“Now Serving Q2 GDP” Vista Partners Daily Market Recap 7/25/19

By John Heerdink LinkedIn

The markets were served a solid serving of better than expected Q2 GDP results (showing less of a slowdown than expected) today, which seemed to give market participants’ enough of a jolt once again and we turned a nice shade of green into Friday’s close. We also received a healthy serving solid earnings reports from some of the markets leading companies. Report beats surfaced from the likes of Alphabet (GOOG) closing at $1250.41/share up 10.5% today, Starbucks (SBUX) closing at $99.11/share up 8.9% today, Twitter (TWTR) closing at $41.80 up +9.7% today,  Intel (INTC) closed at $51.59/share but down -1.1% today & McDonald’s (MCD) closing at $215.58 up .5% today. However, Amazon (AMZN) came in with mixed results where they beat top-line expectations but missing earnings and further guiding down regarding profits.

The results were again overwhelmingly positive. The S&P 500 gained 22.19 points or .74% to end the week solidly over 3k at 3,025.86. The Dow closed at 27,192.45 up .19% adding 51.47 points. The tech-heavy Nasdaq closed at 8,330.21, a new closing record, up 1.11% securing another 91.67 points. The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index, also moved up 1.12% closing at 1,578.97 adding 17.52 points down 1.20%. 

The U.S. Dollar Index was up .02 closing at 98.01. Volatility bets were on the same page again today as they moved lower. The CBOE Volatility Index (VIX) closed lower at $12.16 down 4.55% or $.58/share. The 2x leveraged ETF TVIX also closed higher at $12.93 down 4.43% or $.60/share and traded tightly between $12.72 and $13.14 today.

The 2-yr treasury yield closed at 1.87% up .02%, and the 10-yr treasury yield climbed to 2.08% up .01%.

Oil prices moved a bit higher today by .3% closing at $56.19/bbl.  Dow 30 energy participants Chevron (CVX) moved lower by 1.91% closing at $123.72/share & Exxon (XOM) closed lower by .16% closing at $74.81/share.  Occidental Petroleum (OXY) closed at $51.59/share up .88%.

Gold closed at $1424.55/oz. Silver closed at $16.48/oz. Hecla Mining Company (HL) closed at $1.88 up 2.17% and is due to report earnings before the market opens on Aug. 7th. First Majestic Silver (AG) closed at $9.82/share up 1.55% after its sizable recent move.

Tech

Big tech stocks results were mostly up today except for a few notable exceptions. Of those that we did not mention above, Apple (AAPL) closed higher up by .35% at $207.74/share  & Facebook (FB) closed lower at $199.75/share off .48%. Shares of Microsoft (MSFT) closed trading at $141.34/share up .82%.  Micron (MU) gave back .59% closing at $47.49/share. Netflix (NFLX) moved higher continuing its reversal moving for the third day in a row up a sizable 2.85% ending at $335.78/share almost a 9% move overall. NYC-based Yext (YEXT), an innovator in search giving customers control over their business information across the digital landscape, closed at $22.34/share up a very healthy 4.64% making it three days in a row of increases & has seen a 52-wk trading range of $12.90 – $27.19. 3M (MMM) beat earnings expectations yesterday but closed down again today at $173.98/share off 2.33%.

Financials/Money management

It was not a good day across the board again for the financial-related stocks. Goldman Sachs (GS) closed at $222.14 up .98%. JPMorgan Chase (JPM) closed at $116.22 up .44%. Wells Fargo (WFC) closed at $49.30 up strongly by 2.52%. Morgan Stanley (MS) closed at $44.87 down 1.38%, & Bank of America (BAC) closed $30.34 down 1.08%.

Institutional alternative asset manager Och-Ziff Capital Management Group (OZM) closed at $24.17/share up 1.55% or $.37/share closing off its newly minted 52-wk high of $25.49. The 52-wk range is $8.60 – $25.49. OZM sports a 4.20% cash dividend. OZM reports on August 1st.

Los Angeles-based Colony Capital (CLNY) a leading global investment management firm with assets under management of $43 billion had a interesting week as it announced Thursday that it had acquired Digital Bridge Holdings LLC (“Digital Bridge”) for $325 million as part of Colony’s strategic evolution into the leading owner and investment manager of assets, businesses, and investment management products in which the digital and real estate frontiers intersect. The Digital Bridge acquisition follows the May 2019 final closing of Digital Colony Partners, a $4.05 billion fund sponsored by Colony and Digital Bridge. Digital Colony Partners is dedicated to global opportunities in digital infrastructure and is the largest first-time institutional fund of this type. This transaction seems to be bringing the world-class team of Digital Bridge investment professionals and management of the Digital Bridge portfolio of high performing assets under the Colony franchise. This acquisition continues Colony’s strategy of building leading investment management platforms, adding a powerful focus on assets and businesses that benefit from the increasingly digital world, including communications infrastructure, quant-driven listed securities products, artificial intelligence, digital credit products, smart logistics industrial, private equity and emerging markets infrastructure and growth equity strategies. Digital Bridge manages nearly $20 billion of digital infrastructure globally, directly and through Digital Colony Partners, and pro forma for Digital Colony Partners’ pending Zayo Group Holdings, Inc. transaction. Combining this portfolio with Colony’s footprint, the merged firm will manage approximately $60 billion of assets. The Company believes this concentration on digital infrastructure and related, digitally-driven investment management businesses will be a highly compelling strategy to generate substantial and sustainable value for shareholders and is very complementary to recent initiatives in other growth areas such as emerging markets, energy, and listed securities, often with a “new economy” emphasis. The combination of the two companies also paves the way for Colony’s leadership succession plans, which will be implemented over approximately 18 to 24 months. Following a transition period, Marc C. Ganzi, a founder and Chief Executive Officer of Digital Bridge, and a Managing Partner and an Investment Committee Member at Digital Colony, will become the CEO of Colony, succeeding Thomas J. Barrack, Jr., who will return to the position of Executive Chairman. Mr. Ganzi will focus with Mr. Barrack and the Colony board and executive team to continue Colony’s strategic plan of selling non-core assets, reducing G&A, growing investment management, generating liquidity and de-risking, and maintaining REIT status and a dividend – the further details of which will be announced before year-end. Read Complete Story.  CLNY shares closed at $5.66/share up 4.62% after hitting an intraday high of $5.67. CLNY pays an 8.45% cash dividend. The 52-wk range is $4.55 – $6.28. CLNY reports earnings on Aug. 9th

Consumer Goods & Entertainment

The Home Depot (HD) closed at $216.91/share up .63%.

The Walt Disney Company (DIS) closed trading up 1.01% at $144.65/share.

Nike (NKE) closed up .26% at $87.54/share. Nike recently missed analyst earnings estimates but maintained full-year guidance.

Walmart (WMT) closed at $113.02 rising .71%.

Healthcare

The healthcare sector moved higher again today. The S&P 500 healthcare sector closed at 1064.81 rising .42%. UnitedHealth (UNH) closed higher up 1.70% closing at $252.94/share, Walgreens Boots Alliance (WBA) closed at $55.05/share up .53% & Cigna (CI) climbed .45% closing at $167.30/share.

Johnson & Johnson (JNJ) recenty reported earnings beating analyst expectations as they confirmed a +40% increase in Q2 net income year over year. JNJ shares closed at $130.73/share down .30% & continue to deal with the overhang of the opioid & mesothelioma related issues.

INVO Bioscience, Inc. (IVOB) ended the day at $.3550/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.

Corindus Vascular Robotics, Inc. (NYSE American: CVRS), a leading developer of precision vascular robotics, announced recently that Albert Einstein Jewish Hospital (Hospital Israelita Albert Einstein) in São Paulo, Brazil has become the first hospital in the Southern Hemisphere to implement Corindus’ CorPath GRX System. Ranked as the best hospital in Latin America for 10 years in a row, Albert Einstein Jewish Hospital will continue to uphold its standing by leveraging the Company’s technology in its health system’s leading research facilities. The Company’s CorPath® platform is the first FDA-cleared medical device to bring robotic precision to percutaneous coronary and vascular procedures. CorPath GRX is the second generation robotic-assisted technology offering enhancements to the platform by adding important key upgrades that increase precision, improve workflow, and extend the capabilities and range of procedures that can be performed robotically. For additional information, visit www.corindus.com CVRS shares closed at $2.74/share up 2.24% after hitting an intraday high of $2.79 and the 52-week trading range is $.78- $3.49/share. Corindus is due to report earnings before the open on Aug. 8th.

Biotech

The Ishares Nasdaq Biotechnology ETF (IBB) gained 1.07% closing at $105.32. This sector has been on a more than healthy run over the last 30 days. The 52-wk range is $89.01 – $122.97.

Pfizer (PFE) closed higher at $43.09 up .98% 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 $81.43/share down .39% on the day. Biogen (BIIB) reported earnings recently beating analysts’ estimates and closed $238.21/share flat for the day.

Atossa Genetics (ATOS),  a Seattle-based biotech firm developing novel therapeutics and delivery methods to treat breast cancer and other breast conditions closed at $2.02/share today. The average daily trading volume is 466,160 shares per day.   Atossa is developing a new proprietary modified-release oral tablet form of its Endoxifen, which is the form of the drug that the company intends for future clinical studies and commercialization. This is the next generation of oral Endoxifen following the successful clinical studies of the capsule form of the company’s oral Endoxifen. A patent application covering the new table has also been filed with the U.S. Patent and Trademark Office. As part of the development of this new oral tablet, Atossa has commenced a Phase 1 study in Australia to ascertain the pharmacokinetics of the tablet. The study is randomized, double-blinded and placebo-controlled with both single and multiple-doses in 2 groups with a total of 24 healthy female volunteers who will be dosed for 14 days. Atossa’s oral Endoxifen capsule, which has been used in previous clinical studies, will serve as the comparator. The first group of the study has now been enrolled and dosed. Steven C. Quay, Ph.D., M.D., CEO, and president of Atossa, commented: “We are excited to take this next step in our oral Endoxifen product development. Based on the abundance of information from our previous clinical studies, we strongly believe in the potential efficacy of oral dosing and intend for this modified-release tablet to be the commercial form of our oral Endoxifen. 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. This new study builds on the success of our Phase 1 studies of the oral capsule and topical forms of our Endoxifen, our recent successful Phase 2 study of topical Endoxifen, which demonstrated significant efficacy in reducing breast density, and our single-patient compassionate use study of oral Endoxifen. Following the completion of this Phase 1 trial, we will continue to use this proprietary modified-release formulation for future clinical studies — including a Phase 2 trial that we have already indicated is in development — and ultimately regulatory approval. We look forward to completing the study in the next quarter.”

San Diego-based biotech Fate Therapeutics (NASDAQ: FATE), dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders,  closed up at $22.50/share up solidly by 3.73% on 451,526 shares of trading after recently establishing a new all-time intraday high of $22.82! The 52-week range is $8.64 – $22.82. Cantor Fitzgerald initiated coverage on July 22nd with an overweight rating. Oppenheimer initiated coverage on Friday, July 12th with an Outperform Rating. Guggenheim Securities initiated coverage on FATE recently with a “Buy Rating” and a $25/share price target.  Mizuho initiated coverage with a price target of $27/share within the last 30 days.

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 recently a new all-time high prior to closing trading at $23.89/share up 2.80%. See complete story.  

Xeris Pharmacueticals, Inc. (XERS) closed down 1.88% closing at $11.99/share on relatively very low volume of 55,722. Xeris is a specialty pharmaceutical company leveraging its novel formulation technology platforms to develop and commercialize ready-to-use injectable and infusible drug formulations.

IPO

Elsewhere on the recent IPO front-most had a good day, Zoom Video Communications (ZM) moved higher by sizable 5.24% closing at $102.20/share & Uber Technologies (UBER), the ride-sharing company closed higher by 2.58% at $44.52/share & still below its recent IPO price of $45. Plant-based burger maker Beyond Meat (BYND)  continued its meaty move higher as it established a new all-time high of $239.71/share jumping another 5.40%.  Their meat is made of four main ingredients: water, pea protein isolate, canola oil & refined coconut oil and is meant to taste like “meat” and this rise feels euphoric.  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 $34.09/share up 1.10%. 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.

Economy

Q2 GDP reported came in today and showed an increase at a seasonally adjusted annual rate of 2.1%. The report further revealed that consumer spending rose as personal consumption grew by 4.3%.

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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