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“Early Fireworks” Vista Partners Daily Market Recap 7/3/19

By John F. Heerdink, Jr.

In this shortened holiday trading day, where the markets closed at 1 pm eastern, we were served an early and brilliant fireworks display in the form of a record day for the S&P 500, Dow and the Nasdaq.  The S&P 500 moved up 22.81 points and closed at 2,995.82 up .77% on the day. The Dow added 179.32 points closing up .67% ending at the high of the day of 26, 966.00 and very close to 27k. The tech-heavy Nasdaq closed at 8,170.23 up .75% up 61.14 points. The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index gained 11.58 points closing at 1,572.12 up .74%. 

In this session that was not the most active, as many investors had already pushed off to enjoy the 4th of July holiday week activities, the markets received some relatively significant and weak economic data which pushed forward the belief that an interest rate cut lies ahead of us which helped buoy the market. The data included the following:
  • The ISM Non-Manufacturing Index dropped to 55.1% in June from 56.9% in May pointing to a slowdown in growth in the non-manufacturing sector
  • Factory orders declined 0.7% in May after declining 1.2% in April indicating that orders for nondefense capital goods orders, excluding aircraft increased 0.5% versus a 0.4% increase seen in the advance durable goods orders report.
  • The U.S. trade deficit widened to $55.5 billion in May from $51.2 billion in April indicating that the average real trade deficit in Q2 is 2.3% greater than the Q1 average.
  • Initial claims for the week ending June 29 decreased by 8,000 to 221,000 while continuing claims for the week ending June 22 also decreased by 8,000 to 1.686 million indicating that initial claims continue to run at relatively low levels suggesting that employers remain reluctant to reduce the size of their workforce.
The volatility trading range tightened up today while volatility bets continued their decline. The CBOE Volatility Index (VIX) closed lower at $12.57 off 2.78% or $.36/share. It traded between $12.56- $13.19. The 2x leveraged ETF TVIX also closed lower at $15.49 down 1.02% and traded between $15.38 and $15.94 today. The US Dollar Index lost .03% today ending the day at 96.303.
The 2-yr treasury yield ended flat at 1.764%  (-.001) & the 10-year Treasury note closed up at 1.953% (-.024.)  Oil prices moved higher closing at $57.34./bbl up 1.9%.  Dow 30 energy participants Chevron (CVX) moved higher by .34% closing at $123.35 & Exxon (XOM) closed higher by .95% closing at $76.44. Gold moved lower slightly by .06% and closed at $1418.45/oz.

Big tech stocks glided higher again today. Amazon (AMZN) gained .24% closing at 1,939.00,  Alphabet (GOOG) moved higher by .93% closing at $1,121.58, Apple (AAPL) was up .83% closing at $204.41, Facebook (FB) finished higher too at $197.20 up 1.13%. Shares of Microsoft (MSFT) gained .64% closing at $137.46. Chipmaker Intel (INTC) ended up .83% closing at $48.52/share & Micron (MU) shaved another .03% closing at $39.59 after its recent charge higher post beating earinings estimates.

Institutional alternative asset manager Och-Ziff Capital Management Group (OZM) closed at $23.92 up 1.92% after achieving another new 52-wk high of $24.36 earlier this week. The 52-wk range is $8.60 – $24.36. OZM sports a 4.26% cash dividend. Los Angeles-based Colony Capital (CLNY) a leading global investment management firm with assets under management of $43 billion closed at $5.08 up .59%. CLNY pays an 8.71% cash dividend.

Nike (NKE) closed at $86.20 moving up a solid 1.46%. Nike recently missed analyst earnings estimates but maintained full-year guidance.

The health care sector moved higher again today & rising towards the end of the day. The S&P 500 healthcare sector closed at 1093.05 up .91%. Community Health Systems, Inc. (CYH) one of the largest publicly traded hospital companies in the US hit an intraday high of $2.82/share & a low of $2.7153 today and closed flay on the day at $2.73 on 976,656 shares of trading. On June 27th CYH announced that its subsidiaries signed a definitive agreement to sell 92-bed Bluefield Regional Medical Center in Bluefield, West Virginia, and its associated ancillary healthcare operations to subsidiaries of Princeton Community Hospital. The hospital included in this transaction is among the additional planned divestitures discussed on the Company’s Q1 2019 earnings call. Also, note there has been more insider buying occurred recently as Michael Dinkins bought shares at $3.168/share on 5/28/19 according to the latest Form 4 filed at Michael Dinkins has served on our Board of Directors since December 2017. Mr. Dinkins has served as president and chief executive officer of Dinkins Financial, a consulting firm that helps small businesses gain access to capital, since October 2017. See our story more details: INSIDER BUYING ALERT: Community Health Systems, Inc. (CYH) Director Michael Dinkins. The Ishares Nasdaq Biotechnology ETF (IBB) jumped 1.17% closing at $110.93. This sector has been on a more than healthy run over the last 30 days. The 52-wk range is $89.01 – 122.97. AquaBounty Technologies, Inc. (AQB), a biotechnology company focused on enhancing productivity in the aquaculture market closed today’s trading at $3.48/share up a strong $.40/share or 12.99%. The 52-wk range is $1.51 – $5.45. The company recently commenced the commerical production of AquAdvantage Salmon at the Company’s farm in my orginal home state of Indiana.
Atossa Genetics (ATOS),  a Seattle-based biotech firm developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions closed today at $2.30. The average daily trading volume is 841,460 shares per day.  Atossa announced last week that a preliminary analysis from its recently completed Phase 2 study of the company’s proprietary 20mg daily topical Z Endoxifen (“Endoxifen”) showed a significant and rapid reduction in mammographic breast density (MBD). Studies by others using tamoxifen have demonstrated that density reduction induced by tamoxifen is associated with a significant reduction in breast cancer incidence. See complete story.
INVO Bioscience, Inc. (IVOB) ended the day at $.3893/share as 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. IVOB also announced last week news of their recent appointment of Pressly Ahammed as the new Director of International Business Development and he will be responsible for the Company’s international distribution channels in Europe, Middle East, Africa & parts of Asia. Ahammed joined IVOB from Cooper Surgical where he held a similar position. See complete story. Pfizer (PFE) closed higher at $44.40 up .41% after the recent announcement regarding their acquisition of Array BioPharma (ARRY) for ~$11.4 billion or $48/share in cash.  See complete story. The pharmaceutical giant and Dow component Merck & Co, Inc. (MRK) that recently announced the acquisition of Tilos Therapeutics for a consideration of up to $773 million closed at $86.90 up by 1.63%.
San Diego-based biotech Fate Therapeutics (NASDAQ: FATE), dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders,  closed at $21.91/share jumping 6.46% on 648,571 shares of trading after establishing a new all-time intraday high of $21.94 . The 52-week range is $8.64 – $21.94. Guggenheim Securities initiated coverage on FATE last week with a “Buy Rating” and a $25/share price target. Scott Wolcho, President and CEO of Fate Therapeutics presented at the Jefferies 2019 HealthcareConferencee in New York yesterday. Roth Capital initiated coverage on FATE with a Neutral rating and a $20 price target last Friday, June 7th. Mizuho initiated coverage with a price target of $27/share this week.
Boston-based Pieris Pharmaceuticals (PIRS) closed at the high of the day $4.63 up 1.31% on 122,062 shares of trading. The stock traded between $4.4870 & $4.63 today and the 52-wk range is $2.39 – $6.55. Xeris Pharmacueticals, Inc. (XERS) closed higher at $11.73 up .51%. Xeris is a specialty pharmaceutical company leveraging its novel formulation technology platforms to develop and commercialize ready-to-use injectable and infusible drug formulations. Biohaven Pharmaceutical Holding Company Ltd., (BHVN), a clinical-stage biopharmaceutical company with a portfolio of innovative, late-stage product candidates targeting migraine and neurological diseases, including rare disorders, announced recently the pricing of its underwritten public offering of 6,976,745 of its common shares at a price of $43.00/share. The gross proceeds of the offering are expected to be $300 million. Shares of BHVN closed at $44.58 today up a more than solid 3.60% after hitting an intraday high of $44.96/share. The 52-wk range $29.17 t0 $67.86. Yesterday they announced that the first patient has been enrolled in a Phase 2 clinical trial assessing the efficacy and safety of rimegepant in treatment-refractory trigeminal neuralgia. Bedford, Massachusetts-based Stoke Therapeutics is a biotechnology company pioneering a new way to treat the underlying cause of severe genetic diseases by precisely upregulating protein expression. Recently Stoke Therapeutics announced the pricing of its initial public offering (IPO) of 7,891,110 shares of its common stock at a price to the public of $18.00 per share. The shares are now trading on The Nasdaq Global Select Market as of June 19, 20,19 under the symbol “STOK.” Stoke’s stock traded as high as $31.76 Friday a new all-time high prior to closing trading at $28.15/share down 1.54% today. See complete story.   Change Healthcare Inc., a leading independent healthcare technology platform, announced Wednesday after the close that they had priced their initial public offering of 42,857,142 shares of its common stock at a price to the public of $13.00 per share and its concurrent offering of 5,000,000 of its 6.00% tangible equity units (“Units”), with a stated amount of $50. The offerings are expected to close on July 1, 2019, subject to customary closing conditions. The completion of the Units offering is conditioned upon the completion of the common stock offering, but the completion of the common stock offering is not conditioned upon the completion of the Units offering. Change has granted the underwriters in the common stock offering a 30-day option to purchase up to an additional 6,428,571 shares of common stock. Change has granted the underwriters in the Units offering an option to purchase, within a 13-day period beginning on, and including, the date of the initial issuance of the Units, up to an additional 750,000 Units. The shares and the Units began trading on the Nasdaq Global Select Market today, under the symbols “CHNG” and “CHNGU,” respectively. CHNG shares rose to a high of $15.19 and closed at $15/share up 15.38% in its first day of trading on Thursday but closed today at $14.88 up nicely by 2.62%.

Elsewhere on the recent IPO front, Zoom Video Communications (ZM) flew up by 6.25% closing at $90.45 & Uber Technologies (UBER), the ride-sharing company closed lower at $44.23/share up .52% & still below its recent IPO price of $45 but managed to establish a new all-time intraday high of $47.08 earlier this week . Plant-based burger maker Beyond Meat (BYND) closed at $149.71 adding 1.20%. Their meat is made of four main ingredients: water, pea protein isolate, canola oil & refined coconut oil and is meant to taste like “meat.  Slack Technologies (WORK) which jumped into the public markets with their IPO last week flying up 48.5% from their offering price of $26/share closed today at $36.00 off 1.50% on the day. Slack is a provider of a cloud-based workplace messaging app and went public via a direct listing avoiding paying fees to the relevant banks.

The US markets are closed tomorrow, July 4th to observe Independence Day but we will be at it for a full day of trading on July 5th!!!

Vista Partners LLC (”Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: with daily stories, weekly market updates, monthly macroeconomic newsletters, podcasts, & Vista’s proprietary equity and market research to help you stay informed and stay competitive. Vista’s mission is to invest partner capital while arming investors with a comprehensive global financial perspective across all market sectors. Vista also seeks to provide select issuers with actionable advice regarding fundamental development, corporate governance, and capital market directives. Stay Informed! Stay Competitive! Sign Up to receive FREE email updates here!
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