Friday closing at $27.95/share and legged up further today closing at $28.21. PGNY priced its J.P. Morgan, Goldman Sachs & Co. LLC and BofA Securities led IPO at $13/share on October 29th, 2019.

Symbol Name Last Price Change % Change

Bond Markets & US Dollar

Treasuries yields results were mixed today. The 2-yr yield went down two basis points to 1.56% while the 10-yr yield rose two basis points to end at 1.90%.

The U.S. Dollar Index weakened to end at 97.03, -.2%.

Symbol Name Last Price Change % Change

Economic Reports

On Monday, the total durable goods report confirmed a drop by -2% in November below the 1.5% expected rate. However, new home sales in November surprisingly rose +1.3% month/month to a seasonally adjusted annual rate of 719k units while on a year/year basis new home sales are now up +16.9%. The median new-home price jumped +7.2% to $330,800 in November.

On Tuesday investors will receive the S&P Case-Shiller Home Price Index for October, the FHFA Housing Price Index for October, and the Conference Board’s Consumer Confidence Index for December on Tuesday.

Agriculture & Energy

Oil prices closed at 61.64/bbl, -2%.

 

Symbol Name Last Price Change % Change

Biotech & Healthcare

The S&P 500 healthcare sector closed at 1184.66, -.66%.

The Ishares Nasdaq Biotechnology ETF (IBB) moved lower today closing at $120.18, -1.14%.  The 52-wk range is $95.01 – $123.74.

The NYSE Arca Biotech Index (^BTK) closed at 5,048.91, -1.15%.

Johnson & Johnson (JNJ) closed at $145.30, -.31%.

Shares of Atossa Genetics Inc. (NASDAQ: ATOS) closed at $1.60/share. Recently,  ATOS announced that it has contracted with Stockholm South General Hospital in Sweden to conduct a Phase 2 study of Atossa’s proprietary oral Endoxifen to reduce mammographic breast density (MBD) in women. The study is being led by principal investigator Per Hall, M.D., Ph.D., Head of the Department of Medical Epidemiology and Biostatistics at Karolinska Institutet. MBD is an emerging public health issue, as studies conducted by others have shown that MBD increases the risk of developing breast cancer and that reducing MBD can reduce the incidence of breast cancer. The primary endpoint of the new Phase 2 study is to determine whether oral Endoxifen administration results in an individual change in MBD, which will be measured after three and six months of treatment. The secondary endpoints are safety and tolerability. Assuming the institutional review board (IRB) approves the study, enrollment is expected to open in the first quarter of 2020.

Steve Quay, M.D., Ph.D., President and CEO of Atossa stated, “Atossa’s primary strategic objective is to develop oral Endoxifen to reduce MBD and this Phase 2 study is a major milestone in advancing this objective. Dr. Hall and his clinic are uniquely qualified to lead this study as they recently successfully completed the Phase 2 study of our topical Endoxifen, which demonstrated MBD reduction and they have conducted numerous studies using tamoxifen in both the treatment and prevention setting.”

Maxim Group’s Analyst Jason McCarthy recently issued an update report upgrading ATOS shares to a Buy with a $4/share 12-month price target, stating that the company is “ready to advance its modified-release oral tablet of endoxifen to a P2 study for the treatment of mammographic breast density (MBD).”

INVO Bioscience, Inc. (IVOB) is a medical device company focused on creating alternative treatments for patients diagnosed with infertility and developers of INVOcell®, the world’s only in vivo Intravaginal Culture System, & recently announced that it has entered into commercialization agreements to distribute the revolutionary INVOcell system across many parts of the world including the continent of Africa, covering Nigeria, Uganda, Sudan, and Ethiopia, as well as in Europe (Turkey & Jordan) & the US.

Steve Shum (pictured above), Chief Executive Officer of INVO Bioscience, commented recently, “We are excited with the progress being made to drive revenue growth domestically through our U.S. commercialization agreement with Ferring and now in other parts of the world with the recent signing of new commercial distribution agreements for Nigeria, Turkey, Jordan, Uganda, Ethiopia, and Sudan. We believe there is an incredible opportunity to drive the adoption of the INVOcell over the coming years through the creation of commercialization agreements with partners. We will remain diligent to find partners that are incentivized to support the product through minimum purchase requirements or similar arrangements. Our agreement with Ferring for the U.S. and our recent agreements for Africa and Eurasia are great templates to continue working from and we look forward to further agreements announced in the future. Other near-term objectives include the initiation of our follow-on clinical study for the INVOcell device to expand S current label from a 3-day incubation period to a 5-day incubation period. As part of the Ferring agreement, if we achieve 5-day labeling approval from the FDA, we receive an additional $3 million non-dilutive milestone payment. In addition to the milestone payment, the new study will allow us to update our clinical data which we believe will allow us to show improved clinical pregnancy and birth rates and further enhance the value proposition we can provide to the market as an alternative to traditional IVF. Our technology is a simple and more natural solution, with comparable rates of effectiveness to existing options at lower costs, that has been designed to help the millions of couples worldwide that struggle with infertility but are currently unable to receive treatment. We are beginning to put in place the commercialization strategy that can allow for the proliferation of this technology which I believe has the ability to significantly enhance shareholder value.”

Symbol Name Last Price Change % Change

Consumer Goods & Trends

Shares of Nike (NKE) closed at $100.80/share, -.76% today.

Shares of Disney (DIS) closed at $143.77/share, -1.36%.

The S&P 500 consumer discretionary sector closed up +1.5% over the course of the week and was the best performing sector.

Symbol Name Last Price Change % Change

Financials & Fintech

Visa (V) closed trading at $187.83/share, -.82% on Friday. Recently, Visa and the pan-African fintech leader MFS Africa announced a partnership that will help bridge the gap between the rapidly growing mobile money ecosystem in Africa and the world of online digital payments, significantly expanding Visa’s reach and its ability to open up commerce to the region.

According to Reuters and many sources at this time the shared workplace operator WeWork said on Tuesday that it has arranged a $1.75B letter of credit with Goldman Sachs (GS, $230.66/share, -.24%) that is in the process of being syndicated and whose funds are expected to be available in January.

Symbol Name Last Price Change % Change

Materials & Natural Resources

 

Gold prices closed at $1,526.50/0z, +.52%.

Silver closed lower at $18.19/oz, 1.02%.

First Majestic Silver (AG) closed at $12.41/share, +4.37%. AG recently reported their Q3 2019 earnings where their CEO Keith Neumeyer highlighted that they added $21.4 M to their treasury during the quarter as a result of strong production from San Dimas and Santa Elana mines.

Hecla Mining Company (HL) closed at $3.38/share, +2.11% after reaching a new 52-wk high of $3.51 last week. On Tuesday, Dec. 16th, HL reported that the union workers have voted not to ratify the Tentative Agreement reached by the USW and Hecla negotiating committees. The Company is committed to bringing the mine back to full production and is increasing the hiring of employees and contractors. “For much of 2019 we have employed a number of hourly workers who, combined with our salaried workforce, have operated the Lucky Friday on a limited basis,” said Phillips S. Baker, Jr., President and CEO. “We will now accelerate hiring and utilizing contractors with the goal of reaching full production by year-end 2020. While we would have preferred ratification of the agreement reached by the two negotiating committees, after three years of negotiating we believe the best interests of the company and community is the Lucky Friday in full operation. The mine has operated for 75 years, and we believe its best days with projected higher grades and more cash flow, are in front of it. I want to acknowledge the existing salaried and hourly staff at the Lucky Friday, who kept the mine operating during the strike and in doing so have helped minimize the financial impact. But most importantly, they have operated in a very safe manner, and were recognized for their efforts by receiving the highest mine safety award in the United States, the Sentinels of Safety from the National Mining Association, earlier this fall.”

Symbol Name Last Price Change % Change

Technology & Beyond

The FAANG stocks closed as follows:

  • Facebook (FB) $204.41/share, -1.77%
  • Amazon (AMZN) $1846.890/share, -1.23%
  • Apple, Inc. (AAPL) closed at $291.52/share, +.59%, recently set a new 52-wk high of $293.97/share in intraday trading
  • Netflix (NFLX) $323.31/share, -1.76%,
  • Alphabet (GOOG) $1336.14/share, -1.17%
Symbol Name Last Price Change % Change

Investing & Inspiration

 

“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

Symbol Name Last Price Change % Change

Tomorrow

On Tuesday investors will receive the following significant economic data:

  • S&P Case-Shiller Home Price Index for October
  • The FHFA Housing Price Index for October
  • The Conference Board’s Consumer Confidence Index for December

The stock market is open for regular trading on New Year’s Eve: Tuesday, Dec. 31, 2019. However, the bond market closes early, at 2 p.m. ET. New Year’s Day is a stock market holiday. The bond market is also closed on Wednesday. Otherwise they are open during normal hours the balance of the week.

Here are three trading ideas to check out tomorrow that is not for the faint of heart:

  • Acorda Therapeutics (ACOR) which closed at $2.19/share, -16.41% but recently announced a $276M exchange of convertible senior debt that moved maturity out to in 2024.
  •  Aduro Biotech, Inc. (ADRO) whih closed at $1.19/share today and has interesting data points due in 1st half 2020.
  • Molecular Data INC. (MKD) which is bouncing around post its IPO today ($5.38/share, ~$61.87M raise) closing at $5.46/share, +1.49% after hitting an intraday high of $11.90/share.

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