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Wrangling Over HEALS ACT & Mixed Economic Reports Dragged Markets Down Tuesday Ahead of FOMC Meeting

By John F. Heerdink, Jr.

The markets moved lower on Tuesday giving back much of Monday’s gains. Investors were forced to sift through conflicting economic reports while suffering the results of the current political wrangling around the next round of stimulus, not to mention the upcoming election campaigns.

The Conference Board’s Consumer Confidence Index report 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%.

Senate Majority Leader Mitch McConnell’s “HEALS ACT,” another coronavirus stimulus proposal which represented another $1 trillion in aid, was met with significant opposition on Tuesday leaving the market to doubt that it will go through in August as was widely believed.

The Dow 30 closed at 26,5379.28 down .77% as a number of components reported. Pfizer (PFE) ($39.02/share, +3.9%) beat Wall Street’s expecations while offering positive guidance, but 3M (MMM) ($155.33/share, -4.9%) & McDonald’s (MCD) ($196.24/share, -2.5%) failed to do the same.

The S&P 500 lost .65% closing at 3218.44 the real estate sector rose 2.1% & the utilities sector rose 1.6% to lead all sectors today.

The NASDAQ closed at 10,402.09 down 1.27%. The heavily weighted and widely followed FAANG stocks dropped across the board today as follows as they gear up to report this week and as Amazon, Apple, Facebook & Google testify before Congress regarding tech antitrust issues: Facebook (FB) closed at $230.12/share down 1.45%, Amazon (AMZN) closed at $3,000.33/share down 1.8%, Apple (AAPL) closed at $373.01/share down 1.64%, Netflix (NFLX) lost 1.44% closing at $488.51/share & Alphabet (GOOG) closed at $1,500.34/share down 1.95%.

The little guys on the Russell 2000 closed at 1,469.76 down 1%.

Gold closed further above the $1900 mark again at $1,951(+2) while silver prices dropped back today to close at $24.12/oz (-.96). North American silver and gold producer Hecla Mining Company (HL) closed at $5.46/share down .91% after establishing another new 52-week high of $5.68/share intraday trading yesterday. HL’s 52-week low is $1.38.  North American silver producer First Majestic Silver (AG) closed at $13.86/share down 2.74% after establishing a new 52-week high of $14.50 yesterday.

The energy sector dropped 1.8% today as 0il prices fell 1.4% closing at $41.04/bbl. A few energy leaders closed as follows: Chevron (CVX) closed at $89.11/share down 2.12%, Exxon (XOM) closed at $43.55/share down 1.18% & highly leveraged Occidental Petroleum Corporation (OXY) closed at $16.35/share down 2.10%. Midstream player, Enterprise Products Partners (EPD), closed trading at $18.29/share up .99% and is currently sporting an attractive $1.78/share dividend or 9.83% while USA Corporation Partners, LP. (USAC), one of the nation’s largest independent providers of natural gas compression services, closed at $12.32/share down 3.22% while offering a $2.10/share (17.06%) dividend.

The 2-yr US treasury yield closed down 1 point at .14% while the 10-yr yield dropped 3 basis points to close at .58%. The U.S. Dollar Index strengthened by .1% to end at 93.77. 

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:

  • Shares of COVID-19 vaccine candidate developer, Moderna (MRNA) closed at $81.49/share up another 1.98% (~+11% in the last 2 days) after it was announced that they have received an additional $472M from the US to boost development.
  • Shares of TransEnterix (TRXC) closed trading at $4.38/share up 17.13% today. 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 Eastman Kodak Company (KODK) rose 203.05% closing at  $7.94/share after reaching $11.80 on 263.51M shares of trading volume today. No, the company is not pushing into polaroids again, but it did announce that it is getting a $765M U.S. loan to produce pharmaceutical ingredients in the US, as the US is seeking to reduce dependency on other countries by bolstering domestic supply chains.

TOMORROW

The macroeconomic calendar will deliver the following point:

  • The July FOMC policy statement
  • The Pending Home Sales Report for June
  • The weekly MBA Mortgage Applications Index
  • The Advance June reports for International Trade in Goods, Retail Inventories, and Wholesale Inventories

WATCH LIST

  • Atossa Therapeutics (NASDAQ: ATOS) closed at $3.97/share up another 1.79% after reaching an intraday high of $4.09.
    • 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.

    • This week, Atossa announced that Atossa’s CEO, Dr. Steven Quay, M.D., Ph.D., will present at Tribe Public’s Zoom Webinar Presentation and Q&A Event that is scheduled to begin at 8 am pacific/11 am eastern on Thursday, July 30th. During this complimentary, 30-minute event, Dr. Quay will present the company followed by a Q&A session regarding Atossa’s breast cancer development programs and recent progress with its two COVID-19 treatment programs. To register to join the complimentary event, please visit the Tribe Public LLC website: www.tribepublic.com, or send a message to Tribe’s management at research@tribepublic.com to request your seat for this limited capacity Zoom-based event.
    • Recently, The Maxim Group’s Analyst Jason McCarthy, Ph.D.mupdated 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 followed up on Thursday this week and 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.
    • Recently, ATOS announced that it hired key personnel in clinical, regulatory, and chemistry manufacturing and controls (CMC). The new hires include Heather Fraser, Ph.D., as vice president of clinical, regulatory, and CMC; Natalie Farris, MS, as senior director of CMC; and Devon Payne as director of clinical operations. “Hiring of these talented and accomplished individuals will help accelerate the advancement of our development pipeline, which includes programs in breast cancer and COVID-19. We welcome Heather, Natalie, and Devon to Atossa and look forward to their important contributions as we execute on our value-creation strategy,” commented Steven Quay, M.D., Ph.D., president, and CEO of Atossa.
    • We are seeking to see if ATOS successfully advances one or both COVID-19 programs by receiving IRB and FDA approval to move in tot he clinic.
  • Shares of Fate Therapeutics (FATE) closed at $31.19/share down 6.2%. 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

    • 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 $7.54/share up 1.07 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 $2.97/share today up 2.41% 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 $4.15/share up 6.41% after reaching an intraday high of $4.49/share as interest and daily trading volume begins in this low 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 $4.38/share up 17.13% today.
    • 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.

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 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%.

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. 

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 Bioscience’s 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.  Steve Shum, Chief Executive Officer of INVO Bioscience, stated, “As we continue to improve our commercialization activities and expand the awareness of our FDA-cleared INVOcell device both domestically and abroad, we also set the objective to improve the capitalization structure of the company in order to enhance our public company visibility and attract a larger audience of investors. Today’s announcement is an important step in that process.”  Currently, it is estimated that only 1% to 2% of the estimated 150 million infertile couples worldwide are being treated, but help is on the wayRecently, The Morning Blend aired an interview on WTMJ-4 Milwaukee where Dr. Ellen Hayes, a Reproductive Endocrinologist and Infertility Specialist from Vios Fertility Institute, discussed information regarding their new research in health, pregnancy, and COVID19. Dr. Hayes also shares their research and a new offering of INVO Bioscience’s  (INVO) FDA cleared infertility treatment called INVOcell The INVOcell technology, which continues to gain worldwide recognition and adoption, provides an in-vivo incubation solution that can help increase access and capacity to the large underserved global fertility market. The INVO Procedure is a revolutionary in vivo method of vaginal incubation that offers patients a more natural and intimate experience and more cost-effective. For the rest of 2020 Vios Fertility Institute is giving a special offer for InVoCell. The offer includes retrieval, monitoring, fresh embryo transfer for $6500, it normally costs $7200, which is still significantly less expensive than traditional lab-intensive IVF. Please watch the concise interview by clicking this link now! 

 

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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

 

“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

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