“Manufacturing Woes” Vista Partners Daily Market Recap 10/1/19

By John Heerdink LinkedIn

Today, the markets suffered through a bit of negative economic news that came out of the manufacturing sector that seemed to surprise and bring forth woes for many on this first day of October. The Institute for Supply Management’s factory index was reported to have slipped to 47.8 in September. Apparently, this is the lowest it has been since June 2009 & the reading missed analysts estimates that had been looking for an increase. A reading of 50 is the dividing line between expansion and contraction and now we have the second negative reading below 50 in consecutive months. Furthermore, many thought the US might be strong enough to avoid joining the global slowdown, but this reading seemed to add further doubt that we can avoid this outcome.

As a result, it was a “red” day across the board.  The S&P 500 ended today’s session down by 36.49 points or 1.23% as it closed at 2,940.25 and is now trading below its 50-day moving average of 2948. All eleven S&P 500 sectors dropped while the following sectors led the charge down: cyclical industrials sector went down 2.4%, the materials sector dropped 2.3%, and the energy sector gave back  2.3%, and the financials sector dropped 2.1%. The Dow did not fare any better as it lost 343.79 points closing at 26,573.04 down by 1,28%. The tech-heavy Nasdaq Composite closed at 7,908.68 down 1.13% or 90.65 points. The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index dropped the most losing 29.94 points down nearly 2% or 1.97% and it ended trading at 1,493.43.

Treasury yields were sharply down today as many were flying to safety and bidding them up. The 2-yr Treasury yield closed at 1.56% & the 10-yr yield finished lower at 1.64%.

The U.S. Dollar Index weakened today and closed at 99.13 moving lower by .3%.

The energy sector was again off 2.3% as oil prices dropped to $53.60/bbl down 1%. Chevron (CVX) closed at $116.01/share off 2.18, Exxon (XOM) closed at $68.95/share down by 2.35%. Occidental Petroleum (OXY) closed at $43.77/share down by 1.57%.

Gold prices closed gained $11.40 closing at $1,482.6/oz. Silver closed at $17.32/oz. Hecla Mining Company (HL) closed at $1.84/share up 4.55% on the day. First Majestic Silver (AG) closed higher at $9.21/share up 1.32%.

Volatility bets jumped considerably today with fears of lower global growth running amuck.   The CBOE Volatility Index (VIX) closed at $18.56/share up 14.29% or $2.32/share. The 2x leveraged ETF TVIX  closed at $14.62/share up 7.50% or $1.02/share and traded between $12.92 and $14.69 today.

Economic Reports

On Monday, we received the Chicago PMI report for September and it went down to 47.1. On Tuesday, we received the ISM Manufacturing Index report for September which dropped to 47.8%. The total construction spending report confirmed an increase of .1% month/month in August.

Healthcare

The S&P 500 healthcare sector closed at 1033.33 down .96%. UnitedHealth (UNH) closed notched down by .05% at $217.21/share, Walgreens Boots Alliance (WBA) closed at $54.70/share down 1.1% & Cigna (CI) lost .90% closing at $150.43/share.

INVO Bioscience, Inc. (IVOB) ended the day at $.31/share up 2.99% on 184,308 shares of trading volume. 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.

Today, INVO Bioscience announced 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 1.51% to close at $98 the NYSE Arca Biotech Index (^BTK) closed at 4,146.91 down 1.63%.

Atossa Genetics (ATOS),  a Seattle-based biotech firm developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions closed at $1.87/share on this first day of Breast Cancer Awareness Month.

Atossa announced 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.

Tech & Entertainment

Apple (AAPL) closed at $224.59/share up .28% as optimism coontinues to gorw on the new iphone models and new straming offer, Alphabet (GOOG) closed at $1205.10/share down 1.14%, Facebook (FB) closed at $175.81/share down 1.27%, Microsoft (MSFT) closed at $137.07/share down 1.41%, NVIDIA (NVDA) closed at $174/share down .04% & IBM closed at $143.66/share down 1.21% while Cisco Systems (CSCO) lost 3.38% finishing at $47.74/share. Disney (DIS) closed at $129.55/share declining .59% and Netflix (NFLX) closed at $269.58 up .73% and Amazon (AMZN) closed at $1,735.65/ dlightly down .01%.



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