“Manufactured Decline” Vista Partners Daily Market Recap 9/3/19

By John Heerdink LinkedIn

We got hit with a solid club this weekend as the additional tariffs went in to effect on the Chinese levied by the White House and the markets did not like it on this first trading day in September. The certainty of the uncertainty or the trade wars continues to weigh heavy on the markets. We also did not get any help from anyone on the global front either as there were more protests in Hong Kong and of course the Brexit situation is still brewing with Boris at the helm in Great Britain & I believe Argentina added its two bits of negativity too. We also received the negative regarding the US ISM Manufacturing Index for August which came in at  49.1%. This is the first time that we have seen a contractionary (below 50) reading since 2016.

The markets, needless to say, went down today across the board. The S&P 500 lost 20.19 points or .69% to end the session at 2,906.27. The Dow lost 285.2641.03 points closing at 26,118.02 down 1.08%.  The tech-heavy Nasdaq closed at 7,874.16 down 1.11% or 88.72 points. The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index,  closed at 1,472.28 down 22.56 points or 1.51%. 

Treasury yields moved lower today and moved to even. The 2-yr Treasury yield closed at 1.47% down .03 & the 10-yr yield finished lower at 1.47% down .01. The U.S. Dollar Index closed at 99.01 up .1% again today.

Volatility bets moved higher today.   The CBOE Volatility Index (VIX) closed at $19.66 share up 3.58% or $.68/share and traded between $19.41 and $21.15. The 2x leveraged ETF TVIX  closed at $19.48/share up 8.71% or $1.56/share and traded between $18.59 and $19.77 today.

Energy

Oil prices closed at $53.91/bbl off 2.1%. Dow 30 energy participants Chevron (CVX) moved lower by 1.23% closing at $116.27/share & Exxon (XOM) closed higher by .12% closing at $68.56share.  Occidental Petroleum (OXY) closed at $42,68/share down 1.84% after their recent sale of $13 billion of debt to fund their Anadarko Purchase. 

Metals & Mining

Gold prices closed at $1549.50/oz up 1.18. Silver closed at $19.33/oz. Hecla Mining Company (HL) closed at $1.89/share up 6.18%. First Majestic Silver closed higher at $11.28/share up 3.68%.

Healthcare

The S&P 500 healthcare sector closed at 1040.16 down .63%. UnitedHealth (UNH) closed down 1.44% closing at $230.62/share, Walgreens Boots Alliance (WBA) closed at $50.43/share down 1.48% & Cigna (CI) gained .66% closing at $154.99/share post their recent Q2 earnings beat.

INVO Bioscience, Inc. (IVOB) ended the day at $..26/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 lower down 1.73% to close at $101.15.

Acasti Pharma Inc. (ACST), a biopharmaceutical innovator focused on its prescription drug candidate CaPre for the treatment of severe hypertriglyceridemia (HTG),  closed today’s trading at $1.80/share off 3.74% after hitting an intraday high of $1.87 on trading volume of 1.02 million shares. B. Riley recently initiated coverage with a BUY Recommendation and a Price Target of $7.75/share.

Atossa Genetics (ATOS),  a Seattle-based biotech firm developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions closed at $1.97/share. The average daily trading volume is 416,381 shares per day. Today 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.

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,  announced recently that the enrollment of the first patient in an observational study of children and adolescents ages 2 to 18 with Dravet syndrome. Dravet syndrome is a severe and progressive genetic epilepsy characterized by frequent, prolonged and refractory seizures, beginning within the first year of life. The effects of the disease go beyond seizures and often include cognitive regression or developmental stagnation, ataxia, speech impairment, and sleep disturbances. STOK shares closed at $37.72/share up .75% on 140,912 shares of trading.

Economy

Monday was Labor Day so we did not receive any readings.

On Tuesday,  the ISM Manufacturing Index for August was confirmed in at  49.1% which was the first contractionary reading (below 50%) in 3 years. Total construction spending, however, came in higher up .1% month/month in July

Day or Short Term Trading Update

Last Thursday’s 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 $1.87/share up 3.31% after hitting an intraday high of $1.89 on trading volume of 973,754 shares. B. Riley initiated coverage with a BUY Recommendation and a Price Target of $7.75/share earlier this week.

Nothing new added today.

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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