“Gracias Mexico” Vista Partners Daily Market Recap 6/10/19

By John Heerdink LinkedIn

 The markets today push forward for yet the 5th day in a row. A “gracias” or “thank you very much” seems to be in store for our friends located south of the US border,  Mexico! The markets moved swiftly higher after receiving another shot of adrenaline from the tariff related news over the weekend. It was announced that President Trump had suspended the tariffs on Mexico post reaching an agreement that would seek to stem the flow of illegal immigrants across the US border. Apparently, this will include Mexico moving an additional 6000 troops to their southern border to stem the Guatemala migration.  He has warned that he will turn the tariffs back on if it is determined that Mexico is not doing enough. For now, though the 5% tariff on Mexico is not in effect and the US consumers, US companies and the markets are released from its hold for the time being. 

The S&P 500 ended the session up .47% at 2886.73. The Dow added 78.74 points up .30% closing soundly above 26k at 26,062.68 while the tech-heavy Nasdaq moved up 105% closing at 7823.17 up 181.07 points & the Russell 2000, the small-cap stock market index of the bottom 2,000 stocks,  rose .61% and closed at 1523.56 up 9.17 points.

We also received news that a few significant mergers today which also served to add wind behind the sails of the markets.

  •  Dow 30 component United Technologies (UTX) & Raytheon (RTN) agreed to an all-stock merger, valued at approximately $120 billion. UTX shareholders will own a ~57% & RTN shareholders will own  ~43%. UTX is an industrial conglomerate that owns Pratt & Whitney & Collins Aerospace and manufactures jet engines, elevators etc. while RTN focuses on producing missile defense systems to cybersecurity solutions. 
  • Merck (MRK),  also entered into a definitive agreement to acquire Tilos Therapeutics, a privately held biopharmaceutical company developing therapeutics targeting the latent TGFβ complex for the treatment of cancer, fibrosis and autoimmune diseases  for a total potential consideration of up to $773 million, including an upfront payment as well as contingent milestone payments. Merck is a leading global biopharmaceutical company known as MSD outside of the United States and Canada, has been inventing for life, bringing forward medicines and vaccines for many of the world’s most challenging diseases. Through their prescription medicines, vaccines, biologic therapies, and animal health products, they work with customers and operate in more than 140 countries to deliver innovative health solutions.
  • Close to time in San Francisco, Salesforce (CRM) and Tableau (DATA) have entered into a definitive agreement under which Salesforce will acquire Tableau in an all-stock transaction, pursuant to which each share of Tableau Class A and Class B common stock will be exchanged for 1.103 shares of Salesforce common stock, representing an enterprise value of $15.7 billion (net of cash), based on the trailing 3-day volume weighted average price of Salesforce’s shares as of June 7, 2019. “We are bringing together the world’s #1 CRM with the #1 analytics platform. Tableau helps people see and understand data, and Salesforce helps people engage and understand customers. It’s truly the best of both worlds for our customers–bringing together two critical platforms that every customer needs to understand their world,” said Marc Benioff, Chairman, and co-CEO, Salesforce. “I’m thrilled to welcome Adam and his team to Salesforce.”

Today oil prices were sent lower by 1.1% closing at $53.31./bbl. Dow 30 energy participants Chevron (CVX) moved up a .67% closing at $122.29 & Exxon (XOM) notched a win closing at $74.91 moving ahead .44%.

The US Dollar Index moved higher .2% ending the day at 96.74.

The 2-yr treasury yield ended at 1.90% up .06 & the 10-year Treasury note closed at 2.14% equally moving up .06.

The April Job Openings & Labor Turnover Survey confirmed that that job openings decreased to 7.449 million from 7.488 million figure in March.

Volatility bets closed lower today & once again traded within a relatively tight range. The CBOE Volatility Index (VIX) closed at $15.94 & down 2.21%. It traded between $15.84 – $16.47. The 2x leverage ETF TVIX also closed lower at $21.63 up 1.62% and traded between $21.26 and $22.25 today.

In the tech world, the sun shined very brightly for the most part.  Amazon (AMZN) charged higher up 3.14% closing at 1,860.63,  Alphabet (GOOG) was up 1.35% closing at 1,080.38, Apple (AAPL) rose 1.28% closing at $192.58 & Facebook (FB) bumped .85% closing at $174.82. Intel (INTC) moved up 1.67% closing at $46.80/share. Shares of Microsoft (MSFT) closed higher at $132.60 up .91%. Zoom Video Communications (ZM) raced ahead again closing at $102.00 up another 8.45% on the back of the 18.4% they expereinced on Friday after reporting positive earnings results & guidance that excited the street. Interestingly, Uber Technologies (UBER), the ride-sharing company continues to lag as it closed at $42.61/share down 3.51% still below its recent IPO price of $45.

Entertainment giant Disney (DIS) closed at $137.07 down .70%. See our latest story on Disney: Will Georgia’s Abortion Law “Force” Disney To Stop Filming In The State?

Home Depot (HD) was up again today another .38% closing at $198.05.

Dow 30 component & the world’s leading manufacturer of construction & mining equipment Caterpillar (CAT) closed at $125.74 up 1.03%.

McDonald’s (MCD) closed at $201.30 down 2.03%.   Plant-based burger maker Beyond Meat (BYND) closed at $168.10 jumping another 21.24% after skyrocketing 39.4% last Friday after posting positive results and guidance. Their meat is made of four main ingredients: water, pea protein isolate, canola oil & refined coconut oil and is meant to taste like “meat.”

As for as healthcare sector today, the pharmaceutical giant and Dow component Merck & Co, Inc. (MRK) closed at $82.48 up .02%.

Prevention Bio, Inc, (PRVB) closed up a whopping 217.01% at 13.79/share. PRVB announced on Sunday that results from the National Institutes of Health (NIH)-sponsored “At-Risk” Study were published on-line in The New England Journal of Medicine and presented at the Scientific Sessions of the 79th Annual American Diabetes Association (ADA) meeting.  The “At-Risk” Study was sponsored by the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK), with additional support from JDRF. The study was conducted by the Type 1 Diabetes TrialNet, an international collaboration aimed at discovering ways to delay or prevent type 1 diabetes (T1D), and evaluated Provention’s PRV-031 (teplizumab) for the prevention or delay of clinical T1D in relatives of type 1 diabetics at high-risk of developing the disease.  PRV-031 (teplizumab) is an anti-CD3 monoclonal antibody in development for the interception and prevention of clinical T1D. The “At Risk” Study enrolled 76 participants ages 8 to 49 who were “At-Risk” because they had two or more T1D autoantibodies and abnormal glucose metabolism (dysglycemia); 72% of participants were under the age of 18.  Subjects were randomized to receive either PRV-031 (teplizumab) or placebo. Results from the study showed that a single 14-day course of PRV-031 (teplizumab) significantly delayed the onset and diagnosis of clinical T1D, as compared to placebo, by a median of 2 years in children and adults considered to be at high risk. The median time to clinical diagnosis of T1D for placebo participants was just over 24 months.

Community Health Systems, Inc. (CYH) one of the largest publicly traded hospital companies in the US hit an intraday high of $2.89/share & a low of $2.74 today and closed the day at $2.80 up 2.56% on lower than average volume of 1.38 million shares of trading. 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 SEC.gov. 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.

In the biotechnology sector, we saw the Ishares Nasdaq Biotechnology ETF (IBB) fell .60% closing at $103.21.

Atossa Genetics (ATOS),  a Seattle-based biotech firm developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions, closed at $2.28/share up 5.56% as it traded as high as $2.34. The average daily trading volume is 3.10 million shares per day.  The Maxim’s Group’s biotech analyst, Jason McCarthy, Ph.D., reiterated his ATOS buy rating recently with a $9/share 12-Month Target Price. See his update report which is called “Reports the Quarter, Endoxifen Programs Progressing, Data Updates Expected Over 2019.”

San Diego-based biotech Fate Therapeutics (NASDAQ: FATE), dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders,  closed at $16.58/share on 719,208 shares of trading after establishing a new all-time intraday high last week of $18.06. The 52-week range is $8.64 – $20.65. 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.

INVO Bioscience, Inc. (IVOB) ended the day at $.3499/share. IVOB is a medical device company, headquartered in Medford, Massachusetts, 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 announced this week that it will participate at the 35th Annual Meeting of the European Society of Human Reproduction and Embryology (“ESHRE”) in Vienna, Austria June 23 – 26, 2019. ESHRE is the leading European-based scientific trade organization devoted to research, education, and advocacy relating to all facets of human reproduction and embryology.

Looking forward to seeing how all plays out again tomorrow!

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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