“Expanding” Vista Partners Daily Market Recap 10/8/19

By John Heerdink LinkedIn

“Expanding” seemed to be the word of the day today. First, it was widely reported that the U.S. Commerce Department expanded its Entity List” with 28 additional Chinese firms as they had played some role in “fostering violations of human rights” against a Muslim minority in China. A Beijing foreign representative warned that there could be retaliation and/or they might leave the end of the week discussions 24 hours early. The trade war had seemed as though it had expanded again and it would certainly extend but then another report came rushing across the world wide web that China is “sincere” in reaching a comprehensive deal.

The Fed got into the act as Chairman Powell confirmed that the Fed would be expanding its balance sheet, which had been shrinking, in order to add liquidity and to support growth while leaving the door wide open for another rate hike at the end of October. However, this positive move/news that would support a market was then countered by further news that the U.S. will move forward with visa bans on Chinese officials that they say are linked to the human rights abuses.

As a result, it was all “red” again today across the board. The S&P 500 ended today’s session down by 45.73 points or  1.56% as it closed at 2,893.06. All eleven S&P 500 sectors dropped today with the financials sector leading the sell-off as it dropped 2%. The Dow dropped 313.98 points closing at 26,164.04 down by 1.19%. The tech-heavy Nasdaq Composite closed at 7,823.78 down 1.67% or 132.52 points. The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index lost 25.19 points down 1.68% and it ended trading at 1,472.60.

Treasury yields declined today although it was a bit of a volatile ride. The 2-yr Treasury yield dropped to 1.42% down .04% & the 10-yr yield finished lower at 1.54% down .02%.

The U.S. Dollar Index strengthened again today and closed at 99.13 moving higher by .2%.

Oil prices dropped .3%  $52.66/bbl. Chevron (CVX) closed at $111.71/share down 1.37%, Exxon (XOM) closed at $66.70/share down by 1.94%. Occidental Petroleum (OXY) closed at $40.83/share down 3.2%.

Gold prices closed at $1,501/oz up $7.95/oz. Silver closed at $17.60/oz. Hecla Mining Company (HL) closed at $2.01/share up 4.15% on the day after Monday’s report that confirmed a 30% increase in Q3 silver production of 3.3 million ounces and gold production of 77,331 ounces & cash and cash equivalents of ~$33M an $24M increase over June 30th, 2019 with outstanding debt coming in slightly lower. First Majestic Silver (AG) closed higher at $9.86/share up 3.57%.

Volatility bets spiked today.  The CBOE Volatility Index (VIX) closed at $20.28/share up 13.55% or $2.42/share. The 2x leveraged ETF TVIX  closed at $16.08/share up 14.20% or $2/share and traded between $14.67 and $16.16 today.

Economic Reports

On Monday, we received the consumer credit report which showed a $17.9B move higher in August. On Tuesday, we received the Producer Price Index report for final demand has dropped .3% month/month in September. The index for final demand less food & energy dropped .3% too. We also learned that the NFIB Small Business Optimism Index for September has fallen to 101.8 from 103.1.

Healthcare

The S&P 500 healthcare sector closed at 1019.957 down 1.83%. UnitedHealth (UNH) closed lower by .51% at $220.11/share, Walgreens Boots Alliance (WBA) closed at $52.09/share down 1.27% & Cigna (CI) lost 1.35% closing at $147.19/share.

INVO Bioscience, Inc. (IVOB) ended the day at $.28/share. 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.

INVO Bioscience (IVOB) announced on August 2019 that revenues for their most recent 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.

INVO Bioscience announced recently 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 1.81% to close at $97.61 & the NYSE Arca Biotech Index (^BTK) closed at 4,098.37down 2.57%.

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 7th day of Breast Cancer Awareness Month.

Atossa announced a week ago 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.

Neubase Therapeutics (NBSE) closed at $4.88/share. Neubase is a biotechnology company developing next-generation antisense therapies to address genetic diseases. BTIG recently picked up coverage with a BUY rating and a target of $15/share.

Tech & Entertainment

Apple (AAPL) closed at $224.40/share down 1.17% but optimism continues to grow with regard to the new iphone models and new streaming entertainment offering, Alphabet (GOOG) closed at $1189.13/share down 1.54%, Facebook (FB) closed at $177.75/share down 1.07%, Microsoft (MSFT) closed at $135.67/share down 1.06%, NVIDIA (NVDA) closed at $177.23/share down 3.85% & IBM closed at $138.38/share down 2.05% while Cisco Systems (CSCO) lost 2.89% finishing at $46.39/share. Disney (DIS) closed at $128.47/share declining 1.86% and Netflix (NFLX) closed at $270.72 down 1.36% and Amazon (AMZN) closed at $1,705.51/share down 1.57%.



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