“Double Down?” Vista Partners Daily Market Recap 10/2/19

By John Heerdink LinkedIn

No sir!… I am not suggesting you double down on the stock market or anything at this point,  however, we did double our consecutive down days today as the markets got stung again & proceeded fall significantly across the board once again. The downward move came in reaction to additional less-than-stellar economic news that came out after yesterday’s report of the Institute for Supply Management’s factory index was reported to have slipped to 47.8 in September. Today brought forth the private-sector payrolls report were estimated to have risen by 135k which is exhibiting a slower gain in sector job growth which has now averaged 145k in Q3 vs 214k in Q3 2018. This report added to the doom and gloom scenario that many have grasped on to that the US is being swallowed into the whale of a global slowdown that continues to be overreported. What seemed to be ignored is the weekly MBA Mortgage Applications Index report which jumped 8.1% on the backside of last week’s significant 10.1% drop. Lennar (LEN), a homebuilder beat analyst estimates & also stated that contracts to purchase homes jumped 9% during the quarter that ended in August.

As a result, it was all “red” again today across the board.  The S&P 500 ended today’s session down by 52.64 points or 1.79% as it closed at 2,887.61 and continues trading below its 50-day moving average of 2948. All eleven S&P 500 sectors dropped with the energy sector cascading another 2.6% to lead the charge. The Dow performed even worse losing 498.42 points closing at 26,078.62 down by 1.86% after moved back from touching a low of 25,974.12. The tech-heavy Nasdaq Composite closed at 7,785.25 down 1.56% or 123.44 points. The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index fell 13.80 points down nearly .92% and it ended trading at 1,479.63.

Treasury yields were sharply down again today as many were continuing to flee to safety and bidding them up. The 2-yr Treasury yield closed at 1.48% & the 10-yr yield finished lower at 1.6% off .05%.

The U.S. Dollar Index weakened a little again today and closed at 99.02 moving lower by .1%.

The energy sector was again off 2.3% as oil prices dropped to $53.60/bbl down 1%. Chevron (CVX) closed at $116.01/share off 2.18, Exxon (XOM) closed at $68.95/share down by 2.35%. Occidental Petroleum (OXY) closed at $43.77/share down by 1.57%.

Green was found in the precious metals area as gold prices closed gained again today up $21.20/oz closing at $1,499.85/oz just shy of the $1500/oz level again. Silver closed at $17.59/oz. Hecla Mining Company (HL) closed at $1.93/share up 4.55% on the day. First Majestic Silver (AG) closed higher at $9.21/share up 1.32%.

Volatility bets propelled forward considerably again today with fears of lower global growth running amuck and the continued selloff.   The CBOE Volatility Index (VIX) closed at $20.56/share up 10.78% or $2/share. The 2x leveraged ETF TVIX  closed at $16.51/share up 12.93% or $1.89/share and traded between $15.39 and $16.92 today.

Economic Reports

On Monday, we received the Chicago PMI report for September and it went down to 47.1. On Tuesday, we received the ISM Manufacturing Index report for September which dropped to 47.8%. The total construction spending report confirmed an increase of .1% month/month in August. On Wednesday, the private-sector payrolls report was estimated to have risen by 135k which is exhibiting a slower gain in sector job growth which has now averaged 145k in Q3 vs 214k in Q3 2018. The weekly MBA Mortgage Applications Index report jumped by 8.1%.

Healthcare

The S&P 500 healthcare sector closed at 1017.63 down 1.52%. UnitedHealth (UNH) closed notched down by .21% at $216.75/share, Walgreens Boots Alliance (WBA) closed at $52.83/share down 3.42% & Cigna (CI) lost .79% closing at $149.24/share.

INVO Bioscience, Inc. (IVOB) ended the day at $.30/share down 3.23%. Daily trading volume continues to rise in concert with their announcing progress after their exclusive U.S. partnership with Ferring Pharmaceuticals, a leader in the reproductive health industry was announced in Q1-2019. Ferring has committed to providing the necessary sales and marketing resources to more fully develop the market in the United States. There are countless couples not able to receive reproductive treatments today, and Ferring can be instrumental in addressing the unmet needs of this cohort. Ferring has the industry experience, relationships and the marketing capabilities to successfully embed the INVOcell in clinics throughout the country.  IVOB is a medical device company, headquartered in Sarasota, FL focused on creating simplified, lower-cost treatment options for patients diagnosed with infertility. The company’s lead product, the INVOcell, is a novel medical device used in infertility treatment that is FDA cleared and that enables egg fertilization and early embryo development in the woman’s vaginal cavity.

Recently, INVO Bioscience (IVOB) announced that revenues for the quarter totaled $658,638 compared to $110,210 in the second quarter of 2018, an increase of 498%. Revenue growth was driven primarily by increased product sales in the U.S. as shipments to Ferring were above expectations outlined in May 2019 as they began to increase their marketing activities. On January 14, 2019, the Company closed an exclusive U.S. licensing agreement with Ferring International Center S.A. the parent Company of Ferring Pharmaceuticals U.S. to commercialize the INVOcell™ system for use in the treatment of infertility. As part of the U.S. licensing agreement, the Company received a $5 million one-time milestone payment, with the ability to receive an additional $3 million upon obtaining a label enhancement from the U.S. Food and Drug Administration.

Yesterday, INVO Bioscience announced that the Company will exhibit at the American Society for Reproductive Medicine (ASRM) 2019 Scientific Congress & Expo on October 12-16, 2019 in Philadelphia, PA at booth #1807 and the 20th World Congress of the International Society for In-Vitro Fertilization (ISIVF) on October 24-26, 2019 in Barcelona, Spain at booth #15. Kathleen Karloff, Chief Executive Officer of INVO Bioscience, commented, “We are pleased to participate in these important international industry events. We are gratified with the growing global acceptance of our INVOcell technology. INVOcell opens the door to pregnancy and the development of families for a large number of couples where more traditional methods have not. We provide hope to those that have exhausted other options, and we do it with a more natural experience and in a more cost-efficient manner. We are proud to have developed an effective treatment that will increasingly occupy a unique position in the fertility treatment industry worldwide.”

Biotech

The Ishares Nasdaq Biotechnology ETF (IBB) moved lower by .78% to close at $97.24 the NYSE Arca Biotech Index (^BTK) closed at 4,117.35 down .71%.

Atossa Genetics (ATOS),  a Seattle-based biotech firm developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions closed at $1.75/share on this 2nd day of Breast Cancer Awareness Month.

Atossa announced Monday that it had reported preliminary results from its Phase 1 study of its proprietary modified-release tablet form of oral Endoxifen. The Phase 1 study was conducted in Australia. The objectives of the study were to assess safety and tolerability and to ascertain the pharmacokinetics of the tablet. The study was randomized, double-blinded and placebo-controlled with both single and multiple-doses (daily for 14-days) in two groups with a total of 24 healthy female volunteers. Atossa’s oral Endoxifen capsule served as the comparator. Based on the number of women with MBD and the number of patients who have survived breast cancer but are not fully benefiting from taking tamoxifen, Atossa estimates that the potential markets for its proprietary formulations of Endoxifen could potentially exceed $1 billion in annual sales. All objectives were successfully met:

– Safety: There were no unexpected and serious adverse events; no clinically significant adverse safety signals; and no clinically significant adverse events in participants receiving the tablet form of oral Endoxifen. No participants withdrew or were removed from the study due to skin rashes and irritation or other adverse events (side effects).

– Tolerability: The tablet form of oral Endoxifen was well tolerated by each participant throughout the study.

Atossa also stated the following: These results demonstrate the suitability of the tablet form of oral Endoxifen for further clinical development.

“This was an important study because the results support advancing our modified-release tablet into a Phase 2 study to reduce mammographic breast density (MBD), which we plan to begin in the fourth quarter by contracting with a CRO,” commented Dr. Steven C. Quay, Ph.D., M.D., CEO and President of Atossa. “We will continue our analysis of the Phase 1 data and plan to announce additional results in the coming weeks. We also recently completed a successful Phase 2 study of our topical form of Endoxifen in which a significant reduction of MBD was achieved among study participants who applied the stronger dose of topical Endoxifen. Our success with the topical Phase 2 study and now the successful Phase 1 study of the tablet, supports our plan to advance our proprietary tablet into a Phase 2 study to reduce MBD.”

Legislation has been recently enacted in approximately 35 states requiring that women be notified if they have mammographic breast density (MBD) and those notifications typically state that women with MBD have a higher risk of developing breast cancer, and that mammography may not be as effective in detecting breast cancer because the MBD can “mask” the detection of cancers. In February 2019, Federal legislation was enacted that requires that the FDA adopt rules requiring that mammography reports include information about breast density and inform women about their breast density. It is estimated that approximately ten million women in the United States have MBD, for which there is no FDA-approved treatment. Although oral tamoxifen is approved to prevent breast cancer in “high-risk” women, it is used by less than 5 percent of women with an increased risk of developing breast cancer because of the actual or perceived side effects and risks of tamoxifen. Atossa Genetics believes its Endoxifen may provide an option for women to proactively reduce the density of their breasts. Moreover, the company’s Endoxifen may improve mammography accuracy and patient care by unmasking cancerous tumors that are otherwise obscured by high breast density.

Tech & Entertainment

Apple (AAPL) closed at $218.96/share down 2.51% as optimism coontinues to grow on the new iphone models and new streaming entertainement offer, Alphabet (GOOG) closed at $1176.63/share down 2.36%, Facebook (FB) closed at $174.60/share down .69%, Microsoft (MSFT) closed at $134.65/share down 1.77%, NVIDIA (NVDA) closed at $173.04/share down .55% & IBM closed at $141.69/share down 1.37% while Cisco Systems (CSCO) lost 2.47% finishing at $46.56/share. Disney (DIS) closed at $129.14/share declining .32% and Netflix (NFLX) closed at $268.38 down .57% and Amazon (AMZN) closed at $1,713.23/share down 1.29%.



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