“Job Gains – Market Losses” Vista Partners Daily Market Recap 7/5/19

By John Heerdink LinkedIn

The markets today were ruled by the news that the US had realized a better than expected jobs report for the month of June. The US economy added 224K new jobs in June which was well above the 161k monthly average in 2019. The June unemployment rate was reported as 3.7% versus 3.6% in May, but still in solid territory. With the markets attention and intention on receiving an interest rate cut at the end of July, this relatively positive economic report seems to indicate that the FOMC will most likely not cut interest rates by a half a point but may still go ahead a cut by a quarter-point. The markets, in turn, sold off initially as it had anticipated a negative report, but it did work its way back, however, overall the markets remained down on the day except for the Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index which added a modest 3.50 points closing at 1,57562 ending up .22%. The S&P 500 ticked down 5.41 points and closed at 2,990.41 down .18% on the day. The Dow lost 43.88 points closing down .16% ending at the high of the day of 26, 922.12. The tech-heavy Nasdaq closed at 8,161.79 down .10% off 8.44 points.

The volatility trading range widened today while volatility bets continued their rose. The CBOE Volatility Index (VIX) closed higher at $13.28 up by a healthy 5.65% or $.71/share. It traded between $12.04- $14.47. The 2x leveraged ETF TVIX also closed higher at $15.58 up .58% and traded between $15.47 and $16.92 today.

The US Dollar Index gained again today ending the day at 97.27 up 1.2% for the week.

The 2-yr treasury yield ended at 1.863%  & the 10-year Treasury note closed up at 2.05%.

 Oil prices moved higher closing at $57.51./bbl up .17%.  Dow 30 energy participants Chevron (CVX) moved higher by .15% closing at $123.54 & Exxon (XOM) closed lower by .41% closing at $76.07.

Gold moved lower by 1.5% and closed at $1400.10/oz.

Big tech stocks were mixed for the most part today. Amazon (AMZN) gained .20% closing at 1,942.91,  Alphabet (GOOG) moved higher by .89% closing at $1,131.59, Apple (AAPL) was down .09% closing at $204.23, Facebook (FB) finished lower too at $196.40 down .41%. Shares of Microsoft (MSFT) lost .29% closing at $137.06. Chipmaker Intel (INTC) ended down .91% closing at $48.08/share & Micron (MU) shaved another .43% closing at $39.42 after its recent charge higher post beating earinings estimates.

Institutional alternative asset manager Och-Ziff Capital Management Group (OZM) closed at $24.31 up 1.63% bear is newly minted 52-wk high of $24.36 from 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 $5.13 up ..98%. CLNY pays an 8.71% cash dividend.

Nike (NKE) closed at $86.82 moving up a respectable .72%. Nike recently missed analyst earnings estimates but maintained full-year guidance.

The health care sector moved lower today. The S&P 500 healthcare sector closed at 1085.09 off .73%.

Community Health Systems, Inc. (CYH) one of the largest publicly traded hospital companies in the US hit and closed at an intraday high of $2.83/share & also traded at low of $2.66 today on 846,152 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 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.

The Ishares Nasdaq Biotechnology ETF (IBB) dropped 1.54% closing at $109.22. 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 July 3rd’s trading at $3.48/share up a strong $.40/share or 12.99% but managed to swing trade and give back $.41/share dropping 11.78% and closed at $3.07. 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 $2.29. The average daily trading volume is 833,329 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 $.3859/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 $43.92 down 1.08% 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 $85.60 down by 1.50%.

San Diego-based biotech Fate Therapeutics (NASDAQ: FATE), dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders,  closed at $21.12/share down 3.61% on 684,698 shares of trading after establishing a new all-time intraday high of $22.35. The 52-week range is $8.64 – $22.35. 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 Healthcare Conference in New York recently. 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 about a week ago.

Boston-based Pieris Pharmaceuticals (PIRS) closed near the high of the day $4.66 up .43% on 176,807 shares of trading. The stock traded between $4.5086 & $4.6850 today and the 52-wk range is $2.39 – $6.55.

Xeris Pharmacueticals, Inc. (XERS) closed higher at $12.16 up 3.67% as it continues its recent upward swing. 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 $42.92 today down 3.72% after hitting an intraday high of $44.56/share on 799,849 shares of trading. The 52-wk range $29.17 t0 $67.86. This week they announced that a 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 $28.00/share down .53% 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 $14.93 up by .34%.

Elsewhere on the recent IPO front, Zoom Video Communications (ZM) mpved up by 1.58% closing at $91.88 & Uber Technologies (UBER), the ride-sharing company closed lower at $43.53/share down 1.58% & 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 $152.63 adding .75%. 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 $35.52 off 1.33% 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 back to normal next week Monday through Friday. We will be receiving the FOMC meeting minutes on Wednesday & then the inflation report on Thursday.

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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