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Vista Partners’ Friday Weekly Market Wrap For January 3, 2020

By John F. Heerdink, Jr.

The broad markets sold off on Friday seemingly in part reacting to the news that US’s airstrike had killed Iran’s top military commander. In turn threats from Iran surfaced and fear was now in the markets as escalation is believed to be in the cards. The “fear gauge” Vix (TVIX) ended at $51.88/share up +9.61% today but down from $52.17/share last Friday’s close. It did not help the markets that the ISM Manufacturing Index for December was reported at a 47.2% reading, again below the Mendoza line for the 5th straight time.

As a result, the S&P 500 ended the day at 3,234.85, representing a -.2% weekly decline leaving it up .1% YTD. The Dow Jones Industrial Average ended at 28,634.88 representing a -.0.0% weekly decline leaving it up +.3% YTD. The Nasdaq Composite closed at 9020.77 on Friday, realizing a weekly +.2% advance leaving it up .1% YTD. The Russell 2000 moved lower by -.46% at the close of trading Friday at 1660.87 representing a weekly -.5% decline leaving it down -.4% YTD.

Markets

Symbol Name Last Price Change % Change

Big Movers

Shares of Acorda Therapeutics (ACOR) which closed at $1.96/share yesterday but rose as high as $2.55/share before ending at $2.27/share up +15.82%. Recently ACOR announced a $276M exchange of convertible senior debt that moved maturity out to 2024.

Shares of Bilibili Inc. (BILI) jumped +12.51% yesterday closing at $20.95/share after achieving a new 52-wk high of $21.89. Today shares jumped again to a new 52-week high of $22.58.share before closing at $22.08, +5.39%. The 52-wk range is 13.23 – 22.58. Bilibili is a leading online entertainment platform for young generations in China. They announced its unaudited financial results for the third quarter ended September 30, 2019 back on November 18, 2019. Total net revenues reached RMB1,859.0 million (US$260.1 million), a 72% increase from the same period in 2018. Average monthly active users (MAUs1) reached 127.9 million, mobile MAUs reached 114.2 million, representing increases of 38% and 43% from the same period in 2018, respectively. Average daily active users (DAUs) reached 37.6 million, a 40% increase from the same period in 2018.

 

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

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 the Conference Board’s Consumer Confidence Index report showed a drop to 126.5 in December. The FHFA Housing Price Index Report for October rose by +.2%. The S&P Case-Shiller Housing Price Index for October rose by +2.2%.

On Wednesday, nothing was  reported on New Years Day.

On Thursday, the initial claims for the week ending December 28, 2019, were confirmed to have gone down by 2k to 222k as the continuing claims for the week ending December 21, 2019, rose by 5k to 1.728M.

On Friday, the ISM Manufacturing Index for December was reported at a 47.2% reading.  The total construction spending rose +.6% month/month in November while residential spending moved up by +1.8% month/month (led by new single-family construction up +1.2% and nonresidential spending decreased -.3% month/month.

Agriculture & Energy

Oil prices closed at 63.03/bbl up from $61.74/bbl a weekly rise of 2.1%.

Symbol Name Last Price Change % Change

Biotech & Healthcare

The S&P 500 healthcare sector closed at 1180.33 up from 1192.49 last Friday.

The Ishares Nasdaq Biotechnology ETF (IBB) moved lower this week closing at $118.36 vs. last Friday’s close of $121.56. The 52-wk range is $96.03 – $123.74.

The NYSE Arca Biotech Index (^BTK) closed at 4,985.19 down from the 5,107,46 level last week.

Johnson & Johnson (JNJ) closed at $144.28 down -1.16% on Friday.

Shares of Atossa Genetics Inc. (NASDAQ: ATOS) closed at $1.59/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 $101.92/share, -.27% today.

Symbol Name Last Price Change % Change

Financials & Fintech

Visa (V) closed trading at $189.60/share, -.8% 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.

Symbol Name Last Price Change % Change

Materials & Natural Resources

 

Gold prices closed at $1,555.20/0z. up from $1,515.50/oz last Friday.

Silver closed lower at $18.10/oz up from $17.83/oz last Friday.

First Majestic Silver (AG) closed at $11.97/share up from $11.89/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 $3.35/share up from $3.31/share last Friday after reaching a new 52-wk high of $3.51 this 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

FAANG stocks closed as follows on Friday:

  • Facebook (FB) $208.67/share, -.53%
  • Amazon (AMZN) $1874.97/share, -1.21%
  • Apple, Inc. (AAPL) closed at $297.43/share, -..97% (set a new 52-wk high of $300.60/share in intraday trading this week)
  • Netflix (NFLX) $325.90/share, -1.19%,
  • Alphabet (GOOG) $1360.66/share, -.49%
Symbol Name Last Price Change % Change

Investing & Inspiration

 

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

We will not receive any significant economic data on Monday.

 

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