“Optimistic Market Music” Vista Partners Daily Market Recap 10/11/19

By John Heerdink LinkedIn

The optimism and sweet tune or news that the US-China ‘partial’ trade deal was in play, imminent and apparently agreed to today fueled the market throughout as it reached mid-session highs. The Dow was up over 500 points at one point before tailing off into the close.  We should also mention that the Fed had confirmed that it will further solidify the financial system by beginning to purchase treasury bills at a rate of $60B/month. The Fed’s purchases are supposed to into Q2 2020 and could go longer. The Fed will also continue its regular overnight & term repurchase operations that it is currently conducting minimally through January 2020.

As a result, it was all “green” today across the board and it was game on. The S&P 500 ended today’s session up by 32.14 points or 1.09% as it closed at 2,970.27.  The Dow gained 319.92 points closing at 26,816.59 up by .1.21%. The tech-heavy Nasdaq Composite closed back above the 8k mark at 8,057.04 up 1.34% or 106.26 points. The Russell 2000, the small-cap stock market index representing the bottom 2,000 stocks in the Russell 3000 Index jumped the most flying up 26.54 points up 1.79% and it ended trading at 1,511.90.

Treasury yields went up again today as treasuries sold off. The 2-yr Treasury yield moved up to 1.597% up .067% & the 10-yr yield finished higher at 1.79%.

The U.S. Dollar Index weakened closing at 98.32.

Oil prices jumped as an Iranian owned oil tanker was reportedly hit probably by missiles. Oil ended up 1.79% closing at $54.66/bbl. Chevron (CVX) closed at $116.15/share up 1.36%, Exxon (XOM) closed at $68.98/share up by 1.07%. Occidental Petroleum (OXY) closed at $41.12/share up .22%.

Gold prices closed at $1,503.62/oz. Silver closed at $17.60/oz. Hecla Mining Company (HL) closed at $1.91/share down 4.02% after Monday’s report that confirmed a 30% increase in Q3 silver production of 3.3 million ounces and gold production of 77,331 ounces & cash and cash equivalents of ~$33M an $24M increase over June 30th, 2019 with outstanding debt coming in slightly lower. First Majestic Silver (AG) closed higher at $9.22/share down 5.44%.

Volatility bets dropped sharply again today in the face of such optimism.  The CBOE Volatility Index (VIX) closed at $15.58/share down 11.33% or $1.99/share. The 2x leveraged ETF TVIX  closed at $12.53/share down 11.26% or $1.59/share and traded between $12.18 and $13.39 today.

Economic Reports

On Monday, we received the consumer credit report which showed a $17.9B move higher in August. On Tuesday, we received the Producer Price Index report for final demand has dropped .3% month/month in September. The index for final demand less food & energy dropped .3% too. We also learned that the NFIB Small Business Optimism Index for September has fallen to 101.8 from 103.1. On Wednesday, we confirmed that wholesale inventories moved up .2% month/month in August while wholesale sales did not change in August. The August Job Openings & Labor Turnover Survey confirmed that job openings went down to 7.051M. The weekly MBA Mortgage Applications Index jumped 5.4%. On Thursday, we received the Total CPI report and was flat month/month in September. The core CPI report, increased .1%. The year/year changes are now respectively at 1.7% & 2.4%. The Initial claims report for the week ending October 5 showed a drop of 10k to 210k. Continuing claims for the week ending Sept. 28 rose by 29k to 1.684M. On Friday, the Import prices report confirmed that they rose .2% month/month in September. Export prices were also confirmed to have declined .2% as agricultural export prices moved lower by 1.8% while non-agricultural export prices were declined .1%. The preliminary University of Michigan Consumer Sentiment Index for October came in at 96 up from September.

Big Mover

One big name that made a big move today was Winona, Minnesota’s Fastenal (FAST), a leader in the wholesale distribution of industrial and construction supplies, which management to beat Q3 earnings expectations and jumped into the close at $36.34 up 17.2%.

Healthcare

The S&P 500 healthcare sector closed at 1040.49 up .80%. UnitedHealth (UNH) closed lower by .74% closing at $222.07/share, Walgreens Boots Alliance (WBA) closed at $53.99/share up 2% & Cigna (CI) gained 1.04% closing at $152.40/share.

INVO Bioscience, Inc. (IVOB) ended the day at $.31/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.

INVO Bioscience (IVOB) announced on August 2019 that revenues for their most recent 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.

INVO Bioscience announced recently 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 higher by 1.25% to close back over the century mark at $100.24 & the NYSE Arca Biotech Index (^BTK) closed at 4,1216.06 up 1.24%.

Johnson & Johnson (JNJ) closed at $131.33 up 1.76% bouncing back today after earlier this week being ordered to pay $8B in damages to a man who used their antipsychotic Risperdal in his youth. The JNJ drug apparently caused a condition called gynecomastia which is the enlargement of breast tissue and failed to properly warn him of the risks.

Earlier this year Atossa Genetics Inc. (NASDAQ: ATOS), a clinical-stage biopharmaceutical company developing novel therapeutics and delivery methods for breast cancer and other breast conditions, reported final results from its Phase 1 dose-escalation study of its proprietary topical Endoxifen in male subjects. Atossa reported preliminary results from this study on September 13, 2018, and those results are now final. All objectives were successfully met:

  • Safety: There were no clinically significant safety signals and no clinically significant adverse events in participants receiving topical Endoxifen.
  • Tolerability: Topical Endoxifen was well tolerated at each dose level and for the dosing duration utilized in the study.
  • Pharmacokinetics: Blood samples showed no measurable Endoxifen.

“These positive final results support the further development of topical Endoxifen to treat breast health conditions in men, including a condition called gynecomastia, or breast enlargement and pain, which frequently occurs in men taking androgen deprivation therapy for prostate cancer,” commented Dr. Steven C. Quay, CEO, and President. “We are also conducting a Phase 2 study using our topical Endoxifen in women with mammographic breast density (MBD) which we anticipate completing in the second quarter of 2019. Once we have the results from the MBD study, we will determine the next steps using topical Endoxifen to treat male breast conditions including gynecomastia,” added Dr. Quay. 

Atossa Genetics (ATOS) closed trading at $1.69/share on this 11th day of October’s Breast Cancer Awareness Month. Atossa announced a week ago 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.

Neubase Therapeutics (NBSE) closed at $4.72/share up 4.89%. Neubase is a biotechnology company developing next-generation antisense therapies to address genetic diseases. BTIG recently picked up coverage with a BUY rating and a target of $15/share. Today NBSE announced the addition of Steven Dowdy, Ph.D., to its scientific advisory board (SAB). Dr. Dowdy joins preeminent scientists George Church, Ph.D., and Samuel Broder, M.D., on the NeuBase SAB. Dr. Dowdy is a cancer biologist, specializing in the development of RNA therapeutics and in understanding cell cycle controls. He is a professor of cellular and molecular medicine at the University of California, San Diego, School of Medicine, where his research focuses on the delivery of therapeutics into cells, including the development of targeting and endosomal escape technologies. Dr. Dowdy is also a member of the Board of Directors of the Oligonucleotide Therapeutics Society.

Tech & Entertainment

Apple (AAPL) closed at $236.21/share up 2.66% as optimism continues to grow with regard to the new iPhone models and new streaming entertainment offering, Alphabet (GOOG) closed at $1215.45/share up .56%, Facebook (FB) closed at $184.19/share up 2.31%, Microsoft (MSFT) closed at $139.68/share up .42%, NVIDIA (NVDA) closed at $185.99/share up 1.62% & IBM closed at $142.76/share up 1.15% while Cisco Systems (CSCO) gained .89% finishing at $46.56/share as Goldman Sachs (GS) downgraded yesterday as it views that corporate spending on technology has weakened. Disney (DIS) closed at $130.02/share rising .53% and Netflix (NFLX) closed at $282.93/share rising another .87% and Amazon (AMZN) closed at $1,731.92/share up .68%. Streaming device maker Roku (ROKU) closed at $121.60/share popping up 4.71% today as RB issued an upgrade on valuation as it had recently declined over the last 30-days and now boosted its target price to $155 up from $107.

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