“Friday’s Mixer” Vista Partners Daily Market Recap 9/13/19

By John Heerdink LinkedIn

The markets finished a bit mixed today but the Dow proceeded to charge forward as it gained 37.07 points closing at 27,219.52 up .14% & now moving well above the 27k mark and dare I say eyeing 28k? The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index,  also regained its composure today ending up .20% of 3.07 points closing at 1,578.14.  The tech-heavy Nasdaq closed at 8,176.71 down .22% or 17.75 points. The S&P 500 also lost 2.18 points or .07% to end the session still above 3k at 3,007.39.

The trade wars once again seemed to play a solid hand in the advancement of the markets after President Trump recently extended an olive branch in the negotiations to the Chinese via delaying raising tariffs from 25% to 30% on $250B of their goods from the original proposed date of Oct. 1 to  Oct. 15. 

We also got a nice shot in the arm from some Friday economic readings that included the retail sales report for the month August which rose .4% month/month while, excluding autos, retail sales were even. We also saw that the preliminary reading for the University of Michigan’s Index of Consumer Sentiment was 92 up from the reading in August (89.8). The import prices report confirmed that they move lower by .5% month/month in August while export prices moved lower by .6% month/month in August. The business inventories report saw a move higher by .4% in July.

However, oil dropped again today to $54.88/bbl down another .5%, after recent reports that President Trump may be easing up on sanctions on Iran. The energy sector rose .8%. Chevron (CVX) moved higher up by .07% closing at $121.50/share & Exxon (XOM) closed higher up by 92% closing at $72.64/share.  Occidental Petroleum (OXY) closed at $45.09/share down by .68%.

Treasury yields continued its recent move higher again today. The 2-yr Treasury yield closed at 1.79% up .09 & the 10-yr yield finished higher at 1.90% up .11. The U.S. Dollar Index closed at 98.20 down .1% on the day.

Volatility 

Volatility bets moved lower again today with the swing to the upside in the markets.   The CBOE Volatility Index (VIX) closed at $13.74/share down 3.38% or $.48/share. The 2x leveraged ETF TVIX  closed at $13.20/share down 2.22% or $.30/share and traded tightly between $12.93 and $13.55 today.

Metals & Mining

Gold prices moved lower today & closed at $1490.85/oz. Silver closed at $18.21/oz. Hecla Mining Company (HL) closed at $1.81/share off 4.74%. First Majestic Silver closed higher at $9.31/share off 4.81%.

Healthcare

The S&P 500 healthcare sector closed at 1055.71 down .07%. UnitedHealth (UNH) closed up 2% closing at $233.61/share, Walgreens Boots Alliance (WBA) closed at $55.99/share up .77% & Cigna (CI) gained 1.18% closing at $160.85/share.

INVO Bioscience, Inc. (IVOB) ended the day at $.299/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. 

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. Read Complete Story.

Biotech

The Ishares Nasdaq Biotechnology ETF (IBB) moved higher up .05% to close at $104.20.

Atossa Genetics (ATOS),  a Seattle-based biotech firm developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions closed at $2.03/share down 3.33% after hitting a high of $2.18 today and a $2.25 week high. The average daily trading volume is 408,562 shares per day and reported Q2 financial results & company update today. Yesterday Atossa announced that all participant activities have been completed in its Phase 1 clinical trial of a new proprietary modified-release oral tablet form of its Endoxifen. This is the next generation of oral Endoxifen following the successful clinical studies of the capsule form of the company’s oral Endoxifen. Steven C. Quay, Ph.D., M.D., CEO, and president of Atossa, commented: “We are very pleased that this study enrolled so quickly, with all 24 participants enrolled and dosed over the past six weeks. This is a very important study for Atossa as we plan to use the new modified-release oral tablet in our upcoming Phase 2 study to reduce breast density. We expect to report preliminary results from the Phase 1 study in the next 30 days and then move forward with the Phase 2 study in the fourth quarter. Ultimately, the goal of the modified-release aspect of the drug is to create more even uptake of the drug which we believe may reduce side effects and improve efficacy.” The Phase 1 study is being conducted in Australia. The objectives of the study are to assess safety and tolerability and to ascertain the pharmacokinetics of the tablet. The study is 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.

Atossa presented this week at the Rodman & Renshaw Conference in NYC and published their updated presentation that included their near term milestones on page 23. It includes a milestone regarding their Oral Endoxifen Phase 1 trial where they expect to reveal their “results from Phase 1 study of the new modified-release tablet” this month.

Consumer Staples and Discretionary

Walmart (WMT) closed at $117.43/share up .44%. Recently beat earnings expectations and added positive guidance.

Disney (DIS) closed at $138.02/share up .38%.

The Home Depot (HD) closed at $233.98/share up .08%.

McDonald’s (MCD) closed at $209.81/share down 1.1%.

Target (TGT) closed at $107.99/share down .87%.

Boeing (BA) closed at $379.76/share up 1.1%. Boeing recently announced a deal with China Airlines for 6 777 Freighters ad the CEO sees “solid progress” but sees the US-China trade wars as still a risk.

Financials

S&P 500 Financials sector climbed again today as interest rates climbed again and closed up .8%.

JPMorgan Chase & Co. (JPM) closed at $120.23/share up 1.97%.

Goldman Sachs (GS) closed at $219.90/share up .53%.

Visa (V) closed at $177.27/share down .4%.

Tech

S&P 500 Technology Hardware closed down .8.87%

Apple (AAPL) closed at $218.75/share down 1.94%.

Cisco Systems, Inc. (CSCO) closed at $50.03/share up .2%.

IBM (IBM) closed at $143.67/share up .03%.

Microsoft (MSFT) closed at $137.32 share up .15%.

Facebook (FB) closed at $187.19/share down .15%.

Amazon (AMZN) closed at $1,839.34/share down .23%.

Netflix (NFLX) closed $294.15/share up 1.83%.

Google (Alphabet, Inc.) (GOOG) closed at $1,239.56/share up .43%.

Materials

S&P 500 materials rose another 1.1%,

Dow Inc. (DOW) closed at 48.20/share up 2.62%.

Day or Short Term Trading Update

Our recent buy of Bloom Energy ( BE) at $5.06/share and $4.99/share paid off as it surged to $5.70 about a 14% move. We were seeking a swing back up to at least the high $5’s after its recent beat down and we got it.

We identified San Jose, CA’s Zscaler (ZS), a cloud-based web security provider, as a bounce play after it got slammed earlier this week after being downgraded and closed down at $70.80. ZS popped then to $74.51/share for an approximate 5% gain.

The Hain Celestial Group, a leading organic and natural products company with operations in North America, Europe, Asia & the Middle East,  was also identified as another bounce play. HAIN shares closed trading at $18.36/share Wednesday (Aug. 21st) after a recent analyst downgrade and a simultaneous price drop from the $22 level that seemed to be triggered by fears surrounding The Brexit issue and timeline. Thursday, Aug 22nd, HAIN  shares rose to an intraday high of $18.99 and then closed at $18.91 for 3% move.

On  Aug. 28th The Hain Celestial Group (HAIN) announced the completion of the divestiture of its Tilda to Ebro Foods for $342 million in cash. We reentered HAIN stock at $18.30/share and it moved to an intraday high of $18.66 prior to closing at $18.36/share up .99%. HAIN is due to report Q4 and fiscal year 2019 earnings tomorrow at 8:30 am eastern.  Today HAIN hit an intraday high of $19.69/share and closed at $19.03 up 3.65%. This was another successful exit.

Thursday, Aug. 29th we also entered into Acasti Pharma Inc. (ACST) at $1.81/share for a momentum trade and targeting minimal price target of $2/share and then added additional shares at $1.79. ACST is a biopharmaceutical innovator focused on its prescription drug candidate CaPre for the treatment of severe hypertriglyceridemia (HTG). ACST shares closed today’s trading at $1.99/share up 10.56% after hitting an intraday high of $2.03 on trading volume of 2.04M shares. B. Riley initiated coverage with a BUY Recommendation and a Price Target of $7.75/share earlier this week. We locked in our quick trade at $2/share today for ~11.5% gain. We will look to reenter ACST if we see a significant pullback.

We added more Atossa Genetics (ATOS) today $2.02/share scaling the position that we started at $1.97/share – $2.12/share. Atossa presented at the Rodman & Renshaw Conference in NYC yesterday and used their updated presentation that included their near term milestones on page 23. It includes a milestone regarding their Oral Endoxifen Phase 1 trial where they expect to reveal their “results from the Phase 1 study of the new modified-release tablet” this month. The stock has traditionally moved well around these events and closed today’s trading at $2.3 down 3.33% after hitting $2.18 on 333,115 shares of trading.

We traded Stoke Therapeutics, Inc. (Nasdaq: STOK), a biotechnology company that is pioneering a new way to treat the underlying cause of genetic diseases by precisely upregulating protein expression, overnight as it closed at $28.80 down close to 14% on Tuesday and then bounced in early morning trading to $30.60/share on Wednesday.

Our recent addition of Clearside Biomedical (CLSD) that we initiated a position in at $.67/share which closed at $.79/share today up 1.28. However, we feel this may have a bit of room to run again.

Economy

On Monday we received the Consumer credit report which showed a move higher by $23.3B in July which is the largest expansion move since July 2018. Will the consumer be able to repay? Will they not? Know one really knows but one thing is certain if that credit is flowing which means buying in the near term

On Tuesday,  we received the NFIB Small Business Optimism Index report for August which moved lower to 103.1 and down from July’s reading of 104.7.  We also received the July Job Openings & Labor Turnover Survey which confirmed that job openings went down to 7.217M.

On Wednesday, we got a surprise from the Producer Price Index report that confirmed that final demand was up .1% month/month in August & the index for final demand (excluding food and energy) moved higher by .3% much more than was widely thought. Wholesale Inventories was also confirmed to have moved up by .2% in July while weekly MBA Mortgage Applications Index reportedly move up by 2%.

On Thursday, the Total CPI for August was revealed to have moved higher by .1% month/month. The core CPI, sans food & energy, jumped more than expected up .3%. The Total CPI is no up 1.7% year/year and core CPI up 2.4%. The Initial claims report for the week ending Sept. 7 dropped 204k while continuing claims for the week ending Aug. 31 lowered to 1.670M. Finally, the Treasury Budget for August showed a deficit of $200.3B. The fiscal YTD deficit is $1.07T while the budget deficit over the trailing 12 months is $948B.

On Friday, we received economic readings that included the retail sales report for the month August which rose .4% month/month while, excluding autos, retail sales were even. We also saw that the preliminary reading for the University of Michigan’s Index of Consumer Sentiment was 92 up from the reading in August (89.8). The import prices report confirmed that they move lower by .5% month/month in August while export prices moved lower by .6% month/month in August. The business inventories report saw a move higher by .4% in July.

Vista Partners LLC (”Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: www.vistapglobal.com 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.

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