Vista Partners’ Friday Weekly Market Wrap For January 10, 2020

By John F. Heerdink, Jr.

The broad markets moved higher this week as ongoing surface tensions eased between the US and the Middle East.  Technology stocks led the way as the S&P 500 information technology sector jumped +2.2% & the communication services sector rose +2.0%.

The FAANG stocks closed as follows on Friday:

  • Facebook (FB) $218.06/share, -.11% ($208.67/share a week ago)
  • Amazon (AMZN) $1883.16/share, -.94% ($1874.97/share a week ago)
  • Apple, Inc. (AAPL) closed at $310.33/share, +.23% after hitting a new all-time high of $312.67/share today ($297.43/share a week ago)
  • Netflix (NFLX) $329.05/share, -1.97%, ($325.90/share a week ago)
  • Alphabet (GOOG) $1429.73/share, +.70%, ($1360.66/share a week ago)


As a result, the S&P 500 ended the day at 3,265.35, representing a +.9% weekly increase and now up +1.1 % YTD. The Dow Jones Industrial Average ended at 28,910.18 representing a +1% weekly increase and now up +1% YTD. The Nasdaq Composite closed at 9,178.86 on Friday, realizing a weekly +1.8% advance and up 2.3% YTD. The Russell 2000 moved lower by -.44% at the close of trading Friday at 1657.64 representing a weekly -.2% decline leaving it down -.6% YTD. The “fear gauge” Vix (TVIX) ended at $44.5/share down -1.02% today & down from $51.88/share last Friday’s close.

Markets

Symbol Name Last Price Change % Change

Big Movers

Shares of Acorda Therapeutics (ACOR) which closed at $2.36/share up from the $1.96/share last Friday & rose as high as $2.77/share this week. Recently ACOR announced a $276M exchange of convertible senior debt that moved maturity out to 2024.

Shares of plant-based burger provider Beyond Meat, Inc. (BYND) jumped +10.76% to close at $90.25/share yesterday and then legged up another +6.45% Friday to close the week at $96.07/share. The 52-wk range is $45 – $239.71. recently, it was revealed that McDonald’s (MCD) is expanding its test while ending it with its competitor Impossible Foods.

Shares of Nektar Therapeutics (NKTR) closed at $26.92/share trading up +24.69% today after NKTR and Bristol-Myers Squibb Company (NYSE: BMY) announced today that the companies have agreed to a new joint development plan to advance bempegaldesleukin (bempeg) plus Opdivo (nivolumab) into multiple new registrational trials. View the full release here: https://www.businesswire.com/news/home/20200110005103/en/

 

Symbol Name Last Price Change % Change

Bond Markets & US Dollar

Treasuries yields moved lower over the course of the week. The 2-yr yield went down 7 basis points to 1.51% while the 10-yr yield went down eight basis points to end at 1.79%.

The U.S. Dollar Index weakened over the course of the week from 97.03 to end at 96.06.

Symbol Name Last Price Change % Change

Economic Reports

We did not receive any significant economic data Monday.

On Tuesday, the ISM Non-Manufacturing Index Report for December confirmed a 55% reading (an increase) while the Factory Orders Report showed a decrease by -.7% month/month in November as Shipments rose +.3%. The trade deficit tightened to $43.1B in November.

On Wednesday, The ADP Employment Change Report confirmed that ~202k positions were added to private-sector payrolls in December.  The Consumer credit report also rose by $12.5B in November.

On Thursday, the initial jobless claims report for the week ending January 4 showed a move down by 9k to 214k while continuing claims for the week ending December 28 rose by 75k to 1.803M.

On Friday, the December nonfarm payrolls report confirmed a rise increased by 145k while private sector payrolls increased by 139k & the unemployment rate came in at 3.5%. Average hourly earnings moved higher by +.1%. Wholesale inventories went down by -.1% month/month in November while wholesale sales jumped +1.5%.

Agriculture & Energy

Oil prices oil declined -6.2% on the week (down -3.1% YTD) closing at 59.14/bbl up from $63.03/bbl as tensions eased in the middle east and the fear of disruption subsided. The question is when will OPEC decide to suggest they will be cutting further production or when will another world crisis rear its ugly head again in the middle east? 

Symbol Name Last Price Change % Change

Biotech & Healthcare

The S&P 500 healthcare sector closed at 1198.13 up from 1180.33 last Friday.

The Ishares Nasdaq Biotechnology ETF (IBB) moved higher this week closing at $120.45 vs. last Friday’s close of $118.36. The 52-wk range is $96.03 – $123.74.

The NYSE Arca Biotech Index (^BTK) closed at5,200.73 up from the 4,985.19 level last week.

Johnson & Johnson (JNJ) closed at $145.06/share up from $144.28/share last Friday.

Shares of Atossa Therapeutics,  Inc. (NASDAQ: ATOS) closed at $1.55/share. ATOS recently announced that its corporate name change from “Atossa Genetics Inc.” to “Atossa Therapeutics, Inc.” became effective at 12:01 a.m. ET today, January 6, 2020. The Company’s common stock will continue to trade on the NasdaqCM exchange under the ticker symbol “ATOS.”

“Over the last several years, we have transitioned the Company’s focus on developing therapies to treat breast cancer, breast density and other breast conditions,” said Steve Quay, Ph.D., M.D., president and CEO of Atossa. “Changing our name to Atossa Therapeutics, Inc. more clearly reflects our focus on developing therapies and continues to honor Princess Atossa, the great queen of the Achaemenid Empire, who reigned in the fifth century BCE and who is the earliest recorded woman with breast cancer. She is featured in the The Emperor of All Maladies: A Biography of Cancer, the Pulitzer Prize-winning book by Siddhartha Mukherjee on the history of cancer.”

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.

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 Coca-Cola (KO) closed at $55.53/share,+34%  after being upgraded. Warren Buffett must be happy.

Shares of Disney (DIS) closed at $144.62/share, -.15%. Recently, Rosenblatt Securities stated that they expect 20% more Disney+ streaming service subscribers than was expected by the end of Q1 2020 which would mean they could have 25 million subscribers.

Shares of Nike (NKE) closed at $100.90/share down from the $101.92/share last Friday. Reportedly, Nike’s Vaporfly Next% sneakers or so-called super-shoes are giving tough competition to Japanese shoemakers Asics Corp. and Mizuno Corp which is leading to dropping shares of these shoemakers in Tokyo this week. Nike’s sneakers were in the limelight in one of Japan’s most-watched road races, the Hakone Ekiden with 84% runners wearing Nike’s Vaporfly Next% sneakers, as per statistics. Also, the winning team was spotted wearing Nike sneakers, who were known to opt for Adidas sneakers until this year.

Symbol Name Last Price Change % Change

Financials & Fintech

Shares of Goldman Sachs (GS) closed trading at $242.11/share, -.2%.

Reportedly, American Express  (AXP) ($127.28/share, -.41%) cardholders will have exclusive access to the newly opened two lounges at the Phoenix Sky Harbor International Airport. The 9,500 square feet Centurion Lounge and Escape Lounge opened side-by-side in Terminal 4 are exclusively for American Express Platinum Card and Centurion members offering them more options and premium amenities as they travel through Phoenix. Read the complete story.

Visa (V) closed trading at $193.77/share up from the $189.60/share last 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.

Symbol Name Last Price Change % Change

Materials & Natural Resources

 

Gold prices closed at $1,563.20/0z. up from $1,555.20/oz last Friday.

Silver closed lower at $18.13/oz up from $18.10/oz last Friday.

First Majestic Silver (AG) closed at $11.01/share down from $11.97/share last Friday. 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 $3.08/share down from $3.35/share last Friday after reaching a new 52-wk high of $3.51 recently. 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 on Friday:

  • Facebook (FB) $218.06/share, -.11% ($208.67/share a week ago)
  • Amazon (AMZN) $1883.16/share, -.94% ($1874.97/share a week ago)
  • Apple, Inc. (AAPL) closed at $310.33/share, +.23% after hitting a new all-time high of $312.67/share today ($297.43/share a week ago)
  • Netflix (NFLX) $329.05/share, -1.97%, ($325.90/share a week ago)
  • Alphabet (GOOG) $1429.73/share, +.70%, ($1360.66/share a week ago)
Symbol Name Last Price Change % Change

Investing & Inspiration

“Greed is all right, by the way. I think greed is healthy. You can be greedy and still feel good about yourself.”-Ivan Boesky

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

“I talk about macro themes a lot because they are fun to talk about, but it is the risk management that is the most important thing. The risk control is all bottom-up. I structured the business right from the get-go so that we would have lots of diversification.” -Michael Platt

Symbol Name Last Price Change % Change

Tomorrow

The earnings season kicks off during the coming week as US banks due to report their Q4 results while Tuesday brings forth the inflation report and the U.S./China “phase one” trade deal is supposed on or around Wed., Jan. 15th. On Thursday the retail sales report should surface and then the industrial production report on Friday.

The 38th annual JPMorgan conference will be in SF next week and I will be meeting with approx. 40 CEOs of biotech and medtech companies.  I will be also attending a Tribe Public Keynote Speaker Luncheon Event in San Francisco to hear from CEO Dietrich Stephan Ph.D., a brilliant geneticist, of Pittsburg-based Neubase Therapeutics (NASDAQ: NBSE) during the JPMorgan Annual Health Care Conference Week. NeuBase is developing the next generation of gene silencing therapies with its flexible, highly specific synthetic antisense oligonucleotides. Their proprietary NeuBase peptide-nucleic acid (PNA) antisense oligonucleotide (PATrOL™) platform allows for the rapid development of targeted drugs, increasing the treatment opportunities for the hundreds of millions of people affected by rare genetic diseases, including those that can only be treated through accessing of secondary RNA structures. Using PATrOL technology, NeuBase aims to first tackle rare, genetic neurological disorders. NeuBase recently won The Scientist’s Top 10 Innovations of 2019 Award for its Janus Base Technology and has picked BUY recommendations with a $14/target price recently from Oppenheimer, BTIG, and HC Wainright.

 

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